Azerbaijan, Baku, Oct. 8 / Trend N. Ismayilova /
A Multitranche Financing Facility (MFF) for the development of electricity distribution systems in Azerbaijan will be approved by the Board of Directors of Asian Development Bank (ADB) in late June 2011, the bank said.
The details of the project will be clarified in late October 2010. Primary capital resources allocated to the project amount to $50 million.
The cost of the MFF was estimated previously to a volume of $300-$500 million.
A consultant at the bank previously held a general analysis of the electricity distribution sector to determine the needs of reconstruction and investment requirements. It is assumed that the MFF will be aimed at facilitating the distribution system, including upgrading of low-voltage networks in the regions of the country.
The bank consultants were engaged in preparing a Power Distribution Development Investment Program, which will become a part of the MFF. The bank provided technical assistance worth $1 million.
The consultant's task included preparation of a restructuring plan and business plan for Azerenergy OJSC, as well as the investment program in the energy sector. Investments of the bank are planned to be attracted to restore regional networks that will be chosen from Azerenergy's electric lines. Today, there is more than 45 distribution networks on the balance of Azerenerji, with the exception of Baku electricity.
Investments worth $3,8 billion to build new thermal and hydroelectric power plants (1,500 MW), modernize existing generation facilities and strengthen capacity of the transport network are part of the approved state program of energy sector in Azerbaijan (2005-2015).
The Azerbaijani government has been cooperating with the ADB since 1999. Today, the bank realizes Power Transmission Enhancement Project in the energy sector of Azerbaijan. It has already announced a tender to choose a general contractor. The project will reconstruct power lines to be exploited for more than 60 years. The Asian Bank grants a loan worth $160 million for 20 years with five-year grace period and annual rate of LIBOR of 0.08 percent.
The construction of double-circuit of 220-KV Transmission Line from Mingachevir hydroelectric power to Absheron substation is envisaged under the project.