Strategy will guide EBRD investment and policy over next five years
By Rezo Bitsadze
The Board of Directors of the European Bank for Reconstruction and Development (EBRD) has approved a new country strategy for Azerbaijan, guiding its investment and policy initiatives over the next five years.
The EBRD’s two key priorities for Azerbaijan are: (i) fostering greater economic diversification through a stronger, more competitive, and inclusive private sector and improved governance; and (ii) accelerating the transition to a green economy and improving regional connectivity.
Under the first priority, the EBRD aims to address Azerbaijan’s reliance on hydrocarbon exports by boosting the competitiveness and inclusiveness of its private sector. The Bank will channel investment and advisory support to small and medium-sized enterprises in non-oil sectors such as agribusiness, manufacturing and services, information and communication technology, and infrastructure.
The Bank will also focus on empowering female- and youth-led enterprises, supporting innovation and expanding export capabilities through greater competitiveness, while continuing to work with government entities to strengthen corporate governance, advance reforms to state-owned enterprises and improve the overall business climate.
The second priority aims to help Azerbaijan unlock its substantial renewable energy potential. The Bank will continue to support the development of solar and wind energy projects, enhance energy efficiency and bolster climate resilience. Strengthening Azerbaijan’s energy grid and enabling exports of renewable energy will be central to this effort.
The EBRD will help Azerbaijan to capitalise on its geographical location between Europe and Asia. The Bank will invest in sustainable transport networks, municipal infrastructure and digital connectivity, with a particular focus on projects linked to the Middle Corridor.
The EBRD’s Head of Azerbaijan, Nataly Mouravidze said: “I’m pleased with the recent Board approval of our new strategy. We at the Baku resident office are looking forward to stepping up our work further. Over the course of the next five years, we will work with Azerbaijan to build a diversified, inclusive and sustainable economy that is driven by innovation and private-sector growth. By tapping into Azerbaijan’s renewables potential and enhancing its regional connectivity, we can unlock long-term opportunities for the country and its people. We already have a strong foundation to build on.”
Azerbaijan’s economy remains heavily reliant on oil and gas. While progress has been made with the diversification of its export base, challenges persist. The EBRD’s new strategy reflects its commitment to fostering a vibrant non-oil economy and promoting a greener, more inclusive future. The Bank will also couple its investments with robust policy engagement to support enhanced governance.
The EBRD is the largest institutional investor in Azerbaijan. To date, the Bank has invested over €4 billion(US$4.2billion) in Azerbaijan across 195 projects in sectors including renewables, connectivity and sustainable infrastructure.
