Azerbaijan Heating Sector Decarbonization: Efficiency Enhancement and Renewable Heat Integration through Small-Scale Pilot Demonstration

Proposed

The proposed TA aims to support modernizing Azerbaijan's heating sector by enhancing efficiency, sustainability, and decarbonization. It will focus on improving space heating (and potentially cooling) services and increasing the integration of renewable energy through a small-scale pilot project demonstration. The TA will support the development of a National Heating Strategy and the drafting of a new Heat Law, which will include updates to regulatory frameworks, particularly the heat tariff methodology. Additionally, the TA will evaluate the performance of Azeristiliktechizat OJSC (AIT), Azerbaijan's primary state-owned heating operator, and provide recommendations on corporate governance, business process improvements, reducing state subsidies, and commercializing operations.