Implementation agreements of pilot projects on renewable energy were signed with “ACWA Power” and “Masdar”

Today at Cabinet of Ministers with the participation of the Prime Minister of the Republic of Azerbaijan Ali Asadov, implementation agreements of pilot projects on renewable energy  were signed between Ministry of Energy and the companies, “ACWA Power” of the Kingdom of Saudi Arabia and “Masdar” of the United Arab Emirates. The agreements were signed by Minister of Energy of Azerbaijan Parviz Shahbazov, Chairman of the Board of ACWA Power Mohammad Abunayyan and Chief Executive Officer of Masdar Mohammed Jameel Al Ramahi.

Speaking at the signing ceremony, Prime Minister Ali Asadov noted that as a result of the successful economic policy of President Ilham Aliyev, energy security was fully ensured in the country.

"Some of the reforms carried out in recent years are related to the production of renewable energy. A number of initiatives have been successfully implemented in this area, and the renewable energy sector has recently occupied an important place in the development of a green economy. Today, the signing of new agreements with foreign companies is one of the serious steps in this area. These contracts stipulate making investments in Azerbaijan, which, first of all, will stimulate our national economy and ensure that new workplaces are opened. These projects will ensure the energy sustainability of our country. Renewable energy production will contribute to the development of a green economy in our country”, Prime Minister Ali Asadov noted.

 “Diversification of generation of electricity from renewable energy sources is one of the main priorities, to which the President of the Republic of Azerbaijan pays special attention. By signing these agreements today, we are starting a new stage in the development of renewable energy in our country.  Cooperation with “ACWA Power” and “Masdar”, as the first foreign partners in the field of renewable energy in Azerbaijan, will contribute to our goals, mutual interests related to sustainable, clean energy”, Minister of Energy Parviz Shahbazov said. 

Chairman of the Board of “ACWA Power” Mohammad Abunayyan said : “We are proud to sign this agreement with the Azerbaijani government. The project will contribute effectively to increasing the share of the renewable energy to diversify energy sources in Azerbaijan, supporting the Azerbaijani government`s efforts in creating new services and industrial sectors and meaningful job opportunities."

 Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said: “As a global leader in the development of commercially viable renewable energy projects in more than 30 countries, Masdar is honoured to partner with the Republic of Azerbaijan to develop the landmark 200MW solar project. With more than a decade of experience, we are also proud to be supporting the government of Azerbaijan and its clean energy transition.”

According to the agreements, pilot projects will be implemented for the construction of wind power plants with a capacity of 240 MW with “ACWA Power”, and for the construction of solar power plants with a capacity of 200 MW with Masdar. In general, production of about 1.4 billion kWh of electricity on wind and solar energy projects annually is predicted.   

It should be noted that according to the Decree of the President of the Republic of Azerbaijan No. 1209 dated May 29, 2019 "On accelerating reforms in the energy sector of the Republic of Azerbaijan", cooperation with 9 international energy companies was established, and  intensive discussions were held in order to expand the use of renewable energy sources. “ACWA Power” and “Masdar” have been identified as a result of a three-stage selection process between the 7 companies that submitted their proposals. At the first stage, companies that provided price offers in accordance with the tariffs established in the country were selected. At the second stage, companies that offered the most favorable proposals on the guarantees and commitments to be given to investors, areas for the implementation of projects, as well as on strengthening work in the electric grid were selected. At the third stage, negotiations were held with companies to clarify the conditions and increase the economic attractiveness of the projects, as a result of which, on October 31, 2019, envelopes with offers of companies were opened. Then it was decided to cooperate with the companies "ACWA Power" and "Masdar" on pilot projects.

In order to prepare for the implementation of the projects, measures are being carried out by the working groups within the Commission, established pursuant to Order dated 05 December 2019 by the President of the Republic of Azerbaijan on “Actions for implementing pilot projects on the use of renewable energy sources”.

 “ACWA Power” currently has a power generation portfolio with total capacity of 30,200 MV, 8,000 MV of which is for the global renewable energy and an investment portfolio of 45 billion USD. Up to now, “Masdar” has invested 8.5 billion USD in the renewable energy sector with a portfolio of around 4,000 MW in this field.