MINGECHAUR POWER PROJECT

complete

The project comprises: (i) the replacement of the existing four generator units at Mingechaur Hydropower Plant; (ii) reconstruction of the back-up 120 km high-voltage power transmission line (330kV); and (iii) installation of a sub-station at Agcabedi with associated connection line (110 kV) to the Barda region. The project objectives are to: (i) complete commercialisation of the power sector; (ii) reduce consumption of fossil fuel and atmospheric pollution by substituting hydropower for tradable oil and imported gas; and (iii) improve energy efficiency by reducing power transmission losses. Azerenerji was transformed into a joint-stock company in accordance with the loan agreement under the Yenikend renewable energy project (signed December 1994). The second loan will enable the Government to complete the commercialisation of Azerenerji, to further increase tariff and financial discipline in the sector and to set up a transparent legal and regulatory system. The proposed project will encourage the process of privatisation of selected power stations, which is being discussed with several investors. The borrower is Azerenerji, a state-owned joint-stock power company responsible for power generation, transmission and distribution as well as the operation of the country's heating systems. EBRD loan of US$ 21.65 million (ECU 19.86 million). Co-financed with Azerenerji, Islamic Development Bank and EC Tacis. US$ 44.62 million (ECU 40.94 million). The project was screened as category B/1, requiring partial environmental assessment and environmental audit. Under the Bank-funded technical cooperation, an international consultant prepared the Environment Audit and Assessment Report for the project. Technical cooperation funding of US$ 2.89 million was arranged to improve Azerenerji's commercial management system and to prepare an action plan for development of the power market.