Electric power system modernisation - Azerenerji

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The provision of a sovereign loan of up to USD 30 million to finance the purchase of autotransformer equipment for reinforcing works at four operational substations in Azerbaijan (the "Project"). The Republic of Azerbaijan represented by the Ministry of Finance will act as the borrower. Azerenerji OJSC will act as the implementing entity for the Project.

Project ID 55016

Status Exploratory

Location

Azerbaijan

Business Sector

Energy

Notice Type

State

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Anar Efendiyev
anar.efendiyev@azerenerji.gov.az
+994 12 530 66 20
https://azerenerji.gov.az/
10 Academician Abdulkerim Alizade Street, AZ1001, Baku, Azerbaijan

Project ID 55016

Status Exploratory

Location

Azerbaijan

Business Sector

Energy

Notice Type

State

Environmental Category

Approval Date

11 Sep 2024

Disclosure date

26 Feb 2024

Electric power system modernisation - Azerenerji (Azeri) (PDF, 0.14MB)

Project description

Project objectives

The Project will support the purchase of autotransformer equipment for reinforcing works at four operational substations in Azerbaijan. The Project will help to improve the flexibility of the power system in Azerbaijan required to integrate renewable energy capacities. The successful implementation of the Project would set an example for further grid strengthening projects that are important for the integration of renewable energy projects in the country.

Transition impact

ETI Score:68

roject will promote the "Resilient" transition quality by allowing the connection of planned renewable energy installations which currently are not possible due to inadequacy of the grid or lead to a decrease in the curtailment of existing renewable energy installations.

The Project will also promote the "Green" transition quality by entailing a policy engagement, which aims to deliver institutional reform and lead to structural changes across sectors/markets.

Client information

AZERBAIJAN SOVEREIGN

The Borrower is the Republic of Azerbaijan represented by the Ministry of Finance. Azerenerji OJSC, an Azerbaijani state-owned enterprise, which is responsible for generation and transmission of electricity in the country, will act as the implementing entity for the project.

EBRD Finance Summary

USD 30,000,000.00

Sovereign loan of up to USD 30 million to finance the purchase of autotransformer equipment for reinforcing works at four operational substations in Azerbaijan.

Total project cost

USD 30,000,000.00

Additionality

Financing structure: The Bank is additional in providing long-term financing at terms and conditions not available in the local market for this project.

Policy, sector, institutional, or regulatory change: The Bank is actively involved in the development of policy dialogue in Azerbaijan. The Project will be the first engagement of the Bank focused on the modernisation of the power system required to improve the flexibility of the power system and integrate renewable energy capacities in Azerbaijan. Therefore, the successful implementation of the Project would set an example and a replicable standard for further grid strengthening projects that are important for the integration of future renewable energy projects.

Environmental & Social Summary

Categorised B (2019 ESP) and Low-Medium risk. The environmental and social risks associated with the purchase and replacement of transformers at four substations are expected to be site-specific, readily identifiable and can be mitigated through good industry practice. The Environmental and Social Due Diligence (ESDD) will be carried out by an independent consultant and include assessment of the Client's Environmental and Social management systems, a site visit and a review of the Client's current operations and the proposed Project.

The Project is expected to have indirect environmental benefits by upgrading substation capacity to support the transition to renewable energy integration. Key environmental and social impacts related to the proposed investment include labour and working conditions, occupational health and safety including electrical and road safety, contractor management during replacement and maintenance, pollution prevention issues such as hazardous waste management and grievances from the project stakeholders. Impacts on biodiversity, cultural heritage or economic displacement are not expected as installation works will take place at the existing substation sites. At this stage, no associated facilities have been identified. Due diligence will also review E&S risks in the project supply chain and arrangements for the old transformers being replaced.

Based on the ESDD, an Environmental and Social Action Plan (ESAP) will be developed to structure the Client's existing operations and the Project to align with the Bank's Performance Requirements (PR's) and good industry practice.

The Bank will monitor compliance with the PR's by reviewing annual reports prepared by the Client on environmental and social matters. The Bank will also undertake monitoring site visits, as needed.

The PSD will be updated upon completion of the ESDD.

Technical Cooperation and Grant Financing

Environmental and Social Due Diligence of the Project. Funding source to be confirmed.
Support with the development of a Low-Carbon Pathway for the Power Sector in Azerbaijan. Funding source to be confirmed.
Advance Procurement Support. Funding source to be confirmed.

Company Contact Information

Anar Efendiyev
anar.efendiyev@azerenerji.gov.az
+994 12 530 66 20
https://azerenerji.gov.az/
10 Academician Abdulkerim Alizade Street, AZ1001, Baku, Azerbaijan

PSD last updated

06 Jun 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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Electric power system modernisation - Azerenerji

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)