Azerbaijan, EBRD to ink deals in alternative energy sector

By Azernews

Azerbaijan and the European Bank for Reconstruction and Development (EBRD) will sign deals in the alternative energy sector.

The remarks were made by EBRD Head of Azerbaijan Kamola Makhmudova at the EU-Azerbaijan business forum on May 17, Azernews reports citing Trend.

She noted that the bank implemented projects in Azerbaijan in the sphere of green technologies in previous years, ensuring the safety of industrial waste. Makhmudova added that this work was carried out in large cities, and this trend will continue in the future.

"EBRD is involved in other large projects, in particular in the agriculture and transport sectors, and also in the sphere of alternative energy. The bank plans to expand its participation in the sphere of alternative energy," she said.

Makhmudova also added that it is planned to sign relevant agreements by the end of May as part of the construction of power plants with an installed capacity of 230 mW and 100 mW.

Moreover, she stated that the bank is ready to share its experience with Azerbaijan in the field of boosting control of overpayments.

Stressing that reforms in the banking sector should be aimed at strengthening control of overpayments, she noted that the cooperation of the EBRD with the state structures of Azerbaijan in this direction is an important element.

"We are ready to share our experience with banks and the regulator within these works," she said.

The EBRD office head also noted that the growth of the Azerbaijani economy and the investment potential of the country creates an opportunity to increase foreign direct investment.

"This is facilitated by the reforms carried out in recent years and the increase in the loan portfolio," she said.

She noted that the Central Bank of Azerbaijan is carrying out work contributing to the growth of the economy, employment, and the use of preferential mortgages.

"It’s also necessary to note the leading role of the regulator in the field of social security of the population during the COVID-19 pandemic," she said.

Additionally, she added that the economic zones being created in Azerbaijan, including those in the territories liberated from Armenian occupation, also contribute to the growth of foreign direct investments.

Established in 1991, EBRD invests in projects that contribute to the transition to an open market economy, as well as the development of private and business activities. 

Earlier, the bank approved a $51 million loan for the construction and subsequent operation of the Garadagh solar power plant, to be built by the UAE's Masdar in Azerbaijan.

Moreover, on May 12, Azerbaijan and European Bank for Reconstruction and Development (EBRD) signed a loan agreement to finance the "solid waste management" project in Ganja. The project is part of Ganja’s engagement in the EBRD's Green Cities program and will trigger the development of a Green City Action Plan (GCAP). The €10 million loan will be used to introduce smart waste collection and route optimization systems. New container types, enhancement of the current fleet, and introduction of greener vehicles will significantly reduce the carbon footprint of the city’s municipal services.

Azerbaijan has been a member of the EBRD since September 25, 1992. The main strategic directions of the EBRD's activity in Azerbaijan, are the diversification of the economy, the development of local capital markets, and the support of the green economy. To date, the EBRD has invested over €3.5 billion through 181 projects in the country. 

One of the main priorities of EBRD in Azerbaijan is to support the local corporate sector with direct financing. EBRD continues to pursue investments in energy projects, especially where there is a gap to improve efficiency and energy security.

Azerbaijan is the largest recipient of the EBRD funds in the Caucasus, as well as one of the largest recipients of this organization’s funds in the CIS and Eastern Europe.