BP, SOCAR, Azerbaijan Investment Co form JV for 240 MW Shafag solar power plant project

BAKU. Oct 2 (Interfax) - BP has signed a shareholders agreement with SOCAR Green and Azerbaijan Investment Company (AIC), forming the new Shafag (Jabrayil) Solar Limited (SJSL) joint investment vehicle for 240MW Shafag solar power plant to be built in Azerbaijan's Jabrayil region, BP said in a press release.

The shareholders agreement will become effective upon fulfillment of certain commercial and regulatory conditions. BP will own 50.01%, SOCAR - 39.99% and AIC - 10%.

"The Shafag project is expected to pilot a new commercial structure called a Virtual Power Transfer Arrangement, which if implemented will enable the project to produce solar power and deliver it to the national power grid operator, AzerEnerji, in the Jabrayil region. AzerEnerji would then deliver an equivalent quantity of electricity to the Sangachal terminal near Baku, which would in turn enable the terminal to use this renewable electricity for its energy needs," BP said.

Azerbaijani President Ilham Aliyev has said the construction of the Shafag SPP would provide electricity to the Sangachal oil and gas terminal and export the gas that is made available to Europe. It is expected that the solar power plant will generate 500 kWh of electricity per year.

The Azerbaijani Energy Ministry and BP signed an executive cooperation agreement on June 3, 2021 on the assessment and implementation of a project for the construction of a 240 MW capacity solar power plant in the Jabrayil region. Investments in the project are estimated at $200 million.

The State Oil Company of the Azerbaijani Republic (SOCAR) and the Azerbaijan Investment Company signed an agreement with BP to join the Shafag SPP construction project on September 21, 2023.