Masdar reaches financial close on 230-megawatt Azerbaijan solar project

The power plant is expected to start operations in 2023

Masdar's 1 MW solar PV plant in the Solomon Islands. Masdar is aiming to reach a capacity of at least 100 gigawatts by 2030 as it continues to boost its clean energy portfolio. Photo: Masdar

Abu Dhabi's clean energy company Masdar has achieved a financial close on its 230-megawatt Garadagh solar power plant in Azerbaijan as the company continues to boost its renewables portfolio across the globe.

The new plant that will generate half a billion kilowatt-hours of electricity annually — enough to meet the needs of more than 110,000 homes — is the country’s first foreign investment-based independent solar power project and Masdar’s first venture in the central Asian republic, Masdar said in a statement on Tuesday.

The $200 million project is co-financed by the Abu Dhabi Fund for Development, the Asian Development Bank, the European Bank for Reconstruction and Development, and Japan International Co-operation Agency. It is expected to start operations in 2023.

“In line with the national priority on 'A clean environment and country of green growth', our country has ambitious plans about utilisation of its ample renewable energy potential and we are confident that this solar power project will be a great trailblazer for future projects in the field of green energy,” Azerbaijan’s energy minister Parviz Shahbazov said.

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 started work on a $300m, 240-megawatt wind power station.

“The Garadagh project will serve as a benchmark for Azerbaijan’s clean energy journey, with the nation committed to transforming its energy sector and driving sustainable development,” Mohamed Al Ramahi, chief executive of Masdar, said.

Masdar, which currently operates in more than 30 countries with a total investment of about $20 billion, is targeting to reach a capacity of at least 100 gigawatts by 2030 after growing its portfolio by 40 per cent last year.

In June, Abu Dhabi National Energy Company, known as Taqa, Abu Dhabi National Oil Company and Mubadala Investment Company entered into binding agreements that will see Taqa and Adnoc acquire stakes in Masdar from Mubadala.

As part of the deal, Taqa will acquire a 43 per cent controlling stake in Masdar’s renewables business, with Mubadala retaining a 33 per cent interest and Adnoc owning the remaining 24 per cent interest.

In Masdar’s new green hydrogen joint venture, Adnoc will hold a 43 per cent controlling stake, Mubadala will retain a 33 per cent interest and Taqa will hold a 24 per cent share.

Masdar has also signed agreements with Azerbaijan’s Ministry of Energy to develop clean energy projects with a combined capacity of 4 gigawatts in the first phase, with the right to develop an additional 6 gigawatts in the second phase.