ADB prepares new project to develop power distribution system in Azerbaijan

Business Materials 13 January 2012 19:43 (UTC +04:00)

Azerbaijan, Baku, Jan. 13 / Trend N. Ismayilova /
The ADB mission headed by leading expert Tianhua Luo will visit Baku on January 25-February 8 to prepare the power distribution development project, the ADB office in Baku told Trend today.

"The main purpose of the visit is to prepare the project," the office said. "The issues on the investment program developed by the bank in this area will be specified."
ADB plans to provide funding worth $ 500 million to implement this program. For the preparation of projects under the
ADB provided a grant worth $1 million to prepare the project within the ADB program. The technical assistance is aimed at getting the first tranche of multitranche funding program.

The energy sector is being restructured. Electrical distribution system is not effective enough. This leads to energy losses and poor quality of service. The investment program for electricity distribution is planned to be approved in 2012.
The project will determine the need to implement the entire investment program in the country. The first loan is expected to reach $ 150 million. It will be allocated from ADB ordinary credit resources.

The project will increase and improvement of the energy distribution system, covering 40 administrative districts under Azerenergy. The project also aims to improve power supply reliability, reduce losses in distribution network, increase energy efficiency.
The loan is planned to be approved in June 2012.

The bank started financing the energy sector in 2008.
The Asian Bank grants a loan worth $160 million with a total cost of the project worth $220 million.
The construction of a double-circuit 220-KV Transmission Line from Mingachevir hydroelectric power to Absheron substation is envisaged under the project. It also envisages implementing a 220/110KV substation unit with a 110KV transmission line.
Under the State Program on the Development of the Fuel and Energy Sector of Azerbaijan (2005-2015), investments worth $3.8 billion are required for the construction of new thermal and hydropower plants (1,500 MW), modernization of existing generation facilities, and strengthening the power transmission grid.