Yusif Abdullayev spoke about Azerbaijan’s plans to double its non-fossil fuel exports by 2030. With an annual GDP already over US$70 billion, this country of 10 million people has huge potential. Foreign investment is still concentrated in the oil industry, although in 2023 nearly $20 billion was in other sectors.
He pointed to Azerbaijan’s crucial geographical advantage, “strategically placed as an essential hub”. The Trans-Caspian or Middle Corridor is developing fast as the shortest, safest and sanctions-free route between Europe and Asia.
It’s sometimes romantically referred to as the new Silk Road but Mr Abdullayev could point to modern achievements, notably the Iron Silkway, the 826-kilometre-long railway linking the port in Baku with Tblisi in Georgia and Kars in Türkiye. Azerbaijan has been second only to China in its investments in the Belt and Road Initiative.
It has the largest fleet -54 ships- on the Caspian Sea and the capacity to construct more at the shipyard in Baku. At the EIAS event, Sarah Rinaldi, from the European Commission’s Directorate-General for International Partnership, stressed its support for concrete action to further improve transit times through the ‘island of stability’ in Central Asia.
Azerbaijan is an important energy partner for the European Union, not just as a reliable supplier of oil and gas but as a contributor to the move to green energy. Yusif Abdullayev spoke of the agreement between Azerbaijan, Georgia, Romania and Hungary to create a Black Sea Green Corridor for the export of electricity.
Solar, wind and hydro-electric capacity is already over 16% of Azerbaijan’s power generation capacity, at 1,312 megawatts. The investment opportunities and incentives are particularly great in Karabakh and the other liberated territories, where developing green energy is an important part of the reconstruction of the region.
In Karabakh, the government is itself investing $7 billion but foreign investment is welcome in all places and in all sectors, from the well-established chemical industry agricultural sector to the huge scope for expansion in tourism. The agency that Yusif Abdullayev runs acts as a ‘single window’ for foreign investors, with AZPROMO providing the services of both a trade promotion organisation and an investment promotion agency.
Azerbaijan is in the process of negotiating its World Trade Organisation membership but it is already becoming synonymous with world trade. Cargo trains from China arriving across the Caspian Sea have gone from one a week to 17 a day.
A peace treaty with Armenia should be concluded soon. That should see more trade routes open up and further a growth in prosperity, also spreading to Azerbaijan’s neighbour as the South Caucasus enters an era of cooperation and connectivity.
Nick Powell
