BAKU, Azerbaijan, May 5. The latest report from
FDI Intelligence, a division of the Financial Times, named Baku the
third most sought-after investment destination globally.
As per the report, the agreements reached last year regarding
foreign direct investments in Azerbaijan mark the largest projects
since 2017. As such, in 2023, the economy of Azerbaijan saw a hefty
influx of foreign direct investments totaling $6.7 billion. The
leading contributors to Azerbaijan’s economy were the UK, with $1.9
billion, Türkiye with $1.3 billion, Cyprus with $792 million,
Russia with $617 million, and Iran with $396 million.
Azerbaijan’s welcoming business climate and promising investment
opportunities have been drawing in a multitude of foreign
investors. Across various sectors of the economy, pivotal projects
are underway, spearheading innovation and growth while
simultaneously fostering the creation of new employment
opportunities for the country’s workforce.
Last year, an agreement was inked with between Azerbaijan’s
Investment Company (AIC) and Hungary’s Hell Group. As per the deal
inked, a new factory with an annual production capacity of 700
million aluminum beverage cans is set to be constructed in the Alat
Free Economic Zone. The goods produced will cater to local demand
and will also be exported to Central Asian countries. The project
with a hefty investment of $211 million aims to generate over 300
job opportunities.
Another major venture set to receive substantial investment in
Azerbaijan involves the production of electric motor buses through
a partnership with the Chinese BYD Company Limited within the
Sumgayit Chemical Industry Park. Initially, BYD has earmarked $34
million for the project, with an additional $60 million planned for
investment in projects aimed at creating added value. The project
aims to generate 800 new job opportunities. Starting from the third
year of production, there are plans to localize spare parts for
electric motor buses.
Moreover, with the participation of the Turkish firm “Gen İlaç
ve Sağlık Ürünleri Sanayi ve Ticaret A.Ş.”, a project is slated for
launch in the Pirallahi Industrial Park in 2023, with an investment
outlay of $35 million. Additionally, construction is underway for a
pharmaceutical facility in the Alat Free Economic Zone in
collaboration with the Israeli BioPharmax company, with a project
cost amounting to 45 million euros.
Azerbaijan has forged highly successful partnerships with energy
companies from Arab nations. One notable example is the
collaboration with the UAE’s Masdar, which has been actively
engaged in Azerbaijan since 2020. Masdar achieved a significant
milestone with the successful launch of the 230 MW Garadagh solar
plant in October 2023.
Furthermore, Masdar has entered into agreements to develop
onshore wind and solar projects, as well as integrated offshore
wind and green hydrogen projects, boasting a combined capacity of
4GW in the country. Remarkably, Masdar and Azerbaijan have mutually
agreed to an option to expand the total capacity of renewable
projects to an impressive 10GW, spanning across various
technologies. Moreover, it has been revealed that Masdar will kick
off the construction of several renewable energy projects in
Azerbaijan this November, with a total value surpassing $1
billion.
In 2019, Saudi Arabia’s ACWA Power made its debut in Azerbaijan.
Currently, the company is developing a 240 MW wind power plant in
Azerbaijan, with a total investment of $286 million. The EBRD
facilitated a syndicated loan of $197.1 million (186.9 million
euros) to ACWA Power Azerbaijan Renewable Energy on October 26,
2023. Additionally, the OPEC Fund approved a $50 million loan to
ACWA Power Wind Azerbaijan Renewable Energy on December 15 of this
year, aimed at supporting the construction of the Khizi-Absheron
wind power plant.
Earlier this year, ACWA Power signed four implementation
agreements for major projects, including a 1GW onshore wind farm, a
1.5GW offshore wind farm, and a battery energy storage project, in
collaboration with the Ministry of Energy.
So, these are just a few examples of Azerbaijan’s successful
investment partnerships with a wide array of global counterparts.
Ongoing discussions with both existing and potential partners focus
on attracting investments into new ventures. Recently, for
instance, Azerbaijan and Kazakhstan established a joint investment
fund aimed at attracting bilateral investments across various
sectors. Additionally, at the recent Tashkent Investment Forum,
Azerbaijan and Uzbekistan explored new avenues for investment
collaboration.
With the COP29 conference scheduled for November this year,
Azerbaijan aims not only to promote the climate agenda but also to
showcase investment opportunities to potential partners. Notably,
significant investment prospects are emerging not only in Baku but
also in the liberated territories of Azerbaijan, offering
opportunities in the energy sector, agriculture, transportation
infrastructure development, and various other industries. Companies
from Türkiye, Russia, Israel, Germany, and other nations are
already capitalizing on these opportunities.
Azerbaijan’s diverse investment landscape comes with tax
incentives. Foreign investors can trust that Azerbaijan has robust
laws and regulations to safeguard their rights and interests.
Overall, Azerbaijan has secured a spot in the top seven
countries favorable for investment, according to the International
Monetary Fund’s 2024 report. This indicates that Azerbaijan will
continue efforts to enhance its investment appeal, leading to more
opportunities for investment attraction in the future.