ADB funds Azerbaijan power transmission project

Sep 11, 2008 - Xinhua

The Asian Development Bank (ADB) on Thursday said it is helping Azerbaijan upgrade its aging power transmission facilities through a 160-million-U.S.-dollar loan.

The regional bank said the 25-year loan will help build a double-circuit 220 kilovolt transmission line and associated substation facilities, replacing two existing lines which have been in use for about 60 years by state-owned power company Azerenergy.

The energy sector plays a central role in Azerbaijan's economy, contributing one-third of the country's gross domestic product in 2007. But unlike oil and gas, the power transmission and distribution industry has suffered from a major lack of investment.

The upgrade will remove transmission choke points, lower system losses, and provide a more stable power supply, especially in the key Azeri industrial hub, near the capital city of Baku.

It will also cut the need for imported electricity, optimize the country's hydropower resource, and reduce fossil fuel consumption and pollution.

Over 20 percent of Azerbaijan's energy equipment and more than half of its network facilities are well beyond their useful life, resulting in frequent power failures, system losses, and the threat of a collapse of the energy grid.

ADB said improved power supply benefit rural dwellers that makeup for nearly half of the 8.5 million population.