ADB to upgrade Azerbaijan’s grids with $750m

The Asian Development Bank has approved a $750 million loan facility to upgrade power distribution networks in Azerbaijan. 

The south-western Asian country will receive the loan in three tranches of $250 million each to rehabilitate distribution network substations and lines, replace current low-quality customer lines and install tamper-proof smart meters across the country. 

The loan will also finance training and other support to improve the financial management and operational performance of the state power distribution oversight company, Azerishiq Open Joint-Stock Company. 

Azerbaijan currently generates enough electricity to meet the domestic needs of 9.7 million people. However, the electricity supply outside the capital remains unreliable with distribution network equipment at the end of its life and suffering from sizeable system losses. 

“The ADB programme will help address the bottleneck in electricity supply and provide round-the-clock and reliable electricity to households and entities in secondary cities and rural areas in Azerbaijan,” said Sean M. O’Sullivan, director general in ADB’s Central and West Asia Department. 

The multi-tranche facility will run for over six years with an expected completion date of end of December 2022, according to a statement. 

On the other side of Asia, ADB has agreed to provide transaction advisory services for a road lighting PPP project in Malaysia. 

The Melaka Road Lighting project, supported by ADB Office of PPP and the state-owned Melaka Green Technology, plans to install over 100,000 smart light-emitting diode road lamps across the state using a digital networked light system. A key feature of the project is a planned “pay through savings” model, with the financing costs to be reimbursed over time as a result of reduced spending on lighting through replacing older, more energy-intensive lamps. 

The project is expected to cost around $50 million and will be financed using private capital. 

Under the advisory agreement, ADB will carry out a detailed project study, develop a bankable PPP structure, design a procurement strategy to identify and select a suitable private sector partner and advise on the selection of and negotiation with the private sector partner.