AGP Executive Report

Energy and Industry: Azerbaijani households and businesses can sell surplus power to Azerishiq under the active-consumer scheme, which allows generation of up to 150 kilowatts. Nearly 1,800 consumers are already participating. The non-oil industry grew 1.5-fold from 2021 to 2025, while renewable-energy agreements cover more than 8 gigawatts of capacity. Public Finances: Public debt reached $14.06 billion on October 1, equal to 17.3% of projected GDP, as foreign liabilities declined. Azeri Light crude slipped 4% to $122.49 a barrel. Business Funding: The Asian Development Bank and Bank Respublika agreed on $40 million in financing to support businesses, farmers and women entrepreneurs. Trade and Transport: Azerbaijan and India are seeking to expand trade and energy investment, building on bilateral trade of about $600 million. Baku also discussed Middle Corridor investment with Dutch logistics group C. Steinweg. Regional Cooperation: OTS leaders are meeting in Ankara, with trade, transport, energy and digital links on the agenda.

Export Push: Azerbaijan aims to raise non-oil and gas exports to 30% of total exports, offering eligible exporters transport subsidies of up to 70% and customs-duty compensation for small businesses. The Entrepreneurship Development Fund allocated about AZN 246 million in concessional loans to more than 4,000 projects in the first nine months. Rail & Innovation: Azerbaijan Railways signed a deal to buy four passenger trains, supporting plans to restore routes to Yalama, Minjivan and Astara by 2030. The Economy Ministry and Spain’s IE University will also establish an AI Observatory focused on productivity and competitiveness. Energy: At the GECF summit, Azerbaijan said it now supplies gas to 16 countries and has exported 131 billion cubic metres to Türkiye, more than 66 billion to Europe and 37 billion to Georgia. The forum’s declaration called for fair gas pricing and stronger protection of supply chains and infrastructure. Investment & Finance: The Asian Development Bank and Bank Respublika signed a $40 million deal to support businesses, farmers and women entrepreneurs. Fitch Solutions expects Azerbaijan’s key interest rate to fall from 6.5% to 6% by year-end, while overdue loans have risen 42.8% year-on-year.

Investment & Trade: Azerbaijan is looking to turn its upcoming 2027 OIC presidency into an economic network for investment and stronger business ties among member states. Baku also discussed Middle Corridor logistics and infrastructure investment with Dutch firm C. Steinweg, while Azerbaijan and Indonesia explored projects in energy, processing and infrastructure. Business Growth: ADB and Bank Respublika signed a $40 million deal to finance small businesses and agriculture, with at least half the funding earmarked for agricultural borrowers and 20% for women-owned firms. A German-Azerbaijani business conference in Baku is showcasing technology for food processing, packaging and industrial automation. Energy: Algeria invited Azerbaijani oil and gas companies to bid on seven exploration blocks, and Baku discussed renewable energy and battery-storage cooperation with Chinese companies. Azeri Light rose to $127.60 a barrel, well above the $65 price assumed in this year’s state budget. Monetary Policy: The Central Bank of Azerbaijan will announce its next interest-rate decision on October 29; its benchmark rate currently stands at 6.5%.

Trade & Logistics: Azerbaijan’s ferries carried 32,380 vehicles in January–September, up 12% year on year, as Baku and The Hague adopted a 2026–28 roadmap to expand trade, investment and cooperation in transport, energy and water management. Infrastructure: The Asian Development Bank is considering up to $140 million for a $407 million Caspian desalination plant, a public-private project designed to supply Baku and the Absheron Peninsula. Monetary Policy: The Central Bank announces its rate decision on October 29; inflation is 5.5%, within its 2%–6% target, while the refinancing rate stands at 6.5%. Investment: An Oman-led fund aims to raise $500 million for private equity investments across Central Asia and the Caucasus, with Azerbaijan among its target markets and logistics, renewable energy, mining and agriculture among its priority sectors.

UK Investment: Azerbaijan and the UK discussed a strategic economic partnership, with talks spanning investment, industry, energy, trade and financial services. Green Energy: The European Investment Bank backs the Caspian–Black Sea–Europe corridor but wants participating countries to clarify how costs, benefits and risks will be shared before financing decisions. Infrastructure: The Asian Development Bank is considering $70 million for Azerbaijan’s first large-scale seawater desalination plant, designed to supply up to 300,000 cubic metres daily under a 25-year public-private partnership. Business Finance: Bank Respublika secured $40 million from the ADB to support regional entrepreneurship. Trade Ties: Azerbaijan and India are looking to deepen energy and business links, building on bilateral trade of about $600 million. Sovereign Wealth: SOFAZ reported a 3.4-fold rise in 2025 net profit to $15.8 billion.

Local Enterprise: Baku’s Olive Festival wrapped up with local producers showcasing products, part of efforts to build a national brand for the sector. India Trade Reset: Talks in Baku focused on expanding trade, investment, energy and transport links; bilateral trade is about $600 million, with both sides seeking to grow it. Sovereign Wealth: SOFAZ reported 26.9 billion manat ($15.8 billion) in 2025 net profit, 3.4 times its 2024 result, with gold investments the largest income driver. Energy Exports: Petroleum-product export revenues doubled year-on-year in the first eight months of 2026, reflecting Azerbaijan’s push to sell more processed products. Trade and Infrastructure: Azerbaijan’s trade with the EU topped $15 billion in the first nine months, while a feasibility study for the €22 billion Caspian–Black Sea–Europe green energy corridor has been completed.

India ties: Foreign Minister S. Jaishankar’s Baku visit opened a push to expand trade, investment, energy and transport links. The two sides also agreed to bring business representatives together; bilateral trade is about $600 million. Energy exports: Azerbaijan is seeking to earn more from processing hydrocarbons into higher-value products. Petroleum-product export revenue doubled year on year in the first eight months of 2026. Trade: Foreign trade reached $37.2 billion in January–September, up 5.2%. Exports rose 28.3% to $23.9 billion, while imports fell 20.4% to $13.3 billion. Green power: The proposed Caspian–Black Sea–Europe corridor has an estimated €22.1 billion price tag, including €14.3 billion for transmission infrastructure. Its feasibility study is approved, with the first line targeted to start operating in 2032. Investment: Oman is assembling a $500 million fund for Central Asia and the Caucasus, targeting sectors including logistics, renewable energy, mining and agriculture.

Trade and Markets: Azerbaijan’s foreign trade reached $37.2 billion in January–September, up 5.2% year on year. Exports rose 28.3% to $23.9 billion while imports fell 20.4% to $13.3 billion. Fertiliser imports increased 7.3%, while cocoa imports edged up 0.8%. Business Activity: Food-service turnover grew 8% to AZN 2.31 billion. Azerbaijan’s ambassador also discussed trade and investment opportunities with businesses in Ukraine’s Zakarpattia region. India Ties: During External Affairs Minister S. Jaishankar’s Baku visit, Azerbaijan and India discussed expanding trade, energy and transport links and bringing business representatives together. Bilateral trade stands at about $600 million. Energy Infrastructure: Azerbaijan, Georgia, Romania and Hungary approved the feasibility study for a €22 billion green-energy corridor. The project is moving into development, with its first transmission line targeted for 2032. Investment: Oman is leading a planned $500 million fund for Central Asia and the Caucasus, targeting sectors including logistics, renewable energy, mining and agriculture.

India Ties: Baku and New Delhi agreed to bring business representatives together and explore stronger trade, energy and transport links after talks between their foreign ministers. Bilateral trade reached about $600 million in the first half of 2026, with Indian firms interested in Azerbaijan’s oil and gas sector and both sides discussing the North-South corridor and direct flights. Trade: Azerbaijan’s exports of sugar and confectionery rose 2.4-fold to $114.8 million in January–September, while pharmaceutical imports slipped 1.7% to $382.4 million. Overall trade turnover reached $37.2 billion, up 5.2% year on year. Agriculture: Parliament has approved in first reading a draft law to consolidate sector rules and support food security, rural development and climate adaptation. Energy and Connectivity: European gas futures topped $1,050 per 1,000 cubic metres for the first time since December 2022, highlighting the value of Azerbaijan’s gas supplies and transport links.

India Trade Reset: Baku and New Delhi agreed to bring business communities together and expand trade, investment, energy and transport links during Indian Foreign Minister S. Jaishankar’s visit. Bilateral trade reached about $600 million in the first half of 2026, while more than 1,000 Indian companies operate in Azerbaijan. Digital Connectivity: Azerbaijan and Kazakhstan launched the first fiber-optic cable across the Caspian, a 380-kilometre link with capacity above 400 terabits per second, strengthening the region’s Europe–Asia digital corridor. Public Finances: Azerbaijan expects 872 million manats in state-company dividends in its updated 2027 budget and plans to forecast 60% of the state budget electronically. Energy and Trade: Azeri Light crude rose to $121.95 a barrel, while Azerbaijan’s trade with the EU topped $15 billion in the first nine months of 2026. Agriculture: Parliament approved the first reading of a draft law consolidating rules for the sector, with aims including food security, rural development and climate adaptation.

Energy: Azeri Light climbed to $121.95 a barrel, nearly twice the $65 oil-price benchmark used in this year’s budget. Azerbaijan also proposed routing Turkmen electricity to Europe via a Caspian link, strengthening its bid to become a regional green-energy hub. 2027 Budget: The revised draft projects 39.254 billion manats in state revenue and 42.4 billion in spending, with the deficit capped at 3.146 billion. Expected dividends from state-owned companies rose by 17 million manats to 872 million. Trade & Connectivity: Azerbaijan and India discussed trade, investment, energy and transport links, including the North–South corridor, Baku–Tbilisi–Kars railway and Alat Free Economic Zone. Azerbaijan and Italy are also targeting €10 billion in bilateral trade and exploring joint energy and technology projects. Economic Outlook: The IMF expects subdued growth but a stronger external position. Azerbaijan’s trade with the EU topped $15 billion in the first nine months of 2026. Digital Finance: The government is advancing a unified digital public-finance system, while more state contracts and tax services move online.

Public Finance: Azerbaijan is accelerating digital reforms, with state contracts worth more than AZN3 billion digitized and AI tools planned for budgeting and tax-risk detection. Electronic procurement has saved AZN454 million, officials say. Economic Outlook: The IMF expects subdued growth but a stronger external position in 2026. Trade with the EU topped $15 billion in the first nine months of the year. Green Energy: A feasibility study for the Caspian–Black Sea–Europe power corridor is complete, with a final investment decision targeted for 2029; the cable will require billions in funding. Azerbaijan is also considering 300 MW of green projects with a Chinese company. Investment: European companies describe the business climate as satisfactory and plan to expand, while investment interest in Karabakh and Nakhchivan is rising. Azerbaijan and Italy are pursuing cooperation in critical minerals, industry and technology. Finance and Oil: The Central Bank has sent Islamic finance legislation to the government after testing the model at two banks. Azeri Light prices have climbed close to $120 a barrel.

Energy and Outlook: Azeri Light rose to $118.53 a barrel, far above the $65 budget benchmark. The IMF expects Azerbaijan’s external position to strengthen in 2026, but forecasts growth of 1.7% and says fiscal consolidation will continue. Green Investment: Baku hosted talks to advance the Caspian–Black Sea–Europe Green Energy Corridor after its feasibility study, with financing and commercial plans now in focus ahead of a 2029 investment decision. Azerbaijan also approved a long-term low-carbon strategy, targeting net zero by 2060 if additional funding is secured. EU Business: Trade with the EU reached $15.12 billion in the first nine months, up 1%. A business survey found 52% of European companies plan to expand in Azerbaijan; 19% have invested in Karabakh, East Zangezur or Nakhchivan. Digital Finance: Electronic public procurement saved AZN 453.7 million in January–August. Authorities also plan to launch pre-filled tax declarations for entrepreneurs and automate accounting of state purchases. Trade Facilitation: Joining the Common Transit Convention could let Azerbaijani businesses move goods across its 41-country area using one declaration and guarantee.

Regional Connectivity: EBRD says the Middle Corridor must grow beyond a transport route into an economic corridor that creates jobs and business opportunities. The EIB is assessing investment in the Nakhchivan railway and other regional energy and digital links. Trade: Azerbaijan exported $23.45 million in goods to Armenia in January–September, while imports from Armenia were just $96,460. Trade and transport links with Georgia were also discussed as Azerbaijani investment there reaches $3.6 billion across more than 5,500 companies. Energy: Offshore construction has begun on the $2.9 billion Shah Deniz Compression project, expected to deliver an additional 50 billion cubic metres of gas over its lifetime and start production in 2029. Investment and Finance: The EBRD’s loan portfolio in Azerbaijan stands at €879 million, while the Black Sea Trade and Development Bank has financed more than €700 million in projects. AzerGold has established its first foreign subsidiary, in Uzbekistan, as Azerbaijan expands its regional business ties.

Middle Corridor: Transit cargo through Azerbaijan hit a five-year high of more than 12 million tonnes in January–September, up 14.5% year on year. At the EU-Azerbaijan Business Forum in Baku, business leaders said reliable, competitive conditions are as vital as new infrastructure. Investment: The EIB is assessing projects including the Nakhchivan railway and Caspian–Black Sea green energy links. The EBRD’s Azerbaijan loan portfolio reached €879 million, with 89% directed to sustainable infrastructure. Trade: Georgia’s exports to Azerbaijan rose 6.9% to $566.7 million in the first nine months, making Azerbaijan Georgia’s third-largest export market. Energy and public finances: SOFAZ revenue from the ACG and Shah Deniz fields increased 3.7% to AZN 7.14 billion. Separately, Azerbaijan reported a $10.5 billion trade surplus and an 11.5% rise in oil and gas revenues to $5.14 billion for the first nine months. Green energy: An EU report highlights progress in renewables, while a proposed corridor could deliver 20 billion kWh annually to Europe by 2040.

Investment & Technology: Azerbaijan’s State Oil Fund portfolio reached $74 billion at September’s end, up 5.5% year on year. Baku also discussed financing AI data centers and digital infrastructure with the U.S. DFC. Trade Routes: Azerbaijan, Kazakhstan and China are coordinating to strengthen the Middle Corridor, while Japanese companies have tested the route and Tokyo is funding customs upgrades at Kazakhstan’s Aktau port. Energy: Azerbaijan’s oil and gas revenues rose 11.5% to $5.14 billion in nine months; the government also reported a 30.8% annual jump in oil and gas investment. A planned green energy corridor could deliver 20 billion kWh a year to Europe by 2040. Business Ties: Hungarian companies have invested about $2 billion in Azerbaijan, with cooperation spanning energy, agriculture, pharmaceuticals and water management.