According to reports, the Shafag SPP represents Azerbaijan’s first industrial-scale solar energy project and stands as the largest foreign investment in the country’s recently liberated territories. This initiative is being implemented under the Agreement signed between Azerbaijan’s Ministry of Energy and BP on June 3, 2021.
During the ceremony, two key agreements were signed: the Investment Agreement between the Azerbaijani government and Shafag (Jabrayil) Solar Limited Company, and a Land Lease Agreement between the Ministry of Energy and Shafag (Jabrayil) Solar Limited Company.
The Shafag SPP is projected to generate approximately 500 million kilowatt-hours of electricity annually. This will allow for savings of 120-150 million cubic meters of natural gas and reduce carbon emissions by 260,000-330,000 tons per year.
Under the Virtual Power Transfer Mechanism (VPTA), energy generated at the plant will connect to Jabrayil’s existing power grid, while an equivalent energy amount will be supplied to the Sangachal terminal. This setup enables renewable energy to meet the terminal’s power needs and aligns with BP’s goals to lower operational emissions in the Caspian region.
This project is expected to make a significant impact on Azerbaijan’s national economy and contribute to the decarbonization goals of consortium partners, including the State Oil Company of Azerbaijan (SOCAR).
The Shafag Solar Power Plant shareholders include BP, SOCAR, and the Azerbaijan Investment Company, with the project investment estimated at around $200 million.
