Masdar, Abu Dhabi’s clean energy company, broke ground at the site of a $200 million solar power plant that will be built in Azerbaijan's capital and signed preliminary agreements for more deals in the country.
The 230-megawatt Garadagh plant in Baku is the country’s first foreign investment independent solar power project. It is expected to start commercial operations in 2023.
The groundbreaking ceremony was attended by Azerbaijan's President Ilham Aliyev, UAE Minister of Energy and Infrastructure Suhail Al Mazrouei and Azerbaijan’s Minister of Energy Parviz Shahbazov.
“The UAE and Masdar look forward to continuing to drive foreign direct investment and supporting Azerbaijan on its ambitious clean energy journey as we explore more opportunities to further strengthen our partnership,” Mr Al Mazrouei said.
The two countries share the vision for a sustainable future driven by clean energy and the groundbreaking ceremony marks a “major milestone in Azerbaijan’s clean energy journey”, Masdar chief executive Mohamed Al Ramahi said.
Masdar, which currently operates in more than 30 countries with a total investment of about $20 billion, aims to be a clean energy powerhouse. It signed an agreement that resulted in Adnoc and Taqa becoming shareholders alongside existing owner Mubadala Investment Company.
That deal will boost the clean energy company's renewable power capacity to more than 50 gigawatts by 2030 and allow it to create synergies and tap into a booming market for hydrogen, often considered a clean alternative to polluting fuels.
Azerbaijan, which largely relies on natural gas to meet its energy needs, plans to increase its installed power capacity to 30 per cent from renewable sources by 2030, in an effort to diversify its economy and reduce greenhouse gas emissions.
The country is developing several clean energy projects. In January, Saudi Arabia's Acwa Power and Azerbaijan's energy ministry broke ground on a $300m, 240-megawatt wind power station.
“By diversifying its energy mix, Azerbaijan will be able to drive sustainable development and enhance energy security, while making a major contribution to climate change mitigation,” Mr Al Ramahi said on Wednesday.
Masdar signed the agreement to develop the Garadagh project in April last year. The project will generate 500 million kilowatt-hours of electricity annually, enough to meet the needs of more than 110,000 households.
It is also expected to help to reduce emissions by more than 200,000 tonnes a year.
The Abu Dhabi Fund for Development is among the project's key financing partners and it plans to further support the clean energy ambitions of Azerbaijan, which has a solar energy generation potential of about 23,040MW, Masdar said, citing International Renewable Energy Agency data.
Masdar has also signed four preliminary agreements for the development of clean energy projects in Azerbaijan, the company said without giving details of the pacts.
“We look forward to building on our presence here in Azerbaijan, and helping the nation achieve its renewable energy objectives through these agreements,” Mr Al Ramahi said.
“We stand ready as an active strategic partner to Azerbaijan to provide knowledge exchange, develop local expertise and deliver lasting infrastructure improvement.”