14:13 - 1.07.2025

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July 1, Fineko/abc.az. The Government of Azerbaijan and the World Bank have signed a loan agreement as part of a project to expand the use of renewable energy sources in Azerbaijan.

ABC.AZ reports that two documents were approved at the signing ceremony - the loan agreement between Azerenergy and the International Bank for Reconstruction & Development (IBRD) and the guarantee agreement between Azerbaijan and the IBRD.

The loan agreement worth $173.5 million was signed by Baba Rzayev, Chairman of the Board of Azerenergy, and Stephanie Stalmeister, WB Manager for Azerbaijan. The guarantee agreement was signed by Azerbaijani Finance Minister Sahil Babayev and Stephanie Stalmeister.

The loan funds will be used to strengthen the energy transmission infrastructure in order to ensure safe and sustainable integration into the national energy system from renewable energy plants under construction in Azerbaijan.

The loan is given for 15 years with 5-year grace period and should be fully repaid by the end of 2039. Azerbaijani government's share in the project is $31.2 million, which will be used mainly to pay VAT and customs duties.

The main goal of the project, which has 4-year implementation period, is to increase the efficiency of the Azerenergy energy system and support the safe integration of renewable energy into the transmission network over the next 5 years.

The WB-funded components include the construction of four new 500 and 330 kV power transmission lines with total length of 341 km, as well as purchase of a transformer and related equipment for the Navai 500/330/10 kV substation.