Masdar Azerbaijan Energy (MAE) has signed a US$114.2 million loan for its 230-megawatt solar power plant near the Alat settlement in Azerbaijan.
Asian Development Bank and European Bank for Reconstruction and Development are providing US$21.4 million each. This is ADB’s first renewable energy project in Azerbaijan. The rest of the fund is coming from Japan International Cooperation Agency and Abu Dhabi Fund for Development.
The project marks the first significant private sector renewables investment in Azerbaijan’s history with long-term international financing from development finance institutions.
In April 2021 Masdar signed agreements to develop the Garadagh project, located 9 kilometres northwest of the Alat settlement, with the plant expected to start commercial operations in 2023.
“The development of this solar power project in Azerbaijan will be a key step forward in the country’s green growth journey,” says Shantanu Chakraborty, the director of infrastructure finance for South Asia, Central Asia, and West Asia of ADB's private sector operations department. “The plant will spur further private sector investment in the renewables sector in Azerbaijan and help the government achieve its target of 30% of renewable energy share in total generation capacity by 2030.”
“Masdar has taken a leading role in transforming the energy sector in Azerbaijan through this green energy project. We are thankful to ADB and other development financial institutions for playing a key role in its financing,” says Maryam Rashed Al Mazrouei, Masdar's team leader for development and nvestment.
Azerbaijan is heavily reliant on fossil fuels, with most of its electricity supplied by natural gas. The new solar power plant will generate up to 558 gigawatt-hours of clean energy annually.
MAE will provide its energy output to the Azerenerji Joint Stock Company under a 23-year power purchase agreement. MAE is a special purpose vehicle owned by UAE-based Abu Dhabi Future Energy Company Private, a global leader in renewable energy.
Masdar has developed utility-scale, grid-tied projects, small-scale applications providing energy access to communities away from the electricity grid, and carbon abatement projects across the globe. Masdar and ADB have previously partnered in landmark renewable projects in the region.