Azerbaijan, Baku, July 5 / Trend I. Khalilova /
Islamic Development Bank (IDB) plans to review the implementation of energy projects in Azerbaijan. The projects include the reconstruction of phase II of Mingachevir hydroelectric power plant and construction of a new 330-kV substation Khachmaz, the government of the country said. IDB mission will visit Baku July 11.
"Implementation of the second draft is nearly completed. It is necessary to agree with the Russian side on a number of issues, because this substation is intended to expand the energy exchange between Azerbaijan and Russia", the source said.
A Substation "Khachmaz" is of great importance in terms of improving the maneuverability of the power system. It will be powered from a power line Yashma-Derbend, on which Azerbaijan exchanges power with Russia. Until now, due to lack of such a substation, the Azerbaijani side, getting electricity in Yashma from Russia, had to transport it back to the border to supply the northern regions. In future, it is planned to charge a new substation with functions in the region. The rest volume will be delivered to supply Baku. It is designed to serve 500,000 people living in the northern areas of the country.
A 330/110-kilovolt substation in Khachmaz region is constructed by the Chinese company CNEEC. IDB granted a loan worth $ 13.508 million for 12 years at 6 percent per annum to impalement the project.
Reconstruction of the phase II of Mingachevir hydroelectric power station worth $105 million has not been launched yet. The consultant continues training. Mingachevir hydroelectric power station, built in 1980, is the largest hydroelectric power plant in Azerbaijan. It has eight units with a capacity of 300 megawatts each, but the wear of the equipment does not allow to develop full capacity.
The Board of Directors of the Islamic Development Bank approved the issuance of credit worth $ 80 million to finance the project in January 2007. The remaining costs ($ 25 million) on a project were entrusted to the Azerbaijani government. According to the draft agreement, IDB's loan is granted for 15 years with a grace period of three years and an interest rate of 5.95 percent. Funds will be provided by the mechanism "leasing".
The work at Mingachevir hydroelectric power stations was conducted in late 1990 within the phase I. Generators, substations were replaced by financing from the IDB and the EBRD. Ground-based remote control was installed. In total, over $40 million dollars were spent on this work. About 12.5 million were allocated by the Islamic Development Bank, and $21 million - the EBRD.