BAKU, Azerbaijan, September 25. Azerbaijan has
attracted strong interest from foreign companies in renewable
energy projects, SOCAR Green CEO Elmir Musayev said on Friday at
the 2nd Azerbaijan International Investment Forum in Baku, Trend's correspondent
reports from the event.


He said experts had assessed more than 200 gigawatts of solar
energy potential and 157 gigawatts of offshore wind technical
potential, of which around 35 gigawatts is considered economically
viable.


“This is the significant renewable energy potential that
Azerbaijan has. As SOCAR Green, we are also among the parties
interested in developing renewable energy projects in Azerbaijan.
This shows that Azerbaijan has already taken important steps. I
think the starting point was the regulatory and legal environment
in Azerbaijan,” he noted.


Musayev also said the first phase of renewable energy
development amounted to around 2 gigawatts and was supported by a
250-megawatt/2-hour battery energy storage system.


“Because this intermittent energy puts pressure on the grid. It
is easier to integrate the first projects, but the more renewable
energy there is in the system, the greater the load on the grid and
the more additional measures are required. In this regard, the
Ministry of Energy and Azerenerji, together with foreign
consultants, are conducting grid studies.







“We are working on various innovative solutions, such as modules
that can minimize the pressure or impact on the grid, so that these
new additional projects can be easily integrated into the system.
Battery energy storage solutions can play a key role in this
regard,” he said.


The CEO noted that the cost of capital had increased after the
US Federal Reserve raised interest rates. He said it was important
to understand that the cost of financing was one of the key factors
directly affecting project profitability.


“Cooperation with international financial institutions (IFIs) is
important for us not only because of attractive financing, but also
because of their oversight of governments and their expertise in
environmental and social impacts. However, when the cost of capital
increases for objective reasons, it also becomes more difficult for
companies like ours. It is not difficult to imagine the impact this
has on other private companies that depend on capital.


“Currently, financing in Azerbaijan mainly comes from IFIs
because such projects require long-term financing, typically 15–20
years. Unfortunately, commercial banks, particularly local
commercial banks, are currently not in a position to provide such
financing. However, we believe it is very important for local banks
to play a more active role, particularly in providing long-term
financing in local currency,” he said.