BAKU, Azerbaijan, September 3. The Asian
Development Bank (ADB) is considering providing $500,000 in grant
financing to support the preparation of sustainable power
infrastructure projects in Azerbaijan.
The technical assistance is proposed to be financed through the
Technical Assistance Special Fund (TASF) and will support the
preparation of the first phase of the proposed Azerbaijan Power
Distribution Modernization Project, which is included in ADB’s 2026
indicative country pipeline and monitoring report.
The assistance will also finance selected sector studies,
capacity-building and gender-related activities aimed at addressing
priority needs in the power sector, strengthening project readiness
and supporting future ADB operations.
The project is expected to improve the readiness of investments
in power distribution grid digitalization and renewable energy
integration.
The broader impact of the assistance is expected to be improved
electricity supply through the distribution network.
Feasibility study for the power distribution modernization and
digitalization project, including assessment of the suitability of
digital substation technology has been completed. Moreover,
institutional capacity of OJSC Azerishiq for ADB project readiness
and gender responsiveness has been strengthened.
According to the latest data from the Asian Development Bank
(ADB), Azerbaijan secured $2.53 billion in sovereign financing for
10 projects between 2015 and 2024. More than half of that funding
(51%) was allocated to regional cooperation and integration
projects, representing one of the highest shares among ADB's peer
countries. Another 39% supported private sector development, while
18% was dedicated to climate finance and 10% to digital
transformation initiatives.
Over the same period, ADB approved nine non-sovereign operations
totaling $963.9 million, all of which were directed toward private
sector development. Notably, 78% of these commitments were linked
to regional cooperation and integration—the highest proportion
among comparable upper middle-income economies in ADB's
portfolio.
Data from the Central Bank of Azerbaijan show that ADB's foreign
direct investment in the country's economy reached $2.075 million
in the first quarter of this year, up $455,000, or 28.1%, from the
same period a year earlier.
ADB has also expanded its support for Azerbaijan's energy
transition. In April 2025, the bank signed a memorandum of
understanding with the Asian Infrastructure Investment Bank (AIIB)
and the energy ministries of Azerbaijan, Kazakhstan, and Uzbekistan
to support the preparation of a feasibility study for the Caspian
Green Energy Corridor, a regional initiative aimed at enabling
cross-border trade in renewable electricity.
The bank is also providing technical assistance for renewable
energy projects in Azerbaijan. Among its recent initiatives is a
pilot floating solar power plant on Boyukshor Lake, launched in
2024 to evaluate the commercial viability of floating photovoltaic
technology and lay the groundwork for future large-scale
deployment.
These efforts are aligned with ADB's 2025–2029 Country
Partnership Strategy for Azerbaijan, which identifies green,
resilient and diversified economic growth as a central pillar of
cooperation, with a strong focus on clean energy, climate
resilience and sustainable infrastructure.
