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The OPEC Fund for International Development (OPEC Fund), is extending a loan of $50 million to ACWA Power. This financial support is aimed at bolstering the 240 MW Khizi-Absheron wind energy initiative in Azerbaijan.
The project will not only enhance Azerbaijan’s electrical grid but also diversify its energy sources and mitigate carbon emissions.
This initiative marks the first large-scale wind energy project in Azerbaijan and stands as the biggest in the Caucasus area.
The project, valued at US$345 million, encompasses the establishment of wind energy facilities in two eastern Azerbaijani regions: Absheron, with a capacity of 102 MW, and Khizi, with 138 MW.
This is a groundbreaking venture as it’s the first independent wind energy project in Azerbaijan to be financed through foreign investment and organised as a public-private partnership (PPP).
Alongside the OPEC Fund, the European Bank for Reconstruction and Development (EBRD) is also contributing to the project’s financing.
OPEC Fund Director-General Abdulhamid Alkhalifa said, “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 its completion, the wind energy facilities in Khizi-Absheron are projected to contribute roughly 3.7% to Azerbaijan’s existing energy output. This will be sufficient to power 300,000 homes, conserve nearly 220 million cubic metres of gas each year, and counterbalance 400,000 tonnes of carbon emissions.
In line with its long-term goals, Azerbaijan is striving to source 30% of its energy from renewables by the year 2050. This would be a twofold increase from its current levels and aims to cut down emissions by 40%.
ACWA Power, with its headquarters in Saudi Arabia, is a prominent global developer and manager of power generation and water desalination plants. The OPEC Fund and ACWA Power have a history of collaboration on energy ventures in countries like Jordan (Zarga), Egypt (Kom Ombo), and Uzbekistan (Sidarya, Dzhankeldy and Bash wind farms).
Lastly, the OPEC Fund has pledged to allocate 40% of all its new investments towards climate financing by 2030, as outlined in its Climate Action Plan unveiled in September 2022.