UAE’s Masdar backs flagship Azerbaijan project with $21.4m financing

Investment is a further spur to the Caucasus nation’s growing transition from fossil fuels

Masdar Azerbaijan Energy LLC (MAE) has signed a $21.4mn loan agreement with the Asian Development Bank (ADB) to finance its 230MW Garadagh solar power plant in Azerbaijan. MAE is said to be a ‘special purpose’ vehicle owned by the highly-feted Abu Dhabi future energy company Masdar – and the finance agreement has suitably come through on what is the fifth anniversary of the planning and delivery of the flagship solar energy project.

It is also the first significant private sector renewables investment in Azerbaijan’s history in which long-term international financing has come solely from development finance institutions. The nation has typically been a regional pioneer in government-backed Public/Private Partnerships (PPP), particularly for key areas of infrastructure development and sustainable power initiatives.

In March 2022, Masdar announced that construction had now started on the Garadagh plant, which is expected to commence full commercial operations in 2023. Masdar also signed a further raft of agreements relating to a cluster of additional clean energy projects across the country, which is seen as the clear regional leader in energy diversification and has attracted finance for more than 50 new operations since 2018.

In June of this year, Masdar signed agreements with Azerbaijan to develop 10,000MW of clean energy.

Azerbaijan’s sustainable energy commitments extend to significant interests in wind power as a source of electricity generation, with the nation’s geography as part of the southern Caucasus being well-suited to wind capture technology.

Wind and solar power are part of the country’s diversification away from its traditional fossil fuel industries, which have been the largest contributor to the economy since the earliest discovery of oil in the region in 1910. Notwithstanding, a key government objective is to achieve full ‘gasification’ across all built-up regions during the course of 2022.

The Garadagh plant project is co-financed with the European Bank for Reconstruction and Development, Japan International Cooperation Agency and Abu Dhabi Fund for Development.

In January, Masdar formed a JVC with W Solar Investment for clean energy projects in Africa, and inked a deal with GEDF to develop a 100MW solar PV project in Georgia.


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