The World Bank has provided Azerbaijan with a $1.5 million grant to help prepare a major project aimed at creating a more climate-resilient and efficient water supply system.

The grant agreement was signed on August 31, 2026, by Zaur Mikayilov, Chairman of the Azerbaijan State Water Resources Agency (ADSEA), and Rolande Pryce, World Bank Regional Director for the South Caucasus, according to Report.

The funding will support preparations for the “Climate-Resilient and Efficient Water Supply” project, which is designed to improve water services in Baku.

The grant will finance a feasibility study, identification of priority investments, digital solutions for water-resource management and measures to improve energy efficiency.

The project will also focus on reducing non-revenue water (NRW) and addressing interruptions in water supply.

The World Bank grant will cover 100% of consulting costs across two main areas.

Part A will focus on the feasibility study, investment planning for Baku’s water system, digitalization and energy-efficiency solutions, as well as the preparation of tender documents for future contracts.

Part B will address environmental and social requirements, including the preparation of framework documents in line with the World Bank’s 10 Environmental and Social Standards and implementation of the Environmental and Social Commitment Plan.

Some of the funding will also be used to prepare the project’s environmental and social documentation.

ADSEA will oversee implementation of the grant activities. A specialized team of eight experts is being established within the agency, covering environmental and social issues, procurement, technical engineering, financial management, climate change, communications and monitoring.

The grant is scheduled to be utilized through December 31, 2027, paving the way for the preparation of a larger investment project aimed at modernizing and strengthening Baku’s water supply system.