Digital, green, inclusive: Future of Azerbaijan’s economy with World Bank

The Board of Directors of the World Bank Group (WBG) has discussed a new Country Partnership Framework (CPF) with Azerbaijan, outlining the institution’s strategic engagement with the country for the next five years.

The framework aims to support Azerbaijan’s transition toward a more competitive, green, and inclusive economy while addressing key development challenges, Caliber.Az reports referring to local media.

The programme is structured around two priority outcomes:

1. Boosting productivity and creating quality jobs.
2. Enhancing sustainability and environmental security.

Under this new strategic framework, the World Bank will provide support in several key areas:

• Business Environment and Job Creation: The CPF will focus on improving conditions for micro, small, and medium-sized enterprises (MSMEs), facilitating access to finance, especially green and sustainable finance, and supporting entrepreneurship among women and vulnerable groups.
• Transport and Digital Connectivity: Investments will be directed toward upgrading the Middle Corridor for trade and transit, enhancing digital infrastructure, and deploying cutting-edge technologies, including artificial intelligence.
• Transition to Renewable Energy: The programme will emphasize strengthening Azerbaijan’s energy infrastructure, attracting private investment in green energy, developing energy storage solutions, and establishing green energy corridors.
• Climate Change Adaptation: The CPF prioritizes sustainable urban development, the adoption of green building standards, the expansion of climate-smart agricultural practices, improvements in water efficiency, and greater private sector involvement in water resource management.

Stephanie Stallmeister, World Bank Country Director for Azerbaijan, stated:

“This programme reflects our commitment to support Azerbaijan's transformational journey towards a more sustainable and prosperous future. We are confident that our partnership will help the country unlock its economic potential.”

The implementation of the CPF will involve a coordinated effort between the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). This collaboration will blend investment and advisory support, while also engaging international partners and the private sector to maximize the impact of development initiatives.

Ivana Fernandez Duarte, IFC’s Regional Manager for the South Caucasus, emphasized the importance of private sector involvement, stating:

“IFC is committed to Azerbaijan's sustainable development by mobilizing private investment to modernize infrastructure, improve energy availability, and develop key sectors such as green finance, agriculture, water, transport, and digital connectivity. These measures aim to stimulate growth, create jobs, and make the economy more resilient.”

The CPF is fully aligned with Azerbaijan’s Socio-Economic Development Strategy 2022-2026 and the World Bank’s Evolution Roadmap, both of which emphasize addressing global challenges such as climate change, economic inequality, and market vulnerabilities.

Azerbaijan became a member of the World Bank in 1992, and since then, the institution has supported the country through more than 50 investment projects focused on economic diversification, infrastructure development, public administration reforms, and social improvements. Alongside financial support, Azerbaijan has also received advisory and technical assistance to implement reforms in key sectors.

The country joined the International Finance Corporation (IFC) in 1995, and since then, the IFC has invested approximately $900 million in nearly 60 projects. These investments have targeted financial services, infrastructure, and industry, while also contributing to improvements in the business environment, financial sector development, corporate governance, support for small and medium-sized enterprises (SMEs), and agribusiness.

By Tamilla Hasanova