EBRD approves $100M for Azerbaijan's green economy financing program

The European Bank for Reconstruction and Development (EBRD) has approved $100 million (approximately €85.6 million) for Azerbaijan's Green Economy Financing Facility (GEFF), Report informs referring to the EBRD.

GEFF is a five-year project aimed at supporting green finance through selected local partner financial institutions (PFIs).

PFIs will utilize the Facility's proceeds to on-lend to eligible private sector sub-borrowers for investments in energy efficiency, renewable energy, resource efficiency, circular economy, and climate resilience.

The primary objective of the GEFF is to drive the delivery of Green Economy Transition (GET) in Azerbaijan by supporting PFIs in financing green investments for eligible borrowers, including retail, MSMEs, and corporates. The Facility will provide both funding and technical expertise to financial intermediaries, enabling them to support green technologies and solutions while strengthening institutional capacity at the PFIs.

Additionally, the Facility aims to address barriers to green lending and promote equal access to green finance for women and men. The Facility also seeks to build on Azerbaijan's growing green momentum, supported by active regulatory engagement and increased public awareness following the COP29 held in Baku, Azerbaijan, in November 2024.

The Facility supports the Green Transition Impact quality by contributing to the development of a green economy, channeling funding toward green technologies and services in the private sector, and fostering the transformation of local financial systems. Facility is 100% GET.

Borrowers under the Facility will be Financial Institutions in Azerbaijan, including banks, micro- finance institutions, and leasing companies, with a strong commitment to scaling green financing. Eligible PFIs will include existing partner banks in Azerbaijan and potentially new partners to be selected in line with the Bank's standard approach. The final beneficiaries of the Facility are MSME and corporate businesses and households in Azerbaijan.

The program will include a technical assistance package of up to $3 million (€2.8 million), covering project management and coordination, subproject selection, development of new financial products, marketing, and training.

In addition, concessional financing of up to $4 million (€3.4 million) is provided for performance-based payments to financial intermediaries.

According to the EBRD, as of September 30, 2025, the bank's current loan portfolio in Azerbaijan amounted to €948 million. Of this, 89% (€842 million) is allocated to the development of sustainable infrastructure, 6% (€56 million) to the financial sector, and 5% (€49 million) to the corporate sector.