30 October 2015

  • GGF
  • End-Borrower Stories
  • Azerbaijan

Raising efficiency in greenhouse growing

Vegetable Greenhouse in Shabran, Azerbaijan
Vegetable Greenhouse in Shabran, Azerbaijan

Azerbaijan, with its vast oil and gas reserves, exports energy and this sets the country apart from many others in the GGF’s target region. Despite comparably low power and gas costs at the commodity price level, however, energy remains expensive for Azeris.

This is mainly a consequence of the very low degree of energy efficiency throughout the country’s economy. Here, as well as in terms of the environmental impact of energy-inefficient industrial and residential infrastructure, the similarities with most other target partners are again quite obvious. Besides enabling Azerbaijan to fully benefit from its natural resource boon, raising energy efficiency will drive a virtuous spiral. Lower energy service costs, improved competitiveness but also less acid rain and greenhouse gas emissions would be just the main positive corollaries.

In 2014, the GGF made its first investment in Azerbaijan with a USD 15 million energy efficiency senior loan to AccessBank, which is specialized in microfinance. The purpose of the credit facility was to strengthen the bank’s long-term financing ca pa cities and enable it to offer attractive loan products – to incite business customers to invest in much-needed EE plant and equipment modernization and encourage households to upgrade their insulation.

One of AccessBank’s customers, the owner of a vegetable greenhouse in Shabran, faced various challenges. Because ventilation and irrigation needed to be operated manually, he had 10 employees manning the systems in shifts all day and night. Even though the boiler was running 24 hours a day, it was not possible to maintain the 18°_C necessary to ensure optimal growth conditions. Tomatoes and cucumbers, the main crops, suffered especially. The high labor and energy costs, combined with the loss of productivity, increasingly ate into the bottom line. Compounding this precarious situation, the manual irrigation system did not have a functional dosing mechanism – not only was water being wasted, crops were lost to overwatering, too.

With a GGF-funded credit line of around 248,000 USD from AccessBank, the greenhouse owner will be able to install a new ventilation systems for seven greenhouses as well as two 7.5 kW irrigation pumps operated through a centralized control system. The irrigation system will be upgraded as well with a dosing system for plant protection treatments to maximize yield.

In terms of environmental impact, the combined measures are projected to reduce primary energy savings by 73 percent, i.e. from currently 167,883 kWh/year to 46,035 kWh/year. CO2 emissions will be reduced by just over 64 percent as well: from 56,223 kg/year to 20,164 kg/year.


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