Chapter 5 | PROJECTS CONTRIBUTING TO THE OPEC FUND’S CLIMATE FINANCE
AZERBAIJAN
240 MW Khizi-Absheron Wind Power Plant
Situation Analysis of Climate Impacts
A loan of up to US$50 million has been provided to finance the construction and operation of the Absheron-Khizi wind power project in Azerbaijan. ACWA Power’s 240 MW Absheron-Khizi Wind Power Plant will be the first inde- pendently developed utility-scale wind power project in Azerbaijan and the largest in the Caucasus region. The plant will generate clean electricity and is expected to reduce carbon emissions by more than 400,000 tons per year. It will operate for 25 years on a build-own-operate basis, with ACWA Power managing operations and maintenance.
The country has set ambitious long-term goals as outlined in the Socio-Economic Development Strategy (SEDS) for 2022–2026. 24 The SEDS aims for annual GDP growth of 3–4 percent over the medium term, with nearly 5 percent growth targeted specifically in the non-oil and gas sectors, aligning with the priorities of its strategy “Azerbaijan 2030: Nation- al Priorities for Socio-Economic Development.” Achieving these objectives requires moving away from the current growth model, which relies heavily on oil and gas rents and state investment. Instead, Azerbaijan needs a fundamentally new growth model driven by a dynamic private sector that is more integrated into the global economy, operates on a level playing field and is supported by a skilled workforce. Due to a combination of political, geographic and social factors, Azerbaijan is recognized as vulnerable to the im- pacts of climate change. Azerbaijan is ranked 53rd on the ND-GAIN Index. Figure 6 presents a time-series plot illustrat- ing Azerbaijan’s progress on the ND-GAIN Index over time. 25
Figure 6: Azerbaijan ND-GAIN Index
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FUNDING DETAILS:
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• Total program cost: US$347 million • OPEC Fund contribution: US$50 million • Type of financial instrument: term loan • EBRD co-financing: US$250 million • OPEC Fund climate finance as percentage: 100 percent mitigation • The OPEC Fund approved the loan in October 2023.
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Source: https://gain.nd.edu/our-work/country-index
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