ADB consultants prepares investment program for power distribution development in Azerbaijan

Oil&Gas Materials 12 May 2011 20:39 (UTC +04:00)

Azerbaijan, Baku, May 12 / Trend I.Khalilova /

Consultants of the Asian Development Bank (ADB) presented to the Azerbaijani government the master plan and investment program for the power distribution development in the country, the ADB Baku Office said on Thursday. The master plan has been prepared by Spanish MERCADOS Company, and the investment program by Indian Vision RI.

"The presentation was held as part of the mission, led by the curator of electric power projects of ADB Tyanhua Liu,"- the office said.

The consultants have conducted studies of the current situation, identifying prospects for development in the electricity system of the country in three directions - generation, transmission and distribution.

"Taking into account the comments of the Government, consultants were instructed to finalize the master plan and program. Later discussions will begin on ADB's possibility to participate in the financing of power distribution systems in the country. "

The Asian Development Bank (ADB) will consider the Power Distribution Development project at the board of directors in Azerbaijan on May 15.

Azerenergy Joint Stock Company (Azerenergy), the state-owned enterprise responsible for power sector development and operation in Azerbaijan, requested ADB to support the power sector development, particularly on the enhancement and rehabilitation of power distribution networks. Azerenergy has requested ADB to provide a multi-tranche financing modality (MFF) in the amount of up to $500 million for Power Distribution Development Investment Program (the Program). The first loan is expected to hit $150 million. It will be allocated from ADB ordinary credit resources.

The proposed Program will enhance and upgrade the distribution networks cover of about 40 administration districts under Azerenergy's managed power system, to improve reliability of power supply, reduce distribution losses, enhance energy efficiency, and improve Azerenergy's financial performance.

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.
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