ADB, Azerbaijan sign a new loan agreement

ADB, Azerbaijan sign a new loan agreement
# 10 December 2008 11:50 (UTC +04:00)
The ADB Office in Baku said the Bank is extending a $160 million loan for the Power Transmission Enhancement Project in Azerbaijan.
The 25-year loan will help build a double-circuit 220 kilovolt transmission line and associated substation facilities, replacing two existing lines which have been in use for about 60 years by state-owned power company, AzerEnerji.
Over 20% of the country’s energy equipment and more than half of its network facilities are well beyond their useful life, resulting in frequent power failures, system losses, and the threat of a collapse of the energy grid.
The upgrade will remove transmission choke points, lower system losses, and provide a more stable power supply, especially in the key Azeri industrial hub, near the capital city of Baku.
It will also cut the need for imported electricity, optimize the country’s hydropower resource, and reduce fossil fuel consumption and pollution. The gas and oil saved will be exported, giving a boost to government coffers.
ADB’s loan will support the Government’s priority program of reforming and developing the power industry to protect its energy security. It will also act as a potential catalyst for attracting private sector investment.
The project costs in total $240 million in total, of which $80 million will be provided by AzerEnerji.
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