Pakistan nears $2 billion investment deal with Azerbaijan

Pakistan is close to finalising a $2 billion investment agreement with Azerbaijan, Prime Minister Shehbaz Sharif said on January 30, as the country seeks to attract foreign capital into key sectors amid economic and energy challenges.

Sharif made the remarks during a meeting with Khalaf Khalafov, Azerbaijan’s presidential representative on special assignments, at the Prime Minister’s Office, Caliber.Az reports via foreign media.

The discussions come as Pakistan looks to secure large-scale foreign investment to bolster its economy and strengthen energy security, with Azerbaijan emerging as a key partner.

“Welcoming the Azerbaijani dignitary, the Prime Minister recalled the warm fraternal bonds between Pakistan and Azerbaijan and reaffirmed Pakistan’s resolve to further strengthen bilateral relations with Azerbaijan, in all areas of mutual interest,” the statement said.

“While noting that both sides were close to finalizing the agreement for USD 2 billion investment by Azerbaijan in Pakistan, the Prime Minister reiterated his invitation to President Aliyev to undertake an official visit to Pakistan at his earliest convenience,” it added.

Earlier this month, Pakistan’s finance ministry reported that Azerbaijan’s state energy company SOCAR was preparing to finalise an investment in the country’s oil and gas sector following high-level engagements at the World Economic Forum in Davos. The move is part of Islamabad’s strategy to stabilise energy supply, reduce costs, and improve contractual transparency.

SOCAR already operates in Pakistan through SOCAR Trading, supplying up to one LNG cargo per month without take-or-pay obligations, giving Pakistan greater flexibility in managing demand and pricing.

Regional issues were also discussed during the January 30 meeting. Khalafov thanked Pakistan for its diplomatic support during the 2020 Karabakh conflict — a brief but intense war between Azerbaijan and Armenia that ended with Baku regaining control over significant parts of the disputed territory — and reaffirmed Azerbaijan’s longstanding support for Pakistan’s position on Kashmir.

Pakistan and Azerbaijan have steadily expanded economic and strategic ties in recent years, including cooperation in defence and security.