The OPEC Fund for International Development (the OPEC Fund) and the European Bank for Reconstruction and Development (EBRD) have partnered to provide a $246 million loan to ACWA Power for the 240 MW Khizi-Absheron wind power project development in Azerbaijan.
The wind project is expected to strengthen the country’s electricity supply, diversify its energy mix and reduce carbon emissions. This will be the first utility-scale wind power project in the country and the largest in the Caucasus region.
The $347 million project includes the development of wind farms in Absheron (102 MW) and Khizi (138 MW), two regions in eastern Azerbaijan. It is the first time an independent wind power project in the country is financed by foreign investment and structured as a private-public partnership (PPP).
“The OPEC Fund is proud to be a key partner in the Khizi-Absheron Wind Power Project, which will mark a shift in Azerbaijan’s energy landscape by promoting foreign investment and private sector financing for a public-private partnership renewable project. Through our support we aim to catalyze clean energy generation and a diversified energy future for Azerbaijan. The agreement is also a testament to what international development cooperation can achieve.”
Upon completion the Khizi-Absheron wind power plants are expected to generate approximately 3.7 percent of Azerbaijan’s current energy production, supplying 300,000 households, saving up to 220 million cubic meters of gas annually and offsetting 400,000 tons of emissions.
Mr. Marco Arcelli said that “ACWA Power is enthusiastic about playing a pivotal role in helping Azerbaijan achieve its goal of meeting 30 percent of its energy needs through renewable sources by 2030. We are deeply grateful to our financing partners, the European Bank for Reconstruction & Development and the OPEC Fund for International Development, for their unwavering support in making this vision a reality.”
Ms. Nandita Parshad, Managing Director, Sustainable Infrastructure Group, EBRD, commented that “We are proud to finance this landmark project for the energy transition in Azerbaijan. Last year at this same venue we signed an MoU with our long-standing partner, ACWA Power, committing to deliver renewable energy, green hydrogen, and green desalination projects in our regions. I am so pleased that with this signing we have achieved already nearly 1.5 GW of that promise to scale up renewable energy in the EBRD region from megawatts to gigawatts. We are grateful to ACWA Power and the OPEC Fund for the shared commitment to climate action.”
Azerbaijan aims to generate 30 percent of its energy from renewable sources by 2050, doubling its current level, in order to reduce emissions by 40 percent.
The OPEC Fund has committed to increase its climate financing to 40 percent of all new investments by 2030 according to its Climate Action Plan adopted in September 2022.