Green Finance Instruments for Supporting Solar Energy Development in Azerbaijan

Abstract

This study examines how green finance tools support the development of solar energy in Azerbaijan. It focuses on how financial methods like green loans, green bonds, power purchase agreements, renewable energy auctions, tax and customs incentives, and international development finance can boost solar energy investments in the country. The research is based on an analysis of official reports and policy documents from the Ministry of Energy of the Republic of Azerbaijan, the Central Bank of Azerbaijan, the State Statistical Committee, Azerenerji OJSC, and the Azerbaijan Renewable Energy Agency. The findings show that Azerbaijan has a lot of solar energy potential and has started a new phase of large-scale solar development with projects like the Garadagh, Gobustan, Shafag, Bilasuvar, and Neftchala solar power plants. The results also indicate that building a sustainable finance system, which includes green taxonomy, green loans, green bonds, and managing climate-related risks, is crucial for making solar energy projects financially viable. The study concludes that solar energy development in Azerbaijan needs a coordinated policy framework that combines government support, private investment, international finance, modernization of the grid, and clear market-based mechanisms.