World Bank supports Azerbaijan’s ambitious electricity plans

The World Bank has approved Azerbaijan’s Scaling-Up Renewable Energy Project (AZURE), which aims to strengthen the country’s electricity grid, diversify its energy mix and meet the country’s growing electricity demand.

The International Bank for Reconstruction and Development (IBRD) is providing a 173.5-million-dollar loan for this purpose, laying the groundwork for private sector investment in the country’s untapped renewable energy potential, particularly onshore wind.

The project is expected to secure an initial 384 million dollars in private investments, laying the groundwork for additional renewable energy funding while Azerbaijan explores the possibility of expanding its energy exports.

The AZURE program

The development focuses on expanding and reinforcing key transmission lines and substations to:

• Connect the 240-megawatt Absheron-Garadagh Wind Power Plant to the transmission grid.
• Strengthen and expand the 330/500-kilovolt (kV) high-voltage grid to ensure the safe and reliable evacuation of up to one gigawatt of privately developed renewable power generation.
• Improve grid stability to better integrate 1.8 gigawatts of renewable electricity through private investments.

Investments will focus on connecting areas with high renewable energy potential to demand centres.

“Through the project’s inclusion in the Europe and Central Asia Renewable Energy Scale-up (ECARES) multi-year program launched by the World Bank Group last year, AZURE is benefiting from a larger platform that convenes governments, financial institutions and private sector stakeholders and facilitates the exchange of best practices, regulatory solutions and investment strategies,” said Stephanie Gil, World Bank Practice Manager for Energy in Europe and Central Asia. “Through this approach, the best global and regional expertise can help drive development and support scalable and replicable private sector-led energy solutions.”

The project is a first step towards supporting Azerbaijan’s vision of creating a green energy corridor, an initiative to increase renewable energy development and trade in the region, with Hungary also playing a key role in this effort.

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