Azerbaijan eyes $499 million wind investment as renewables targeted

The 200-megawatt project is drawing "big interest” from European and Japanese companies, according to Camil Malikov, deputy head of the State Agency for Alternative and Renewable Energy Sources, who said the wind park would provide enough power for half-a-million homes.

"An early feasibility study of the project has been completed," Malikov said Friday by phone from Baku, the Azeri capital. "We hope to conduct a final feasibility study within two years. It will depend on how talks with foreign investors go."

Azerbaijan wants to substitute more clean energy for fossil fuel consumption, which accounted for 40 percent of all economic activity and 95 percent of total exports in 2013-2014. Standard and Poor’s Ratings Service cut the country’s credit rating to junk on the collapse in oil prices.

Wind parks could be attractive to foreign investors because of the abundant winds that blow through Baku and the Absheron Peninsula, Malikov said. Wind blows more than 270 days in Baku, which means "city of winds” in Persian, according to estimates from the Geography Institute of Azerbaijan’s Academy of Sciences.

Azerbaijan would like to build 40 to 60 turbines between the Caspian Sea islands of Pirallahi and Cilov, off the Azeri coast, Malikov said, adding that his agency is still trying to agree on the terms and size of a potential loan.

  

"We want this as an engineering, procurement and construction -- plus financing project,” Malikov said while declining to identify the companies he’s negotiating with. "We’ll operate the plant and repay loans within at least 15 years.”

"Solar energy too is a top priority for us,” according to Malikov, who said Azerbaijan has installed more than 20 solar-pilot projects in the last five years and has several sun-powered stations generating 2 megawatts each. Azerbaijan is also producing solar panels and collectors, spending 35 million euros to develop that sector of its economy.

The agency is talking with South Korea’s Economic Development Cooperation Fund over a 35- to 40-year loan agreement worth 60 million euros for a solar-power plant in Siyazan District north of Baku. That station would produce 30 megawatts of electricity a year, Malikov said.

Azerbaijan seeks to generate 20 percent of its electricity from clean sources. The share of renewable energy currently stands between 8 percent and 14 percent, Malikov said.

 

(Bloomberg)