Azerbaijan is to gain a further 250 MWh of battery storage, as PASHA Bank has agreed to lend $40 million for a 125 MW BESS that YEO Teknoloji of Turkey will build on a turnkey basis. The project has been valued at $58.6 million, and it will be connected to the grid through a new high-voltage substation.
Bank loan: $40 million
Project value: $58.6 million
System size: 125 MW/250 MWh
Contractor: YEO Teknoloji
Grid operator: Azerenerji
Contract model: Turnkey EPC-F
New substation: High-voltage
PASHA Bank, an Azerbaijan-based lender, is to provide a loan of $40 million for a 125 MW/250 MWh BESS in the country, a project that has been valued at $58.6 million in all. The bank announced the financing on 21 October 2026 and has described the system as the largest energy storage project in the region. Its Deputy CEO, Bahruz Naghiyev, and Tolunay Yıldız, the Chairman and CEO of YEO Teknoloji, attended the signing ceremony on behalf of the two companies.
The system is to be built by YEO Teknoloji, a Turkish energy technology company, on a turnkey basis under the EPC-F model. Under this arrangement, the contractor will be responsible not only for the engineering, procurement and construction of the plant, but also for arranging its financing. With a rating of 125 MW and 250 MWh, the battery will be able to discharge at full power for about two hours, and a new high-voltage substation is to be built alongside it to link it with the grid.
The loan has been arranged for a contract that the Turkish company had already secured. Azerenerji, the grid operator of Azerbaijan, signed the $58.6 million EPC-F agreement with YEO Teknoloji, which announced the award on 21 September 2026. A month later, on 20 October, the company informed the stock exchange that the project finance agreement with PASHA Bank had been signed, that the conditions of the loan had been fulfilled and that the funds had been drawn.
According to the bank, the battery is intended to improve the stability of the grid, to help keep the generation of electricity in balance with its consumption and to make better use of power from renewable sources. It is also expected to strengthen the energy security of Azerbaijan. For PASHA Bank, the deal extends its lending in the energy sector, where its earlier green financing has gone to energy efficiency, sustainable infrastructure, low-carbon transport and decarbonisation projects.
The project will come at an early stage in the build-out of storage in Azerbaijan, where two energy storage systems with a combined capacity of 500 MWh were commissioned only in the second quarter of 2026. Once it has been completed, the new BESS will raise that total by half, to 750 MWh. On the other side of the Caspian Sea, Uzbekistan has moved further ahead: AMEA Power signed agreements for a 250 MW/1 GWh BESS in the Bukhara Region on 16 October, Masdar is developing the 300 MW/600 MWh first phase of its Zarafshan BESS, and a 119.25 MW/265 MWh grid-forming BESS in the Namangan Region has completed black start validation.