Azerbaijan: MCCF signs first project

The EBRD-EIB Multilateral Carbon Credit Fund (MCCF) and Azerenerji Joint Stock Company are collaborating in order to promote energy-efficient power generation in Azerbaijan.

Azerenerji JSC and Stichting Carbon Purchase Intermediary (CPI), a special purpose vehicle created to acquire carbon credits for the participants in the MCCF, have signed an emission reduction purchase agreement (ERPA) for the sale and purchase of certified emission reductions to be generated by the rehabilitation of the Azerbaijan Thermal Power Plant in Mingäçevir, in north-western Azerbaijan.

This ERPA is the first of its kind to be executed under the MCCF in Azerbaijan and was negotiated by ICF Consulting Ltd., acting as Carbon Manager for MCCF, with Azerenerji JSC.

The project will rehabilitate seven 300 MW power generating units, the cooling system and chimney-1 of the Azerbaijan Thermal Power Plant. This will increase company’s energy efficiency from 32% to 41% and will reduce CO2 emissions.  Other benefits include reductions in atmospheric pollutants as well as improved reliability of power supply.

The project is also unique as it will use a new Clean Development Mechanism (CDM) methodology for power plant rehabilitation projects, which has been approved by the CDM Executive Board.

The MCCF, one of the few carbon funds dedicated specifically to countries in the Caucasus, Central and Eastern Europe, and Central Asia, was launched in December 2006 and is sponsored by the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

A state owned company, Azerenerji JSC is the leading power company in Azerbaijan.