BP to start building $200 mln solar power plant in Azerbaijan in 2025

BAKU. Jan 24 (Interfax) - Construction of the 240 MW Shafag solar power plant in Azerbaijan's Jabrayil district will begin this year, Bakhtiyar Aslanbayli, BP's vice president for the Caspian region, told reporters.

"An investment agreement was signed for Shafag SPP in November 2024, in the framework of COP29. The site for the plant has already been cleared and the certification process remains. The feasibility study is also ready. The final investment decision is expected to be made this year. The physical construction of the plant will also begin this year," Aslanbayli said.

He said that following the investment decision, contracts would be concluded and equipment selected, and depending on this, the start and completion dates for the station's construction would be clarified.

The groundbreaking ceremony for the $200 million Shafag solar power plant took place on November 12, 2024. Two documents were signed: an investment agreement between the government of Azerbaijan and Shafag (Jabrayil) Solar Limited (SJSL) and a land lease agreement between the Azerbaijani Energy Ministry and SJSL.

It is expected that the solar power plant will generate 500 kWh of electricity per year, saving 120 million-150 million cubic meters of gas and cutting carbon emissions by 260,000-330,000 tonnes per year.

BP plc , SOCAR Green and Azerbaijan Investment Company (AIC), forming the new Shafag (Jabrayil) Solar Limited (SJSL) joint investment vehicle for the Shafag solar power plant at the beginning of October. BP will own 50.01%, State Oil Company of the Azerbaijani Republic (SOCAR) - 39.99% and AIC - 10%.

Azerbaijani President Ilham Aliyev has said the Shafag SPP would provide electricity to the Sangachal oil and gas terminal and export the gas made available to Europe. This gas is currently used to generate electricity at the terminal itself for internal needs.

The Azerbaijani Energy Ministry and BP signed an executive cooperation agreement on June 3, 2021 on the assessment and implementation of a project for the construction of a 240 MW capacity solar power plant in the Jabrayil region. The SOCAR and the Azerbaijan Investment Company signed an agreement with BP to join the Shafag SPP construction project on September 21, 2023.