Unlocking investment potential: Baku gears up for economic boom Review by Caliber.Az

Possessing significant energy potential and a favourable geographical location at the crossroads of Europe and Asia, Azerbaijan has for about three decades held a leading position in the region in attracting foreign direct investment (FDI). 

In order to maintain its investment attractiveness in the realities of the 21st century, the country is implementing industrialisation based on industrial clusters and special economic zones (SEZs), developing green energy and components of the digital economy. 

New vectors for attracting capital are being formed in the country: efforts on the investment track were discussed recently in Baku during a panel discussion on the topic “Future careers: How to stay relevant, ready, and in demand," with the participation of the Export and Investment Promotion Agency (AZPROMO).

For many years, the fundamental factors underpinning Azerbaijan’s investment appeal have been its substantial energy and logistics potential, combined with the stability of macroeconomic indicators, a surplus in the balance of payments and trade, the resilience of monetary and credit parameters, and a high level of gold and foreign exchange reserves. Today, significant efforts are also being made to attract foreign investors to industrial zones, industrial districts, and special economic zones (SEZs), as well as to open the domestic market to investments from global vendors and foreign payment system participants in the country's IT sector and financial system.

A crucial step toward enhancing the attractiveness of the country's investment environment will be the imminent adoption of the Foreign Direct Investment Promotion Strategy, which is currently being developed by experts from the Ministry of Economy. 

The long-term goals of the strategy include improving the investment climate and increasing the efficiency and return on investments through the modernisation of investment mechanisms and instruments. There are also plans to increase the share of portfolio investors to boost FDI inflows, primarily into the non-oil sector of the economy, with a focus on implementing efficient, high-tech, export-oriented projects with high added value.

The tangible results of efforts made in recent years to increase the capitalisation of the country’s economy are already being felt today. According to recent data from the State Statistics Committee, in January–July 2025, the volume of investments in fixed capital in Azerbaijan reached nearly 9.912 billion manats ($5.8 billion), which is 3.4% higher than in the same seven-month period of the previous year. 

Notably, investment growth in the non-oil sector during the reporting period reached 15%. Specifically, about 5.046 billion manats ($2.9 billion), or 50.9%, were directed to the production sector; over 3.335 billion manats($1.9 billion) (33.7%) went into the services sector; and more than 1.530 billion manats ($899.9 million) (15.4%) were invested in residential construction.

Overall, the government's efforts to improve the business climate and the tangible achievements that have enhanced the country's investment standing have been repeatedly confirmed in reports by international rating and donor organisations.

For instance, over the past fifteen years, Azerbaijan has twice held leading positions in the Doing Business reports of 2009 and 2019 in terms of improving the business environment and promoting investment opportunities. Moreover, in the Doing Business 2020 report, it was named one of the world’s top 20 reforming countries.

Azerbaijan has been recognised as a rising destination for foreign direct investment (FDI) in recent global rankings. According to the FDI Standouts Watchlist—based on data from the International Monetary Fund (IMF) and tracking by fDi Markets—Azerbaijan ranked 7th among the world’s top 10 countries with the highest potential for attracting FDI in 2023–2024. Similarly, FDI Intelligence, part of the Financial Times group, included Azerbaijan in its August ranking of the top 10 most promising countries for investment, also placing it in 7th position.

Azerbaijan is making solid progress in creating a favourable environment for investment in both the innovation and green sectors. This has been recognised through positive evaluations by the World Economic Forum (WEF) and experts from the International Monetary Fund (IMF). The country has also received high marks under the IDEA initiative (Investing in the Digital Economy of Azerbaijan) for its efforts to build a supportive ecosystem for startups and innovation.

Effective steps are being taken to attract foreign direct investment (FDI) into Azerbaijan’s renewable energy sector. Notably, by the end of 2027, renewables are expected to account for 33% of the country’s total energy generation. Most importantly, the lion’s share of green energy projects in Azerbaijan are being implemented with foreign investment, which is projected to reach around $2.8 billion within the next couple of years.

“Azerbaijan is reaching a new level in attracting investment — ongoing developments in the areas of business, exports, and investment are putting the country in a strong position to attract new companies and investors,” said Yusif Abdullayev, Executive Director of AZPROMO, during a panel discussion held in Baku titled “Future careers: How to stay relevant, prepared, and in demand.”

The agency’s director emphasised that China is now a key strategic partner for Azerbaijan, especially when it comes to attracting investments. Additionally, logistics is creating new opportunities in the English-speaking world, partly thanks to the implementation of the "Trump Route for International Peace and Prosperity" (TRIPP) project.

“We are observing growing interest from Europe and the United States, which could become important partners for Azerbaijan in the future,” Abdullaev said, emphasising the significance of the agreements signed in early August in Washington between Azerbaijan and Armenia, facilitated by US President Donald Trump.

“When it comes to taking Azerbaijan to a new level, especially in the areas I represent—business, export, and investment—the ongoing developments have put us in a very advantageous position for attracting new companies and investors,” Abdullaev emphasised, noting that the liberated territories also open up huge opportunities for the development of logistics, international relations, and capital attraction.

At the same time, the head of AZPROMO highlighted a shortage of specialists in investment promotion: “This is a very interesting but emotionally demanding job—you need to be able to convince partners to come to Azerbaijan, start cooperation here, and also support investors’ activities in the country.” 

According to him, in this context, soft skills, foreign language proficiency, and the development of logistics expertise are in high demand.

The listed skills will be in demand over a long term, especially considering the organisation of the first International Investment Forum in Azerbaijan on September 22-23. 

“We decided to hold the investment forum immediately after the Azerbaijan Formula 1 Grand Prix. This event will be organised jointly with our Italian partner, The European House – Ambrosetti, supported by Euronews, and will feature invited guests from Bloomberg,” Abdullaev added.