Jul 01, 2025

Azerbaijan inks loan agreement with World Bank to expand renewable energy projects

The government of Azerbaijan and the World Bank have signed a loan agreement on “the project to expand the use of renewable energy sources in Azerbaijan”.

According to information that between the Open Joint Stock Company “Azərenerji” and the International Bank for Reconstruction and Development, a member of the World Bank Group, was signed“ loan agreement on the project to expand the use of renewable energy sources in Azerbaijan” and “guarantee agreement between the Republic of Azerbaijan and the International Bank for Reconstruction and Development on the project to expand the use of renewable energy sources in Azerbaijan”.

The loan agreement for the amount of $173.5 million was signed by Baba Rzayev, Chairman of the Board of Azerenerji Open Joint Stock Company, and Stefanie Stallmeister, World Bank Manager for Azerbaijan, and the guarantee agreement on the loan agreement was signed by Finance Minister Sahil Babayev and Stallmeister.

The raised loan will ensure the strengthening of the energy transmission infrastructure for the safe transfer of RES plants under construction in Azerbaijan to the energy system. The loan funds are attracted for a 15-year term with a 5-year grace period, and the loan will expire at the end of 2039. The Government of Azerbaijan's share in the project ($31.2 million) consists of VAT and customs duties.

The main objective of the project, the implementation period of which is 4 years, is to contribute to the improvement of the efficiency of the energy system of Azerenerji JSC and the safe integration of the renewable energy sources under construction into the power transmission network over the next 5 years. Under the project, the World Bank will finance the construction of 4,500 and 330 kV transmission lines with a total length of 341 km, as well as the purchase of transformers and related equipment for the 500/330/10 kV Navahi substation.