Bank to fund new grid link to Azerbaijan’s 360-MW Mingechaur

The Asian Development Bank (ADB) has approved a US$160 million loan to Azerbaijan to help fund construction of a new 280-kilometer transmission link from Azerbaijan’s 360-MW Mingechaur hydroelectric project on the Kura River.

The 25-year loan announced September 11 is to help build a double-circuit 220-kilovolt transmission line from Mingechaur to Absheron substation and associated substations, replacing two lines that have been in use for 60 years by government utility Azerenergy.

ADB said more than 20 percent 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 threat of grid collapse. The upgrade is to remove transmission choke points, lower system losses, and provide a more stable power supply, the bank said.

�It will also cut the need for imported electricity, optimize the country’s hydropower resource, and reduce fossil fuel consumption and pollution,� ADB said. �The gas and oil saved will be exported, giving a boost to government coffers.�

The government of Azerbaijan recruited consultants in 2007 for design and supervision of rehabilitation of the Mingechaur hydro project, built in 1955. (HNN 3/22/07) With financing from the Islamic Development Bank, Azerbaijan plans to add generating capacity to the existing Mingechaur project and to refurbish the 16.5-MW Varvara hydro plant downstream.

ADB said the transmission line work will require procurement of goods and services including consulting services for detailed design, preparation of bidding documents, construction supervision and contract management, and institutional strengthening.

For information, contact Azerenergy Joint Stock Co., Majid R. Aliyeb, Adviser, Economics and Finance, 10 Ac. Abdulkerim Alizade Street, Baku 1005 Azerbaijan; (994) 12-4971723; Fax: (994) 12-4985523; E-mail:

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