Azerbaijan, Baku /corr. Trend S.Aliyev / The European Bank for Reconstruction and Development (EBRD) is providing a $92 million loan to Azerenerji JSC to finance the rehabilitation of the AzDRES thermal power plant, the largest power plant in Azerbaijan with a capacity of 2,400 MW, the Bank reports.
The loan will be used to finance a recently signed contract between the state-owned power utility Azerenerji and China National Electric Equipment Corporation (CNEEC) to improve the plant's reliability, efficiency, health and safety conditions and to reduce carbon dioxide emissions. The financing complements an initial $115 million loan by the EBRD signed in November 2006.
The tender on reconstruction of the station was won by Chinese CNEEC. The duration of the project is 34 months. After reconstruction, the capacity of the station will be make up nearly 2600 MWt.
The reconstruction of the station will save $300.000 in current prices at the expense of mazut. Moreover, the company can also gain EUR 150mln over 5 years at the expense of cut in launching of nitrogen and sulphur gas within the framework of Kiot Agreement.
The sovereign-guaranteed new loan addresses the reform of the energy sector to which Azerbaijan has committed itself in close cooperation with international financial institutions, the Bank's statement says. The EBRD finance pursues a number of challenging objectives such as tariff regulation, financial reporting and qualification under the Kyoto Protocol for Clean Development Mechanism. It is estimated that AzDRES' carbon dioxide emissions can be reduced by 8.2 million tonnes by 2012 thus allowing the company to qualify for carbon credits which would provide an additional source of income.
Azerbaijan THS, which was constructed in the 1980s, is the biggest electric power station in Azerbaijan. It possesses 8 energy blocks with a capacity of 300 kVt, but due to poor equipment, the capacity of the block has decreased. This year "Azerenerji", together with Russian "Force machines", carried out the reconstruction of the fifth energy block which allowed an increase to a capacity to 330-340 kVt.
The project on construction of power station includes upgrade of energy blocs, water hence system and chimney.