The government of Azerbaijan will provide AZN102 million ($60 million at the current exchange rate) for the construction of the 240 MW Shafag solar farm in Jabrayil district with UK oil and gas major BP plc , the country's Finance Ministry told Interfax.
"The Azerbaijani government's share in the joint project with BP to build this solar farm amounts to AZN102 million. Of these funds, AZN47 million ($27.6 million) had been allocated from the state budget as of the end of 2024," the ministry said. The total cost of the project is estimated at about $200 million.
The foundation for the solar plant was laid in November 2024. Construction will continue until November 2025, when commissioning trials will begin, and the plant will go into commercial operation in December.
The solar farm is expected to generate about 500 million kWh of electricity per year, representing savings of 120 million-150 million cubic meters of natural gas and a carbon emission reduction of 260,000-330,000 tonnes per year.
BP, State Oil Company of Azerbaijan Republic (SOCAR) subsidiary SOCAR Green and Azerbaijan Investment Company (AIC) formed the joint venture Shafag (Jabrayil) Solar Limited (SJSL) in early October 2024 for the project to build the solar farm. Joint investment related to the project is financed through the joint venture, which is 50.01% owned by BP, 39.99% by SOCAR and 10% by the AIC.
President Ilham Aliyev said earlier that the Shafag solar farm will make it possible to provide power to the Sangachal oil and gas terminal and export the gas currently used to generate power for the terminal's needs to Europe.
Azerbaijan's Energy Ministry and BP signed a cooperation agreement on June 3, 2021 to assess and carry out the project to build the 240 MW solar farm. SOCAR and AIC signed an agreement to join the project with BP on September 21, 2023.
