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EBRD supports diversification of economy in Azerbaijan

By Ina Coretchi

The EBRD’s Board of Directors has approved a $120 million funding package to finance the construction of a methanol plant in Azerbaijan that will add value to the country’s important reserves of natural gas.

The transaction, the EBRD’s largest investment to date in a locally-owned private company in Azerbaijan, Azerbaijan Methanol Company (AzMeCo), will finance the conversion of Azerbaijan’s natural gas into methanol for export.

This has the benefit of diversifying the utilisation of the country’s gas reserves and adding value to this key natural asset.

Located in the Karadagh region south of the capital Baku, the AzMeCo plant will have a production capacity of 561,000 tonnes of methanol per year.

In future the company will diversify its output to include urea and ammonia. The AzMeCo facility will also include a CO2 capture plant, thus setting new and improved environmental standards in Azerbaijan’s industrial sector.

The financing package provided by the EBRD to AzMeCo includes a $90 million loan and a $30 million quasi-equity facility. With total project cost exceeding $300 million, the project will be co-financed by the International Bank of Azerbaijan.

The project will stimulate the development of petrochemical cluster in Karadagh, which will generate more investments and new employment opportunities in the country.

Since the beginning of its operations in Azerbaijan, the EBRD has committed over $1 billion across more than 90 projects in corporate, financial, infrastructure and energy sectors.

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