A joint venture (JV) featuring global oil major bp has reached a final investment decision, and will begin construction, on a 240MW solar PV project in Azerbaijan.
Shafag Solar – a JV between bp, the Azerbaijan Business Development Fund and Azerbaijani energy firm SOCAR Green – will begin construction on the Shafag solar project in the Jabrayil district of Azerbaijan, following the closure of the investment.
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The project is contracted under a utility power purchase agreement (PPA) between state-owned power provider AzerEnerji and Shafag Solar, as well as a transmission connection agreement. The US$200 million site is expected to be under construction until mid-2027, to be developed and managed by bp’s fully owned solar development subsidiary, Lightsource bp.
Another bp undertaking – the Sangachal terminal electrification (STEL) project – has also been sanctioned in conjunction with the solar project. STEL is a JV featuring a trio of global fossil fuel majors: bp, ExxonMobil and TotalEnergies, alongside a number of Azerbaijani entities. The project will enable connection between the terminal and the national grid, operated by the state-owned power provider AzerEnerji, as well as adding a new 220/110 kV substation.
The Sangachal terminal is an industrial oil and gas processing complex on the coast of the Caspian Sea, south of Baku.
The two projects will be linked, bp said, by a structure called a “virtual power transfer agreement“. Power from the solar project will be delivered to AzerEnerji in the Jabrayil district, and AzerEnerji will deliver the equivalent amount of power to the STEL site near Baku.
Bp said the arrangement will reduce operational emissions at the Sangachal terminal, which currently runs on seven gas turbines. As it is electrified, the turbines will be removed.
“Within the framework of president Ilham Aliyev’s policy of promoting the use of green energy, the completion of this important phase by both the Shafag and Sangachal terminal electrification projects opens a new chapter in our country’s strategic energy partnership with bp,” said Parviz Shahbazov, minister of energy of Azerbaijan.
Aliyev announced plans to deploy 6GW of renewable energy in Azerbaijan by 2030, during a conference at the COP29 summit in Baku last year. At the time, he said that 10GW of contracts and memoranda of understanding (MOU) had been signed, including a mammoth agreement with the Emirati state-owned renewable energy developer, Masdar.
Earlier this year, bp made controversial headlines with its plans to divest its ownership of Lightsource bp. The move came as part of plans to move away from renewable energy following the election of US president Donald Trump. PV Tech Premium heard in February that the course change could face legal action.
