DUBAI: Saudi Arabia and Azerbaijan have signed groundbreaking agreements for $300 million worth of renewable energy projects in the Caspian country.
The Kingdom’s energy leader ACWA Power will develop Azerbaijan’s first wind power development in collaboration with local entities, in three deals that could herald further joint energy projects between the two countries.
At a virtual signing ceremony, Prince Abdul Aziz Bin Salman, Saudi Arabia’s energy minister, said that the collaboration was a further example of the “long-standing diplomatic and economic relationship” between the Kingdom and Azerbaijan.
“Saudi Arabia is delighted to be a partner in the future growth and development of Azerbaijan through helping it on its renewable energy journey. I am proud to say that the project has been made possible through Saudi expertise and capabilities,” he said.
“ACWA Power is a Saudi national champion in energy, and it will be leveraging its experience, and its track record in successful renewable projects, to help Azerbaijan deliver this strategically important development,” he added.
ACWA, which is 50 percent owned by the Public Investment Fund, is one of the main agencies for the Kingdom’s initiatives in domestic and global renewable energy, and high-tech water desalination processes.
Its chairman, Mohammed Abunayyan, said that the agreements were a “milestone and a strong step on the road toward full realization of the potential renewable energy in Azerbaijan.”
Prince Abdul Aziz praised Azerbaijan for its commitment to cuts in oil supply during recent OPEC+ negotiations. “The Kingdom appreciates Azerbaijan’s role in fulfilling its obligations under the declaration of cooperation of OPEC+, and the high level of compliance it has achieved,” he said.
Parviz Shahbazov, Azerbaijan’s energy minister, said the deals were an “indication of confidence in the business climate in Azerbaijan, and will represent the next stage of economic cooperation between our two countries.”
The projects — in the Absheron and Khizi region of Azerbaijan — will help generate one billion KW hours of electricity annually and save 220 cubic meters of gas, as well as reduce emissions by 400 million tons annually, Shahbazov estimated.
“I am confident that other companies from Saudi Arabia will follow the example of ACWA and invest in Azerbaijan,” he added.
Azerbaijan produces just under 600,000 barrels of oil per day under OPEC+ agreements, but has said it would like to follow the example of Russia and some other producers in supporting an OPEC+ increase of a further 500,000 from February.