Azerbaijan Secures $173.5 Million Loan from World Bank

Today, a loan agreement for the Azerbaijan Scaling-Up Renewable Energy Project (AZURE) was signed between “AzerEnergy” OJSC and the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group.

Additionally, a guarantee agreement for the AZURE project was signed between the Government of Azerbaijan and the IBRD, The Caspian Post reports.

The $173.5 million loan agreement was signed by Baba Rzayev, President of “AzerEnergy” OJSC, and Stefanie Stallmeister, World Bank Country Manager for Azerbaijan, while the guarantee agreement pertaining to the loan agreement was signed on behalf of the Azerbaijani government by Sahil Babayev, Azerbaijan’s Minister of Finance, and Stefanie Stallmeister.

The loan will strengthen the energy transmission infrastructure for renewable energy plants under construction in Azerbaijan.

The loan is drawn for 15 years with a grace period of 5 years, and will be repaid by the end of 2039.

The participation of the Azerbaijani government in the project (US$31.2 million) consists of payment of VAT and customs duties.

The main aim of the project, which will be implemented over a period of 4 years, is to enhance the efficiency of “AzerEnergy” OJSC’s energy system and ensure the safe integration of renewable energy plants into the power grid over the next 5 years.

As part of the project, the World Bank will finance the construction of four 500/330 kV high-voltage transmission lines with a total length of 341 km, as well as the purchase of transformers and associated equipment for the 500/330/10 kV Nawahi substation.

Addressing the signing ceremony, Minister Sahil Babayev hailed the World Bank Group’s sustainable support for the implementation of programs in the country.

Sahil Babayev noted that Azerbaijan enjoys rich renewable energy resources, with significant technical potential in the fields of solar, wind, and hydropower, emphasizing that the government’s goal is to transform the country not only into an energy producer but also into an exporter of green energy.

Emphasizing that cooperation with Azerbaijan continues successfully as reliable partners, Stefanie Stallmeister expressed her confidence that the World Bank Group will continue to make significant contributions to the country’s sustainable and inclusive development by supporting projects aligned with Azerbaijan’s socio-economic development priorities.