ADB offers to open access to energy distribution for private companies in Azerbaijan

Business Materials 22 December 2014 15:43 (UTC +04:00)

Baku, Azerbaijan, Dec.22

By Emin Aliyev, Azad Hasanli - Trend:

In the near future, the distribution of electricity in Azerbaijan may be handled by private companies, the head of the Baku office of the Asian Development Bank (ADB) Olly Norojono told reporters Dec.22.

He said that the ADB explores the appropriate opportunities in the country.

"We know that now energy, particularly electricity, is under the full control of the state," said Norojono at a press conference on the results of ADB operations in the country in 2014. "Recently, our bank has started providing technical assistance in this issue - we analyze the ways and means of admission of the private sector to this sphere."

He said that the study will affect not only the distribution, but also the production of electricity.

"The work has just begun and it is too early to talk about some details," said Norojono. "We will also consult with the government on this issue. After the analysis, namely, by the middle or the end of 2015, it will be possible to say whether the government will accept our offers or not."

The Asian Development Bank plans to allocate $140 million on the development of energy sector in Azerbaijan over 3 years, stated the bank's new strategy of cooperation with Azerbaijan for 2014 - 2018, approved by the ADB Board Sept.30.

"These loans are provided for 2015-2017 and aimed at the support of the development of renewable energy sources in Azerbaijan, which contributes to the diversification of energy sources and the use of wind, solar, hydro energy, biomass and others," said the strategy.

ADB plans to implement a pilot project on renewable energy in order to assess the capacity of public and private investment in this area.

ADB is also ready to consider the possibility of financing the investment program to improve the efficiency of the transmission and distribution of electricity.

"ADB will continue its dialogue with the government on the issue of tariffs and facilitate reforms in the energy sector of the country. Bank is assisting the government of Azerbaijan in order to develop a master plan for the energy sector, determine investment priorities, assess the tariff system and optimize financial resources," the document says.

The electricity consumption will rise to 99.9 percent of the population by 2020 (compared to 85 percent in 2011) and will amount to 2500 kilowatt / hours (compared to 1650 kilowatt / hours in 2011). The total revenue from the sale of electricity will increase to $900 million by 2018 (compared to $862 million in 2011), while CO2 emissions will be reduced to the level of 24,000 metric tons per year by 2020, according to the bank's forecasts.

Currently, the production and distribution of electricity in the country is carried out by the Azerenergy state monopolist.

ADB was established in 1966 and has 67 members. The bank's headquarters is located in the capital of the Philippines, Manila. Azerbaijan joined ADB on December 22, 1999.
The country's share in the bank's capital is 0.5 percent. ADB's leading shareholders are Japan and the United States (31.2 percent of the total share capital), India and China (12.8 percent), Australia, South Korea and Canada (16 percent).


Follow the author on Twitter: @AzadHasanli