Saudi Arabia’s Acwa Power signed an investment agreement to develop a 240 megawatt wind power plant in Azerbaijan.
The deal was signed with the country's ministry of energy to develop the project in the Absheron and Khizi regions, Acwa Power said in a statement on Tuesday. The total investment in the project is $300 million.
“The kingdom of Saudi Arabia and Azerbaijan enjoy long-term diplomatic and economic relations, and cooperation between the two countries has been strengthened recently through their participation in Opec+ [the alliance of Opec and non-Opec members]," Saudi Arabia's energy minister Prince Abdulaziz bin Salman said. “Azerbaijan, along with other member countries played an important role in promoting stability in global oil markets.”
Azerbaijan also achieved a “high level of compliance” with the pact aimed at curbing production, which is currently withholding about 7.7 million barrels of oil per day from the markets, Prince Abdulaziz added.
Azerbaijan, which largely relies on natural gas to meet its energy needs, is aiming to diversify its energy mix and is targetting 30 per cent of renewable energy capacity by 2030. The country has committed to reducing its greenhouse gas emissions by 35 per cent by 2030 and is fast tracking public-private partnerships to develop wind projects in the country.
The new wind project will “mark a next stage of economic cooperation between our countries,” Azerbaijan’s energy minister Parviz Shahbazov, said.
“In addition to being the first ever foreign investment based-IPP [independent power producer project], the wind power station annually will help to generate 1 billion KWh electricity, saving up to 220 million cubic metres of gas, cutting down on 400,000 tonnes of emissions annually, create new jobs and new production and service areas.”
Acwa Power also signed two separate deals including a power purchase agreement and transmission connection agreement with Azerenerji, the country’s national power electrical power company, on the project.
The kingdom’s sovereign wealth fund, the Public Investment Fund, is the biggest stakeholder in Acwa Power with a 50 per cent share of the company. The company has eight other stakeholders, including the Saudi Public Pension Agency and the International Finance Corporation, part of the World Bank.
The company operates in 12 countries in the Middle East, Africa and Southeast Asia. It has a portfolio of 60 assets with a total investment of $61.2 billion producing 38.7 gigawatts of power and 5.8 million cubic metres per day of desalinated water.
In March, Acwa Power signed three deals worth up to $2.5bn with the Uzbekistan government to build power plants.