BAKU, Azerbaijan, November 19. Azerbaijan is expanding the sources of funding for its Energy Efficiency Fund, Trend reports.
The issue is covered in amendments to the law "On the Efficient Use of Energy Resources and Energy Efficiency," which were discussed at today's session of the Azerbaijani Parliament's Committee on Natural Resources, Energy, and Ecology.
The proposed legislation aims to enhance the methods of forming and utilizing the Energy Efficiency Fund's resources. The amendments will broaden the sources of funding for the Fund. Under the new draft law, a legal framework will be established to allow contributions to the Fund from the sale of energy types whose prices are not subject to state regulation but play a significant role in production and consumption and have a negative impact on the environment due to their production and use.
According to the "Rules for the Formation and Use of the Energy Efficiency Fund," approved by Decree No. 13 of the President of the Republic of Azerbaijan dated March 1, 2024, contributions to the Fund will initially come from four energy products—electricity (excluding renewable energy-generated electricity), natural gas, AI-92 gasoline, and diesel fuel—on which tariffs are regulated by the government. The law will also introduce contributions from the sale of four additional energy products whose prices are not regulated.
As a result, the resources allocated to the Fund from energy sales will significantly increase. The funds will be exclusively directed toward promoting energy efficiency activities, such as financing initiatives outlined in Article 15.2 of the law, thereby improving the efficiency of Fund utilization.
The expanded funding sources will allow for greater use of incentive tools, including energy efficiency projects, scientific and technological support for the sector, the introduction of smart meters and systems, cogeneration plants, and the creation of favorable conditions for renewable energy use. The new provisions will also support renewable energy projects, help prevent environmental damage from industrial activities, and provide grants, subsidies, and low-interest loans for energy efficiency projects.