Azerbaijan, Baku, July 12 / Trend I. Khalilova /
The Islamic Development Bank (IDB) has initiated a review of energy projects in Azerbaijan. The projects include the reconstruction of phase II of Mingachevir hydroelectric power plant and construction of a new 330-kilovolt substation Khachmaz, the government said. The IDB's mission will be in Baku till July 17.
This is a working visit, because the mission intends to get acquainted with achievements while realizing energy projects financed by the Bank", the source said.
Realization of the construction project of Khachmaz substation, designed to increase energy exchange between Azerbaijan and Russia, has been completed. The substation works in operation. A consultant must prepare a final report, which will also be discussed with the IDB mission, in connection with the completion of the project.
The substation "Khachmaz" is of great importance from the standpoint of improving the maneuverability of the power system. It will be powered from a power line Yashma-Derbent, on which Azerbaijan exchanges power with Russia. Until now, the Azerbaijani side, getting electricity from Russia in Yashma, was forced to transport it back to the border to supply the northern regions due to lack of such a substation. It is designed to serve 500,000 people living in the northern areas of the country.
A 330/110-kilovolt substation in Khachmaz region was constructed by a Chinese company CNEEC. The IDB granted a loan worth $ 13,508 for 12 years at 6 percent per annum to realize the project.
Construction work on the reconstruction project of phase II of Mingachevir hydroelectric power station worth $105 million has not begun yet. A consultant continues the preparatory work.
"The mission of the bank plans to discuss a starting date of the reconstruction of hydroelectric power station with a consultant of the project," the government said.
Mingachevir hydroelectric power station was built in 1980. It 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 IDB Board of Directors 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, the 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 "leasing".
The work at Mingachevir hydroelectric power station within phase I were held in late 1990s. Generators, substations were replaced by financing from the IDB and the EBRD. A ground-based remote control was installed. In total, over $40 million was spent on this work, of which $12.5 million dollars were allocated by the Islamic Development Bank, and $ 21 million -by the EBRD.