bp, being initially the sole investor in the Shafag project, a 240MW AC solar plant to be built in the Jabrayil region of Azerbaijan, today signed a shareholders’ agreement (SHA) with SOCAR Green (SOCAR) and the Azerbaijan Investment Company (AIC), forming a new joint venture called Shafag (Jabrayil) Solar Limited (SJSL), which will be the joint investment vehicle in the project, bp told AZERTAC.
This follows the signing of an accession agreement between the same parties in September last year, which initiated negotiations for the SHA.
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.
The SHA was signed by Colin Allan, bp’s vice president of finance for Azerbaijan, Georgia and Türkiye, on behalf of SJSL; Noelia Marivela Alvarez, bp’s vice president for solar and onshore wind on behalf of bp as a shareholder in SJSL; Rovshan Najaf, President of SOCAR, on behalf of SOCAR Green; and Ulvi Mansurov, Executive Director of AIC, on behalf of AIC.
Addressing the signing event, Colin Allan said: “We are very pleased to welcome SOCAR and AIC as our new partners in such an important potential project. This addition will help accelerate the delivery of the development and establish a new frontier of cooperation with SOCAR and the government of Azerbaijan. We can now combine each partner’s deep expertise to support a truly innovative approach as we look to decarbonize the Sangachal terminal and help drive down operational emissions in the Caspian region”.
SOCAR President Rovshan Najaf said: "A new phase is unfolding in the long-standing, mutually beneficial cooperation between SOCAR and bp. I would like to express my great pleasure that this partnership, which began with the signing of the ‘Contract of the Century’ thirty years ago, continues to thrive and expand to this day. I am confident that through our joint efforts, the successful implementation of the ‘Shafag’ project in the Jabrayil district will not only play a significant role in developing Azerbaijan’s renewable energy potential but will also make a major contribution to the extensive work transforming the liberated territories into a ‘green energy’ zone."
Ulvi Mansurov of AIC said: “This project is of great strategic importance to the Azerbaijan Investment Company, as it represents our key investment in the liberated territories of Azerbaijan. We are proud to be part of a venture that not only supports the country’s goal of increasing the share of renewable energy sources to 30% by 2030 but also contributes to the economic development of the Jabrayil region. Together with our partners, we look forward to realizing this vital project, which aligns with our government’s vision of transforming the liberated territories into a 'green energy' zone."
The SHA will become effective upon fulfillment of certain commercial and regulatory conditions. Once the SHA becomes effective, the participating interests of SJSL shareholders will be: bp - 50.01%, SOCAR - 39.99% and AIC - 10%.
