Masdar has signed an implementation agreement with the government of Azerbaijan to build a 200 MW PV power project in the country.
The solar project developer, which is based in the United Arab Emirates, won the project in a tender that was launched last summer. It will build the plant at an unspecified location about 75 kilometers southwest of Baku, according to the Ministry of Energy of Azerbaijan.
“ACWA Power and Masdar have been identified as a result of a three-stage selection process between the seven companies that submitted their proposals,” the ministry said, without naming the other bidders.
The government said developers initially submitted offers in accordance with the established price range and then offered the most favorable proposals based on guarantees for investors, project locations and grid connections.
“At the third stage, negotiations were held with companies to clarify the conditions and increase the economic attractiveness of the project,” the ministry said, without disclosing final prices.
The government launched the tender earlier this year. In March, the European Bank for Reconstruction and Development (EBRD) issued an open call to hire a consulting firm to help the government of Azerbaijan to design and launch renewable energy auctions.
The bank estimates Azerbaijan’s solar potential at 8 GW. However, very little solar has been built in the country thus far. By the end of 2018, just 36 MW of PV capacity had been installed, according to the International Renewable Energy Agency (IRENA).
The government aims to reach a renewables share of around 20% of the national energy mix by 2020, and plans to increase that to 30% by 2025 and 50% by 2050. If achieved, the 2020 target will bring approximately 600 MW of solar power online. Azerbaijan’s electricity sector is currently dominated by state-owned AzerEnerji, which oversees generation and transmission, and state-run Azerishiq, which handles distribution.