Deputy Minister on the Benefits of the 'Energy Efficiency Strategy'

On Monday, November 18, as part of the COP29 events, Baku hosted a presentation of the Roadmap for the 'Energy Efficiency Strategy in Azerbaijan.'

During the presentation, Deputy Minister of Energy of Azerbaijan, Orkhan Zeynalov, highlighted that energy efficiency measures in Azerbaijan could offset up to 25% of the country's energy needs.

"In some sectors of Azerbaijan, energy subsidies are still necessary; however, implementing planned energy efficiency measures could enable the removal of subsidies in the energy sector, potentially saving $0.5-1.0 billion," said the Deputy Minister, without providing further details.

He also mentioned that improving energy efficiency in the country's energy and utility sectors could result in a 3.5-4.2% reduction in natural gas consumption, along with a decrease in carbon emissions by 4-10 million tons of carbon equivalent.

Zeynalov reminded the audience that in March 2024, Azerbaijani President Ilham Aliyev approved the establishment of the Energy Efficiency Fund, aimed at supporting energy efficiency measures and the use of renewable energy sources.

This fund is intended to promote the adoption of smart meters, cogeneration systems, and the development and application of energy-saving materials and technologies in Azerbaijan.

The Energy Efficiency Roadmap for Azerbaijan was prepared with the support of experts from the World Bank and the EU and aligns with the goals of the European Union’s RePower initiative.

Regarding the operation of the Energy Efficiency Fund, according to the decree of the President of Azerbaijan, the fund will receive quarterly contributions from fuel sales, including 0.03% from domestic sales of natural gas and 0.5% from domestic sales of AI-92 gasoline and diesel fuel.

The fund’s resources will also be supplemented by loans, grants, voluntary donations from legal entities and individuals, contributions from international organizations and other donors, income from the fund’s asset management, and other sources not prohibited by law. The Energy Regulatory Agency (AERA) will manage the fund’s resources.

The fund will be able to provide loans to support the use of renewable energy and new technologies in Azerbaijan.

Loan limits have been set: small loans (from 1,000 to 50,000 manats), medium loans (from 50,000 to 1 million manats), and large loans (from 1 million to 10 million manats). Small loans are to be repaid within 5 years, medium loans within 10 years, and large loans within 15 years.

Earlier, during one of the panels at COP29, World Bank Vice President for Europe and Central Asia, Antonella Bassani, announced that the Bank had developed a 10-year Global Energy Efficiency Program, allocating around $1.5 billion for its implementation, with plans to secure an additional $2.5 billion from private and public sector sources.