The Asian Development Bank is ready to allocate some $40 million to Azerbaijan for developing alternative and renewable energy sources, ADB reported on its official website on May 10. According to the report, the Project aims to promote renewable energy development in Azerbaijan through developing two pilot renewable energy projects (biomass cogeneration) with a total installed capacity of 16 megawatt (MW) for efficient electricity and heating supply in Oghuz and Agjabedi regions. The project outputs will consist of construction of two biomass cogeneration plants in Oghuz and Agjabedi regions, construction of heating supply systems in Oghuz and Agjabedi regions, and project management and supervision, including consultancy services for project supervision, safeguards compliance, reporting, and capacity building for the executing agency. According to the Bank, experiences from many other countries demonstrate that biomass power generation is an effective and economic solution to convert biomass fuel to electricity and heat. With the project, it is estimated that about 95 million cubic meters of natural gas will be saved per year for export, thus increasing the government revenue by at least $5.6 million per year. The project will also result in avoidance of GHG emissions, and a reduction of 24,000 tons of carbon dioxide equivalent per year. The Government of Azerbaijan is committed to promote renewable energy and sustainable development to ensure environmental safety. Azerbaijan s total electricity production in 2011 reached 19.2 terawatt hours (TWh), of which 82% was generated from thermal power (gas-based) and 18% from hydropower. Currently about 38 percent of the greenhouse gas emissions comes from thermal power generation plants. With increased renewable energy, the government could reduce GHG emissions, as well as increase export revenues and reduce gas subsidies. Azerbaijan has a large potential for renewable energy, which to date remains largely untapped. The