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Asharq Al-Awsat
5 days ago
- Business
- Asharq Al-Awsat
Azerbaijan Proposes Joint Investment Fund with Saudi Arabia to Strengthen Economic Partnership
In a significant step toward deepening economic and strategic ties, Azerbaijan is working to transform its growing partnership with Saudi Arabia into tangible investment initiatives. At the forefront of this effort is a proposal to establish a joint sovereign investment fund that would support priority sectors in both countries and finance joint ventures in third markets. The plan, revealed by Azerbaijani Ambassador to Saudi Arabia Shahin Abdullayev in an interview with Asharq Al-Awsat, reflects Baku's intention to build on the momentum of recent high-level engagements and turn bilateral cooperation into long-term, shared economic value. The proposed fund comes in the wake of the 8th Saudi-Azerbaijani Joint Government Committee meeting held in Riyadh in April, co-chaired by Saudi Investment Minister Khalid Al-Falih and Azerbaijani Deputy Prime Minister Samir Sharifov. The talks resulted in several memorandums of understanding covering energy, transport, logistics, and water, as well as endorsement of recommendations from the 6th Saudi-Azerbaijani Business Council. Abdullayev highlighted the rapid growth in ties between Baku and Riyadh across multiple sectors, especially energy, investment, tourism, and culture. He praised Saudi-based ACWA Power for its role as a leading investor in Azerbaijan's renewable energy sector. In 2024, both countries signed a joint executive program during COP29 in Baku, aimed at strengthening cooperation in renewable energy development and transfer. The agreement was signed in the presence of Saudi Energy Minister Prince Abdulaziz bin Salman and Azerbaijani President Ilham Aliyev. It includes large-scale wind power projects with a combined capacity of 2.5 gigawatts, along with battery-based energy storage systems. The ambassador noted that Azerbaijani Economy Minister Mikayil Jabbarov proposed the creation of a joint sovereign wealth fund during a visit to Riyadh in December 2024. The fund would target priority sectors outlined in both countries' economic agendas and invest in third countries as well. Abdullayev underscored the importance of finalizing an investment protection agreement between the two nations, along with offering incentives to encourage Saudi investors to explore opportunities in Azerbaijan's free economic zones. Areas of cooperation under discussion include oil, renewables, industry, tourism, infrastructure, agriculture, livestock, and mining. Tourism is another bright spot in the growing partnership. More than 100,000 Saudi tourists visited Azerbaijan in 2024, up over 31% from the previous year. The ambassador expects further growth through the development of joint tourism programs, sustainable tourism initiatives, and shared exhibitions and events. On the strategic level, Abdullayev emphasized the importance of Azerbaijan's oil policy, initiated by former President Heydar Aliyev, as a foundation for national development. That strategy has enabled Azerbaijan to invest in key sectors such as infrastructure, education, and healthcare, positioning the country as one of the region's most advanced economies. Azerbaijan also plays a vital regional role in energy security through its major pipeline projects, including the Baku-Tbilisi-Ceyhan oil pipeline and the TANAP and TAP natural gas lines, which serve European markets. The ambassador highlighted Baku's successful bid to host COP29 as a sign of Azerbaijan's growing global presence. The conference resulted in a pledge urging developed nations to allocate $300 billion annually by 2035 to help developing countries mitigate climate change impacts. He also praised Saudi Arabia's humanitarian support, particularly through the King Salman Humanitarian Aid and Relief Center, which signed a demining agreement in January 2024 to assist in clearing liberated areas in Azerbaijan, a step that has helped accelerate reconstruction and enable safe civilian return to their homes.
Asharq Al-Awsat
01-05-2025
- Business
- Asharq Al-Awsat
Azerbaijan's Deputy PM Says Establishing Partnership with Saudi Arabia to Export Green Energy to Europe
Azerbaijan's Deputy Prime Minister, Samir Sharifov, has revealed a strategic partnership with Saudi Arabia to launch joint investments - both inside and outside the two countries - in the field of renewable energy. In an interview with Asharq Al-Awsat, Sharifov said that during COP29, a multilateral strategic partnership was formed between the Kingdom, Azerbaijan, Kazakhstan and Uzbekistan that includes building a cable underneath the Caspian Sea for exporting green energy to European markets. 'Azerbaijan places special attention on the development of solar, wind, and hydropower plants, and we plan to increase the share of renewables in its total electricity capacity to 30% by 2030. We have opened this sector for the foreign investors,' he said. Here is the full text of the interview: Q1: What is the purpose of your visit to Saudi Arabia? What are the most important topics to be discussed? Today we've held the 8th session of the Joint Intergovernmental Commission between the Government of the Republic of Azerbaijan and the Government of the Kingdom of Saudi Arabia. We have discussed various areas of our bilateral cooperation, placing special focus on investment, trade, finance, energy, water resources, agriculture, transport, logistics and tourism. To make the visit as rewarding as it can be, within the framework of the Commission's session, the 6th meeting of the Joint Business Council took place, alongside investment roundtable discussions in the B2G format. The Joint Commission, has been formed in 2000, to give further impetus in realization of our untapped potential. To this day, we have had 7 sessions, and the discussions held and decisions taken within their framework, have advanced our joint efforts in achieving mutually fruitful cooperation. Last year marked 30 years since the Azerbaijani Embassy was opened in Riyadh, and 25 years since the Embassy of Saudi Arabia in Baku. Our bilateral relations are dynamic in nature, and in the span of 30 years, have progressed both within bilateral and multilateral formats. Our cooperation is based on solid foundation established by the leaders of the two countries His Excellency Mr. Ilham Aliyev and the Custodian of the Two Holy Mosques, His Majesty King Salman bin Abdulaziz Al Saud. Q2: Will the visit witness the signing of memoranda of understanding and agreements? What are their nature? Traditionally, at the end of each Joint Commission's session, both sides sign the Protocol that serves as a roadmap. It includes but not limited to areas such as trade, investment, finance, transport, logistics, agriculture, energy, water resources, and tourism. Today's Commissions session is not an exception and we have signed the Protocol, and within the framework of Commission's session framework we have also signed 3 Memorandums of Understandings: on cooperation between small and medium-sized enterprises; on plant protection and quarantine between relevant entities; and on mutual recognition of seafarers' certificates between transport ministries and two MoU's will be signed by private sector companies. Q3: What are the most important areas of cooperation between the two countries? What are the joint projects, their size, and their nature? The cooperation between our countries has a great deal of untapped potential. Take for instance, bilateral trade – regrettably our trade turnover falls short of our expectations, and this calls for need to boost our trade relations. Azerbaijan is interested in attracting investments from Saudi Arabia into its economy. Thanks to the policy (reforms) put forward by H.E. Mr. Ilham Aliyev, the investment climate in Azerbaijan is very positive, foreign investments are duly protected, and it is ranked highly (rated highly) by the World Bank. If before investments have been in the traditional sector of oil and gas, now our focus is diversification away from oil and gas. We are interested in investments in the non-oil sector, infrastructure, transportation infrastructure, and particular, renewables. It is pleasing to state that ACWA Power, has become the largest Saudi Arabian investor in Azerbaijan. They have already invested in the construction of 240 MW wind power plant project. In addition, the seawater desalination project was granted to ACWA Power by the Government of the Republic of Azerbaijan within the public-private partnership (PPP) framework. There are also ongoing discussions between State Oil Company of the Azerbaijan Republic (SOCAR) and ACWA Power for the development of offshore wind projects. Saudi Arabian company FAS in cooperation with SOCAR considers investing in the installation of solar energy systems for gas stations and administrative buildings. SOCAR together with ACWA Power has also been exploring potential joint investments both in Azerbaijan and outside of it. The State Oil Fund of the Republic of Azerbaijan (SOFAZ) together with Saudi Arabia's Hassana Investment Company are discussing the potential investment cooperation, and both parties are currently awaiting the practical implementation of the document signed. Saudi Development Fund has financed infrastructure projects in our country in sectors of water, education, and road with a total amount exceeded USD 100 million. We are interested to cooperate with the Saudi Development Fund to implement other infrastructure projects. We are encouraged with the growing number of tourists between our countries. In 2024, we have witnessed record number of tourists from Saudi Arabia to Azerbaijan. Compared to 2023, it represents almost 25% growth. This positive growth is supported by the increased number of direct flights between Azerbaijan and Saudi Arabia. AZAL and FLYNAS now cover 18 flights a week between Baku, Riyadh, Dammam, Jeddah. In Azerbaijan, we are very excited with the implementation of Saudi Vision 2030, that is spearheaded by the leadership of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince and Prime Minister. This ambitious roadmap focuses on diversifying Saudi Arabia's economy, reducing oil dependence, and creating a vibrant environment for both local and international investors. This corresponds to Azerbaijan's National Priorities 2030, which also aims to diversify our economy. The scale of work within this initiative is really impressing. Large Azerbaijani companies specializing in civil construction and infrastructure are also interested in participating in these promising activities both as investors and contractors. There are number of Azerbaijani companies with a proven track record of implementation of construction projects in the countries of Central Asia, South Caucasus, Eastern and Central Europe. Both sides are also discussing the implementation of joint projects in priority agricultural fields, as well as collaboration on improving local horse breeds through the use of Arabian horses (stallions). Q4: How do you view the importance of cooperation between the two countries in environmental and climate technology? In November, 2024, our country hosted the 29th session of the Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, and using this opportunity I would like to thank the Government of the Kingdom of Saudi Arabia, for their participation as well as for joining the "Joint Solemn Appeal on COP Truce" initiative. Multilateral cooperation plays a pivotal role in fostering global climate action. In this context, both sides need to explore avenues for further cooperation to advance the progress achieved at COP29. During COP29, a multilateral strategic partnership was formed between Saudi Arabia, Azerbaijan, Kazakhstan and Uzbekistan within which it is planned to build a cable underneath the Caspian Sea for exporting green energy to European markets. The Government of Republic of Azerbaijan places special attention on the development of solar, wind, and hydropower plants, and we plan to increase the share of renewables in its total electricity capacity to 30% by 2030. We have opened this sector for the foreign investors, and we are pleased to see that our efforts have been awarded. Azerbaijan as well as Saudi Arabia is traditionally rich in oil and gas. Azerbaijan believes that oil and gas are a very important source of energy and will maintain its importance for many years to come. Through smooth energy transition we aim to diversify our existing energy system and are committed to developing our renewable energy potential. Q5: What are the latest developments regarding the dialogue with Armenia? What are the most prominent outstanding issues? In 2020, under the leadership of H.E. Ilham Aliyev, armed forces of the Republic of Azerbaijan, have put an end to almost 30-year-long occupation of its territories by neighboring Armenia. By gaining glorious victory, we liberated our territories, restored our territorial integrity, and reinstated our sovereignty over all internationally recognized territories of Azerbaijan. In Azerbaijan, we remember and highly value that during almost 30 years of occupation, the Kingdom of Saudi Arabia was keeping a principal position not to establish diplomatic relations with the aggressor (Republic of Armenia). We thank Saudi Arabia for holding the strong position in this matter. Since the beginning of 2021, we have been realizing the so-called program of the Great Return that is aimed at returning almost half a million of Azerbaijanis back to their cities and villages, which they had to flee in the wake of Armenian aggression. Unfortunately, these towns and cities were fully destroyed, looted and moreover huge number of mines were planted on the occupied territories. In 2022, the Saudi Arabian delegation, led by H.E. Minister of Investment Khalid Al-Falih, visited Karabakh and East Zangazur, and have personally witnessed the scale of destruction. We have assessed that damage and destruction caused by the Armenian aggression of Azerbaijan, equal to USD150 billion. After 30 years of Armenian aggression, Azerbaijan liberated its territories and started reconstruction. This also includes demining efforts as well as physical and social infrastructure, as well as housing for those who were forcibly displaced. This requires substantial amount of financial resources. Severe contamination of territories with landmines severely hinders the process of reconstruction. Even today, we witness casualties and human loss, because of mines planted by the aggressor a long time ago. We must redirect substantial financial and human resources, to address demining activities. In this regard, I would like to express our appreciation, to King Salman Humanitarian Aid and Relief Center of the Kingdom of Saudi Arabia for their financial support in demining activities in Azerbaijan in 2024. Azerbaijan is interested in establishing peace and cooperation in the region. It offered a post war normalization agenda to Armenia built on the principles of equal and reciprocal respect for legitimate interests of both sides through mutual recognition of and respect for each other's sovereignty, territorial integrity and inviolability of borders, border delimitation, and the opening of regional communications, with the ultimate goal of signing a bilateral peace treaty. Q6: How is Azerbaijan dealing with the tariffs imposed by US President Donald Trump? Azerbaijan is among the countries affected by the recent import tariff decisions imposed by the US administration. The negative impact of these tariffs, on our country is not very substantial, given relatively the modest trade turnover of Azerbaijan with US. Q7: To what extent does the US move to impose tariffs reinforce the idea of launching a free trade zone to mitigate their effects? Way before the US tariffs, Azerbaijan has identified the strengthening of trade and economic relations as one of its main priorities. Nonetheless, we also believe that each country is free to decide on how it wants to trade. We also believe that tariffs are temporary in their nature. In general, Azerbaijan supports a liberal trade environment – the less obstacles for trade the better. Within this context, Azerbaijan for many years has Free Trade Agreements with 10 countries and Preferential Trade Agreements with 2 countries. To support trade and investments, we have created a number of free economic and Special economic zones as well as Free trade zones in various regions of Azerbaijan. Alat Free Economic Zone is located at the shores of the Caspian Sea and the largest undertaking of its kind in Azerbaijan.
Arab News
29-04-2025
- Business
- Arab News
Saudi Arabia, Azerbaijan sign SME deal to strengthen trade ties
RIYADH: Saudi Arabia and Azerbaijan have signed a comprehensive agreement focused on strengthening economic collaboration through the development of small and medium-sized enterprises, in a move that underscores both nations' commitment to enhancing bilateral trade and investment. The memorandum of understanding was formalized during the 8th session of the Saudi-Azerbaijani Joint Committee, held in Riyadh. It was signed between Saudi Arabia's Small and Medium Enterprises General Authority, known as Monsha'at, and Azerbaijan's Small and Medium Business Development Agency, known as KOBIA. The SME agreement aligns with Saudi Arabia's Vision 2030 strategy, which prioritizes economic diversification and entrepreneurship. For Azerbaijan, it marks another step in forging strategic partnerships in the Gulf region to bolster private-sector growth and create new market opportunities for innovative enterprises. In a statement posted on X, Monsha'at said: 'In the presence of H.E Minister of Investment, Eng. Khalid bin Abdulaziz Al-Falih, and the Deputy Prime Minister of the Republic of Azerbaijan, Samir Sharifov, Monsha'at, signed a MoU with 'KOBİA' Agency, as part of the 8th session of the Saudi-Azerbaijani Joint Committee activities, to strengthen cooperation in supporting the SMEs and entrepreneurship's growth between the two countries.' The agreement encompasses a broad range of initiatives, including knowledge exchange, joint training programs, and support for technical innovation. It also promotes investment opportunities, cross-border partnerships, and institutional collaboration through exhibitions and shared platforms. Saudi Arabia and Azerbaijan come together at the 8th Session of the Joint Commission between the two nations to unlock new investment opportunities, strengthen economic ties, and drive future collaboration across key sectors. — INVEST SAUDI (@InvestSaudi) April 29, 2025 In a separate announcement, the Saudi Ministry of Investment revealed the signing of two additional memorandums of understanding between private-sector companies from both countries. 'These agreements cover the development of maritime infrastructure and the establishment of industrial and medical facilities in the Kingdom, including the production of biotechnology and oncology medicines, the establishment of research and development centers, and infrastructure for re-export warehouses,' the Ministry noted in a post on X. The joint committee also reviewed a series of potential joint ventures aimed at strengthening cooperation across mutually beneficial sectors. These initiatives are closely aligned with both countries' long-term goals for economic diversification. Officials from Saudi Arabia and Azerbaijan emphasized the importance of fostering dynamic SME ecosystems as engines of job creation, innovation, and global competitiveness. By aligning policy frameworks and enabling institutional collaboration, the two nations aim to unlock greater private-sector engagement and regional trade expansion.
