EBRD and GEF help Azerbaijan’s Baku Electronics increase energy efficiency.
Azerbaijan, nestled in the cradle of Europe and Asia, has always occupied a prime location on the trade routes linking East and West.
In the days of the Silk Road, craftsmen and merchants would trade goods such as fabrics and carpets and other technological innovations in caravanserais.
Today cities such as the country’s capital, Baku, are re-emerging as exciting trade hubs, perfect settings for the entrepreneurial talents of modern-day merchants such as two sets of brothers, the Nakhjavanis and the Eromis.
“Right after the collapse of the Soviet Union we and the Eromi brothers left our home in Tabriz, Iran, and drove to the Azerbaijan border for the first time in our lives,” said Said Nakhjavani, the second of the four Nakhjavani brothers and one of the founders of Baku Electronics.
“We had a single question in mind: which product is missing? We soon came to realise that there was not a single electronics store.”
In 1994, the families purchased 180 television sets and displayed them on top of empty boxes in the streets of Baku.
This marked the launch of Baku Electronics, today the largest “techno-store” in the Caucasus and the market leader of electronic goods and home appliances in Azerbaijan, with over 15 per cent of market share.
“Given the sudden hype, we decided to expand our product range to electronic accessories, household appliances, mobile phones, bikes and sport gadgets and, more recently, a whole textile and homeware section,” explains Ibrahim Behram Eromi, the eldest Eromi brother.
Baku Electronics was also the first company in Azerbaijan that offered its customers credit.
The combination of a wide range of products together with an easy way to finance buying them prompted costumers to shop in just one location, a concept that was completely new to the country’s retail sector at the time.
This “one-stop-shop” concept, together with the brothers’ ambitious design ideas, made finding real estate that would accommodate the unique needs of their “techno-stores” impossible.
So in 2007 the brothers reached out to the EBRD for help.
With the EBRD’s funding, Baku Electronics has now built three new, green, multi-brand stores.
Given the abundance of gas and oil resources in Azerbaijan, energy efficiency in the construction sector did not seem much of a concern. Energy tariffs are very low and do not include environmental costs. This, in turn, discourages energy efficient behaviour. But the brothers knew better.
“As part of our own social responsibility, it was a priority for us to be green. We want to raise our customers’ awareness of environmental concerns too, so we make sure we focus on energy efficient products, not only with what we sell, but also with what we use,” explained the eldest Nahkjavani brother, Habib.
Through the support of FINTECC, funded by the Global Environment Facility, the company installed hefty coated glass windows with low transmittance throughout the store, resulting in a significant reduction in energy use.
This type of insulating glass optimises the use of natural light while also protecting store items from damaging UV radiations. These energy efficient windows also help reduce heat loss, keep the store warmer and lower heating bills.
This translated into up to 6,000 MWh per year in energy savings and a reduction of 2,000 tonnes of CO2 emissions per year. It is equivalent to taking 500 cars off the road.
Developing new energy efficient measure is crucial in Azerbaijan, which continues to be one of the most energy-intensive countries in the region and where the oil and gas sector still dominate much of its economy.
The EBRD’s FINTECC programme helps companies implement advanced climate technologies that reduce greenhouse gas emissions and increase climate resilience by providing grants and technical assistance.
In total, FINTECC’s work has helped to reduce annual CO2 emissions by some 230,000 tonnes, equivalent to taking 48,000 cars off the road for one year, while total water savings amount to 1.6 million cubic metres and materials savings to 44,000 tonnes.