Azerbaijan

Azerbaijan is a major hydrocarbon exporter and must succeed in diversifying its economy. This shift will involve development of transport, the private sector, clean energy, and sustainable tourism, among others. AFD has been present in Azerbaijan since 2012 and operates through sovereign and non-sovereign loans. It is mainly active in the rail sector. Its objective is to support projects that contribute to the fight against climate change and work towards fair and inclusive transitions.

Context

At the crossroad of Central Asia and Middle East, Azerbaijan is the biggest and most populated of the three South Caucasus countries. Thanks to its hydrocarbons, the country experienced strong growth during the 2000s. Poverty and inequality decreased, but significant regional gaps remain, all the more so because the fall in hydrocarbon prices is penalizing the country economically.

AFD has been providing support to Azerbaijan since 2012, within the framework of a "green and inclusive growth" mandate. AFD's intervention includes loans to the Government as well as to enterprises and local authorities. It additionally mobilizes European grants as part of the Neighbourhood Investment Facility - East.

Currently, AFD's objective is to help Azerbaijan prepare for the post-petroleum era, and thus to diversify its economy. Modernization of its transport is just a first step.

AFD's work in Azerbaijan is directly attached to the Eurasia regional office in Istanbul.

Our approach

"AFD and Azerbaijan: taking up the post-petroleum challenge"

Azerbaijan has a little over 2000 km of railways. The railway infrastructure and the rolling stock are currently in dilapidated condition which has a negative impact on personnel and passengers’ safety as well as on the energy performance and competitiveness of the sector. AFD supports the ambitious reform program that has been launched in 2008 by the government for the development and the modernization of its railways.

Development of the East-West corridor: Since 2015, AFD has been supporting the renovation of the Azerbaijani section of the Azerbaijan-Georgia-Turkey railway line. The project will allow the construction of two maintenance workshops and the training of machinists and locomotive drivers. It also contributes to the technical capacity building of railway personnel and to the maintenance of new locomotives.
Renovation of North-South line: In partnership with the Asian Development Bank, AFD has been supporting since 2018 the renewal of Sumqayit-Yalama rail line. The work will upgrade 166.5 km of double -line rail track in order to ensure the rapid and safe movement of goods and passengers.
Financial restructuring of the national railway company ADY: AFD supports the company’s institutional and operational reforms. The aim: To make ADY an efficient and economically viable company within a clear regulatory framework for railway traffic.

In line with its regional strategy for Eurasia, AFD aims to support urban resilience and adaptation projects in the country through the financing of urban infrastructures (transport, water and sanitation, waste management, pollution control etc.), sustainable land management and natural resource preservation (irrigation, forest, etc.), support for the energy transition (renewable energies, energy efficiency and energy sector reform) and connectivity.

In this respect, it is working on the identification of other projects in the energy sector and water resource management sector in Armenia.

In the field

Below, find the country's projects, news, publications, and contact details in one click.

News & Press Releases

Armenia: Generating Clean Energy and Efficient Agriculture

Farmers, residents and businesses are developing rural initiatives in Armenia, with the support of AFD Group. They’re working to develop rural areas via one project targeting housing, and another that...