The Southern Gas Corridor is expandable, and should a decision be taken to do so, we will be glad to engage with Azerbaijan, President of the European Bank for Reconstruction and Development (EBRD) Odile Renaud-Basso said in an exclusive interview with Trend ahead of the visit to Azerbaijan.
“Historically, we have had very fruitful cooperation with Azerbaijan. In the past, the bank supported the Southern Gas Corridor project with 1.7 billion euros of financing through Shah Deniz 2, TANAP and TAP. Currently, our strategic focus is on supporting the development of the country’s non-oil sector, including renewables. Following President Aliyev’s signing and approval of the renewable energy law, we invested 21.4 million euros in the first privately owned, utility-scale solar power plant in Garadagh. This was a milestone agreement which is set to pave the way for further renewable projects in Azerbaijan,” she said.
Odile Renaud-Basso pointed out that at the policy level, EBRD recently supported the Ministry of Energy in developing a renewable energy framework, including an energy regulator and renewable energy auctions.
“We also helped the ministry to conduct a grid strengthening study. We now stand ready to invest in grid improvements across Azerbaijan, which is a precondition for further development of its renewable energy sector. The Bank is open to exploring opportunities to invest in other renewable energy projects. We are preparing to invest in a first of its kind wind power plant on the Absheron peninsula. We understand that the capacity of the Southern Gas Corridor is expandable, and should a decision be taken to do so, we will be glad to engage with Azerbaijan. But, for the Bank to be able to finance the project, it will need to be aligned with the goals of the Paris Agreement and the Bank’s Fossil Fuel approach including mitigation of the carbon lock-in risk, through future-proofing the capacity to transport low carbon gases,” said the EBRD president.
As for the Green City Action Plan for Ganja city, Odile Renaud-Basso noted that the 5 billion euros EBRD Green Cities program helps member cities to identify, prioritize and tackle their most pressing environmental challenges by developing tailor-made Green City Action Plans (GCAP) and making targeted investments to address each city’s urban challenges.
“There are currently 56 cities in the Green Cities network and Ganja is the first Azerbaijani city to have joined the program in 2020. We launched the Ganja GCAP in July. As well as identifying and prioritizing challenges and climate change risks, GCAP also addresses these issues through targeted investments in urban infrastructure and policy actions. The GCAP is also a tool to attract funding for long-term sustainable urban development. Earlier this year, we provided a loan of 10 million euros to introduce smart waste collection and route optimization systems in Ganja. For more than 300,000 people living there, this means minimization of waste burning, improved public health and general environment, but also better working conditions for the municipal staff,” she said.
The EBRD president noted that during her visit next week, she will sign an agreement to help upgrade Ganja’s municipal street lighting.
“We would like to thank the Ministers of the Economy and Finance, other cabinet ministers, and mayor of Ganja for their continued support for the projects under the Ganja Green Cities program. We hope that this will be one of the many investments in Azerbaijan’s green infrastructure,” she said.
Odile Renaud-Basso believes that for Ganja’s residents, the Street Lighting Project will mean substantial energy-efficiency gains, better road safety and greater levels of security.
She didn’t rule out the possibility of implementation of this initiative in other Azerbaijani cities as well.
“Yes, and we are happy to explore relevant opportunities,” noted the EBRD president.
Regarding the timeframe for other Azerbaijani cities joining the program, Odile Renaud-Basso noted that among other factors, this depends on the timing of applications from relevant municipal authorities.
“There will also be investment opportunities beyond the green cities program,” she explained.
Touching upon the cooperation in the sphere of finance, Odile Renaud-Basso pointed out that EBRD remains committed to financing Azerbaijani banks in 2022 and beyond.
“Admittedly, some challenges remain, including the repercussions of the 2015 devaluation and COVID-19 impact which can still be felt to this day to an extent, with some banks (particularly smaller ones) still catching up in terms of performance, profitability and quality of the loan book. Despite all this, we have remained engaged with the Azerbaijan banking sector through difficult times, and this cooperation continues as we speak. We are currently working on several facilities in line with our main strategic topics such as promotion of international trade, support to micro, small and medium-sized enterprises, as well as green and inclusive financing. I am confident that such prospects are positive, and our team in Baku is currently working hard on multiple workflows in the financial sector of Azerbaijan,” said the EBRD president.
She noted that the EBRD is currently financing local private banks promoting international trade.
“We are also continuing our support to micro, small and medium-sized enterprises through green and inclusive financing. We are also focusing on providing financing in the local currency wherever possible, which is very important. At the policy level, we are closely engaged in supporting Azerbaijan’s regulatory improvements through advice to the authorities. We are also involved in strengthening internal capacity of our partners through advisory support. We stand ready to support the most critical elements of Azerbaijan’s financial infrastructure, to help with improvements in corporate governance, but also to assist with privatization efforts, if requested by relevant stakeholders,” she said.
Talking about her visit program to Azerbaijan next week, Odile Renaud-Basso said she is very much looking forward to this visit where she will meet Azerbaijan’s political leadership, diplomatic community, business clients and partners.
“During my time in Baku, I will reiterate our support to Azerbaijan and its green transition agenda, enhancement of transport connectivity, sustainable infrastructure and policy dialogue. We are expecting some very interesting and fruitful discussions. By the way, before the visit, I also held virtual meetings with a diverse group of Azerbaijani civil society representatives. We are set to sign an agreement on the Bank’s second Green City project in Azerbaijan. We will also inaugurate a joint project with AzPromo, the national investment promotion agency, which aims to boost the country’s telecommunications, media and technology (TMT) sector,” the EBRD president concluded.