KFW to approve project on construction of AzSDPS-Imishli ETL in Feb
German reconstruction bank KFW plans to hold a final evaluation and approve the project on construction of AzSDPS-Imishly electricity transmission lines (ETL). The Bank allocated 30m euros for implementation of the project. The experts of the bank evaluated the project in January, Trend reports referring to Natig Abdullayev, the head of the KWF Baku office. The project has great importance for the country, as it envisages improvement of energy exchange between Azerbaijan, Iran and Russia, as well as effective energy supply of the southern regions of the country and the Nakhchivan Autonomous Republic (AR). Besides, Azerbaijan has a program on improvement of energy system of the southern regions, signed with Iran.
The project envisages construction of 195km electricity transmission lines from AzSDPS (State District Power Station) to the Imishli region. It also includes construction of the substation in the Goranboy region and increase of the capacity of the Imishli substation by 330KW. After construction of ETL the capacity of the electricity transmission lines will grow from current 200MW to 700MW.
The German bank will finance the project on half-commercial conditions i.e the loan will be granted for 12 years with 2-year grace period and fixed interest rate. Such method of financing suits to the policy of the German government in the view of effective use of electric energy, Abdullayev said. KFW transmits to new stage of cooperation in relation to increase of capitation tax up to $1,500. It means that the bank will give preference to commercial financing.
Meanwhile, the conditions of energy project were softened due to presentation of grant from the German Fund on energy-savings and effective use of electricity. As a result, a part of the financing by bank is grant. Otherwise, the loan would be allocated for 8 or 10 years and with high interest rate. This is the first grant received by Azerbaijan from the Germany government. The German government made such decision, since it regarded Azerbaijan as a part of Europe.
The bank have allocated privileged loans for 40 years with 10-year grace period and 0.75% interest rate to Azerbaijan so far.