COP29: Azerbaijan Concludes First RE Auction At Tariff Of $3.540 Cents/kWh

Azerbaijan recently concluded its first ever renewable energy auction with technical assistance from the European Bank for Reconstruction and Development (EBRD). The outcome of the competitive auction was announced at the United Nations Climate Change Conference in Baku (COP29).

In the auction ran by Ministry of Energy, Universal International Holding Limited submitted the lowest bid, with a competitive tariff of US$ 3.540 cents per kilowatt-hour (kWh). Universal International Holding Limited will now start working towards commissioning a 100 megawatt (MW) solar power plant in Azerbaijan’s Garadagh region.

The EBRD has been supporting the country’s decarbonisation agenda for a number of years through financing, technical assistance and policy dialogue. The Bank has advised Azerbaijan on several reform initiatives, including implementation of the enabling framework for competitive bidding.

Parviz Shahbazov, the Minister of Energy of Azerbaijan said: “The selection of Universal International Holdings Limited underscores the increasing interest and confidence of international investors in Azerbaijan’s green energy initiatives. Organised with the support of the EBRD and announced during COP29, this auction highlights Azerbaijan’s dedication to international cooperation, sustainable development goals, and unlocking its green energy potential. This achievement will accelerate our energy transition efforts while enhancing our contribution to global climate objectives.”

Alkis Vryenios Drakinos, the EBRD’s Regional Head for the Caucasus, said: “This is a great way to wrap up the EBRD’s work at COP29 in Baku. Having surpassed one gigawatt mark in financed green energy and following our consistent policy engagement with the authorities, our assistance with renewables auctions in Azerbaijan has today produced game changing success. I would like to congratulate all parties involved.”

Climate Finance

In Azerbaijan, the Bank co‑financed the country’s first utility-scale solar power plant in 2022 and its first utility-scale wind power plant in 2023. As announced recently, the Bank is also providing finance for the region’s two largest solar plants in Bilasuvar and Neftchala, with financing documents being signed at COP29.

On the policy front, the bank is continuing its policy dialogue with Azerbaijan’s authorities on issues such as improvements to the electricity grid, the establishment of a low-carbon pathway for the energy sector and the development of a national hydrogen strategy. This combination of financing and policy engagement aims to attract further private climate finance to the country.

Through its renewable energy program, the EBRD is supporting a total of 18 countries. It has helped to conduct almost 5 GW worth of auctions in Albania, Bulgaria, Egypt, Kazakhstan, Serbia and Uzbekistan, and a further 3.5 GW of auctions are planned in Azerbaijan, Bulgaria, Moldova, Montenegro and Romania.