Azernews.Az

BAKU – Russia's second-largest bank, VTB, and Azerbaijan Methanol Company (Azmeco) have signed a loan agreement worth $30 million on the construction of a methanol plant in Baku, the only such facility in Transcaucasia and Central Asia.

Production capacity of the plant, to be based in the Garadagh district, south of the capital Baku, will be 720,000 metric tons of methanol per year with a possibility of recycling CO2.

The uniqueness of this project, according to Azmeco President Nizami Piriyev, is that methanol is "energy of the 21st century", as Nobel Prize winner George Olah said. It is possible to substantially reduce harmful emissions and thus save the environment with the use of methanol in the energy sector, Piriyev said.

Azerbaijani consulting company ACG is the financial advisor to the agreement.

VTB is an international financial group represented in 21 countries in Western Europe, Asia and Africa. Its main shareholder is the Russian government with a share of 75.5 percent.

VTB Bank Azerbaijan is a subsidiary of VTB and offers a wide range of banking services.

Azmeco was founded in 2007 to invest in petrochemical projects as an owner and operator. The company is wholly privately owned and leads the way in development, implementation and financing of large projects in Azerbaijan.

Earlier, the European Bank for Reconstruction and Development (EBRD) allocated a $120 million loan to Azmeco to finance construction of the methanol plant.