BP to Fully Finance Shafag Solar Project in Azerbaijan

British multinational oil and gas company BP has announced its commitment to fully finance the Shafag solar project in Azerbaijan, marking a significant step towards the country's renewable energy ambitions. The project, aimed at diversifying Azerbaijan's energy mix and reducing its reliance on traditional fossil fuels, represents a substantial investment in the field of renewable energy sources (RES).

During a presentation of the Environmental Impact Assessment (EIA) document for the project, it was revealed that BP is yet to select the supplier from which it will purchase solar panels for the Shafag solar power plant. The selection process will be conducted through a tender, ensuring transparency and competitiveness in procurement. BP representatives emphasized their commitment to using high-quality materials, consistent with their practices in traditional energy projects.

The cooperation agreement between the Government of Azerbaijan and BP on the Shafag project was inked in 2021, laying the groundwork for the development of renewable energy infrastructure in the country. The chosen site for the project, located in the Jabrayil district of Azerbaijan, was selected based on criteria maximizing solar photovoltaic station efficiency.

The Shafag solar project is envisioned to comprise 50,000 solar panels with a total capacity of 240 megawatts (MW), contributing significantly to Azerbaijan's renewable energy generation capacity. With an estimated cost of $200 million, the financing of the project will be fully covered by BP investments, underscoring the company's commitment to sustainable energy development.

According to project estimates, the Shafag solar plant is projected to generate approximately 500,000 kilowatt-hours (kWh) of electricity annually, further bolstering Azerbaijan's energy independence and reducing carbon emissions. The project aligns with international standards and is poised to meet the requirements of international financial institutions, reflecting its viability and attractiveness to potential investors.

While BP currently plans to solely finance the Shafag project, the possibility of attracting additional investors in the future has not been ruled out. However, the project's current financial framework is deemed sufficient to support its successful implementation, with BP reaffirming its confidence in the project's feasibility and economic viability.

On June 4, 2022, the Ministry of Energy (MoE) and bp signed an addendum to the Implementation Agreement they had previously signed in June 2021, committing them to work together to take the next steps to jointly implement the Shafag solar AC 240 MW solar power plant in the Jabrayil district.