QAZAQ GREEN.  The Asian Development Bank (ADB) has provided technical assistance worth $1.1 million to support the decarbonization process of the heating sector and the integration of renewable energy in Azerbaijan, Report informs referring to the ADB.

The project is funded by the Clean Energy Fund ($600,000) and the Technical Assistance Special Fund ($500,000).

The main objectives of the project are to reduce dependence on natural gas through transition to renewable energy sources, such as solar, wind and geothermal, improve energy efficiency of existing heating systems, develop new legislation, including the National Heating Strategy and legislative acts in this area, as well as optimize tariff policy to ensure financial sustainability of the sector.

"The proposed technical assistance (TA) aims to modernize Azerbaijan's heating sector by advancing efficiency, sustainability, and decarbonization. It will enhance space heating services (and potentially cooling), promote the integration of renewable energy through a small-scale pilot project, and strengthen the policy and regulatory framework. Key outputs include the development of a National Heating Strategy and the drafting of a new Heat Law, with a focus on updating regulatory instruments such as the heat tariff methodology. The TA will also assess the performance of Azeristiliktechizat OJSC (AIT), Azerbaijan's primary state-owned heating operator, and provide actionable recommendations to improve corporate governance, optimize business processes, reduce reliance on state subsidies, and enhance operational commercialization," reads the report.

"The Azerbaijani government, in collaboration with ADB, is focused on reducing natural gas dependence and lowering carbon emissions in the heating sector. Transitioning to electrical energy for space heating, which can be decarbonized through renewable sources like solar and wind, is a key strategy, although it will be a gradual process. Moreover, the potential for direct renewable energy use in heating, such as solar collectors and geothermal systems, remains largely untapped and needs to be explored and demonstrated in Azerbaijan," the ADB noted. "Current renewable energy capacity in Azerbaijan, excluding large hydropower, stands at 530 MW, accounting for 6.4% of total electricity production. The country plans to significantly increase this share by partnering with international investors to scale up wind and solar power capacities."