EBRD to provide $100M to Azerbaijan for green economy program

The European Bank for Reconstruction and Development (EBRD) is considering launching a Green Economy Financing Facility (GEFF) programme in Azerbaijan, Report informs.

According to the EBRD, Green Economy Financing Facility - Azerbaijan is a $100 million programme to support green financing of eligible Partner Financial Institutions (PFIs) in Azerbaijan over a five-year period. 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 program is scheduled for approval by the bank's Board of Directors on December 3.

"The proposed Facility introduces a pilot Green Economy Financing Facility in Azerbaijan. Its primary objective 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," the EBRD says.

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 EBRD says.

The Facility will be supported by a Technical Cooperation (TC) package of up to $3.0 million for overseeing the general management and operation of the Facility, origination, review and approval of sub- projects, and other activities including product design, marketing and training. The TC will be funded by various donors, including the Government of Azerbaijan, and SSF.

It will also be supported bya Concessional Finance of up to $4 million for Results Based Compensation payments to the PFIs. The Concessional Finance will be funded by various donors.

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