On 14 January in Baku the Azerbaijani Ministry of Energy and Saudi Arabia’s ACWA Power held a ground-breaking ceremony for a new 240 MW wind power plant with an investment value of SAR 1.125 billion (US$300 million), following the signing of power purchase, investment and transfer agreements.
The project represents the first and largest foreign investment in Azerbaijan’s renewable energy sector to date and contributes to the country’s target to generate 30 % of its energy through renewables. By Q4 2023, the project will contribute an estimated 3.7 % of Azerbaijan’s total national grid capacity.
Azerbaijan is attempting to diversify its economy away from oil, which accounts for 90% of its exports and up to half its gross domestic product. Natural gas generates 90% of its electricity, with hydropower making up most of the balance.
• Masdar and ACWA Power struck agreements in April 2021 to make the first foreign investments in utility-scale solar and wind projects in Azerbaijan, a major step towards unlocking the country’s huge untapped renewable energy potential – more than 180 GW in solar and wind power, according to its energy ministry and the World Bank, compared to today’s 1.3 GW of installed renewables capacity.
In April, Abu Dhabi’s Masdar signed a $200m agreement to develop and operate a 230 MW photovoltaic project, to be located near the Alat settlement on the Caspian Sea and scheduled to come online in 2023.
Both new plants are being structured as public–private partnerships, and are expected to quadruple the country’s wind capacity and increase solar capacity nearly sevenfold.