AGP Executive Report

Cambodia Trade: Azerbaijan and Cambodia signed trade and economic cooperation agreements in Baku, while their chambers of commerce agreed to build business links. SOCAR is open to exploring energy investments, and officials pointed to opportunities in agriculture, manufacturing and logistics. Oil & Gas: President Ilham Aliyev approved a production-sharing agreement for exploration and development in the Guba-Caspian region involving SOCAR and Gran Tierra Energy. Agriculture: Azerbaijan and China signed a cooperation deal covering investment, technology transfer, trade and digitalization; Azerbaijan also showcased its wine sector at a global congress in China. Economic Shift: Economy Minister Mikayil Jabbarov said the non-oil and gas sector accounted for 72% of GDP in 2025, as Azerbaijan’s non-oil exports rose by more than 20%. Energy & Infrastructure: German firms outlined gas and renewable-energy plans in Baku, while AIIB grant agreements will support Caspian green-energy projects. Transport & Investment: Czech investment in Azerbaijan reached about $74 million, mostly in non-oil sectors; transit cargo between the countries rose 47% in 2025. Vallourec also won a contract for the Absheron gas field.

Absheron Gas Development: TotalEnergies awarded Vallourec a major contract to supply more than 16,000 tonnes of tubular products for the Absheron field, including about 159 kilometres of corrosion-protected pipeline. Czech Investment and Transport: A Baku business forum put rail, logistics, aviation and urban mobility on the agenda. Bilateral trade reached about $760 million in January–August 2026, up 7.7% year on year; Czech investment in Azerbaijan totals $74 million, mostly outside oil and gas. Mining Expansion: State-owned AzerGold is exploring potential mining projects and investment partnerships in Colombia, drawing on its expertise from exploration through production. Green Infrastructure: AIIB has approved $45 million for Azerbaijan’s first large-scale Caspian seawater desalination plant, expected to be the country’s first water-sector public-private partnership. The bank is also assessing a proposed 200 MW Absheron-Garadagh wind project.

Rail Freight: Azerbaijan Railways received 416 China-bound block trains in January–September, up 40% year on year, strengthening the country’s role on the Middle Corridor. Green Energy: The Asian Infrastructure Investment Bank approved a $45 million loan for Azerbaijan’s seawater desalination project and backed green-energy corridor work with a $1.1 million grant. Manufacturing: A new fertilizer plant is targeting export markets four times the size of Azerbaijan’s domestic market, while the country and China are exploring agricultural cooperation. Economic Outlook: Azerbaijan recorded 1.5% GDP growth in January–September. Caspian Risks: The five Caspian states are seeking joint measures to address falling water levels, a growing challenge for regional economies, transport and energy links.

Transport: Azerbaijan Railways received 416 block trains from China in January–September, up 40% year on year, strengthening the Middle Corridor’s role in trade between Asia and Europe. Manufacturing and Agriculture: Sumgait’s first potassium sulfate plant is set to open in November with annual capacity of 40,000 tonnes; 30,000 tonnes are earmarked for export from 2027. Azerbaijan’s agriculture minister also explored cooperation with Chinese agritech firm DBN Group. Energy: Wood Mackenzie says Azerbaijan’s export infrastructure gives it a strategic advantage in moving Caspian oil and gas to global markets. The AIIB is backing green energy and water projects, including a $45 million loan for a seawater desalination plant. Regional Industry: East Zangezur’s industrial output fell 5.4% in 2025 to AZN 86.3 million, despite a sharp rise in the number of operating enterprises.

Agriculture: Azerbaijan’s agriculture minister visited China to explore cooperation with high-tech firm DBN Group, as the country prepares a 2026–30 programme to modernise farming and food processing. Manufacturing: Sumgayit’s first potassium sulfate plant is due to open in November, with capacity of 40,000 tonnes a year—three-quarters earmarked for export from 2027. Energy: Wood Mackenzie says Azerbaijan’s oil and gas export infrastructure gives it a strategic edge; gas now accounts for about 60% of hydrocarbon production. Trade and transport: The EU is seeking up to €12 billion in investment to expand the Middle Corridor, while work continues on the Horadiz–Aghband highway and railway. Industry and investment: Azerbaijan’s GDP grew 1.5% in January–September, while East Zangezur’s industrial output fell 5.4% in 2025, despite a sharp rise in the number of operating enterprises. Caspian: Five littoral states agreed to establish a commission on declining sea levels, with its first meeting planned in Azerbaijan in 2027.

Economic Output: Azerbaijan’s GDP grew 1.5% year on year to 102 billion manats in January–September. Non-oil industry rose 5.4%, while transport and storage expanded 10%; oil and gas output fell 1.2%. Caspian Logistics: At the regional environmental summit, five coastal states agreed to establish a joint commission on the Caspian’s falling water level. The decline is already challenging shipping: ASCO says its ferries can carry only 80% of cargo originating in Kazakhstan. Middle Corridor: The EU is aiming to mobilize up to €12 billion for the route linking Central Asia and Europe, while work continues on Azerbaijan’s Horadiz–Aghband highway and railway, including freight service to the Araz Economic Zone Industrial Park. Regional Trade: Azerbaijan joined the Central Asian leaders’ summit as a full participant, with transport, industrial cooperation and investment among the priorities; its trade with Central Asian countries rose by more than 50% last year. Business Links: Azerbaijan and Germany discussed energy, industrial and technology projects, while Agriculture Minister Majnun Mammadov is visiting China for talks and meetings with agricultural research bodies and companies.

Green Energy: Azerbaijan signed AIIB-backed grants to prepare the Caspian Green Energy Corridor and plan coastal infrastructure for offshore wind. The bank also approved a $45 million loan for a seawater desalination project. Energy & Sustainability: SOCAR scored 50 in S&P Global’s 2026 sustainability assessment, outperforming 83% of companies in its industry group. Regional Trade: At the Central Asia–Azerbaijan summit, leaders called for closer trade, transport and industrial ties; Kazakhstan proposed raising six-country trade to $20 billion, while Uzbekistan backed a regional business forum in 2027. German Partnership: Azerbaijan and Germany discussed joint work in energy, industry and technology, with business council and investment group meetings ahead. Caspian Risks: Leaders warned that falling sea levels threaten coastal livelihoods and the investment appeal of regional logistics routes, and agreed to establish a joint commission, with its first meeting due in Azerbaijan in 2027.

Water Infrastructure: AIIB approved a $45 million loan for a 300,000-cubic-metre-a-day desalination plant in Sumgayit, the first water-sector project under a public-private partnership. Digital Procurement: Entrepreneurs can now sign tender documents online using SİMA İmza, a change expected to ease participation for small businesses. Oil Services: SOCAR-backed Caspian Drilling Company’s 2025 net profit fell 7.4% to $62.1 million, despite higher revenue and operating profit, as a shift from a tax benefit to a tax expense cut earnings. Regional Trade: At the C6 summit, Azerbaijan reported trade with Central Asian countries rose more than 50% last year; leaders also backed closer transport, industrial and green-energy links. Georgia says it will remove intermediaries from Azerbaijani electricity imports, while Türkiye is advancing a railway link towards Nakhchivan. Industry and Clean Energy: Azerbaijan and Türkiye signed a memorandum to expand industrial cooperation, while Sumgayit Industrial Park plans six new production buildings. Azerbaijan’s 3-GW solar push is also set to bring manufacturing into its renewable-energy drive.

Regional Industry: Azerbaijan joined Central Asian leaders in Awaza to advance cross-border production chains, transport links and green energy. Uzbekistan proposed a “six countries, one product” model, while Kyrgyzstan called for a shared e-commerce platform and Tajikistan backed joint processing and a regional refinery. Energy Links: Azerbaijani and Armenian officials held technical talks on power lines under the TRIPP project. Georgia also plans to buy Azerbaijani electricity directly, removing intermediaries and cutting costs. Manufacturing: Production has begun at Azerbaijan’s first factory for Western-style rifles, a joint venture with Israeli firm ARI Arms. Separately, a $100,000 tender will fund designs for new manufacturing buildings at Sumgayit Industrial Park. Investment and Energy: Fitch Solutions expects budget surpluses of 2.4% of GDP in 2026 and 2.2% in 2027. SOCAR Green says more than 1.5 GW of renewable projects are under development, including solar, wind, storage and a Black Sea cable. The EU says it will maintain gas cooperation with Azerbaijan while putting greater emphasis on clean energy.

Industrial Cooperation: Azerbaijan’s Economic Zones Development Agency and Türkiye’s Adana Hacı Sabancı Organized Industrial Zone signed a memorandum to expand business links and pursue joint initiatives in green technology, energy efficiency and digitalization. Regional Trade: At the Central Asia–Azerbaijan summit, Kyrgyz President Sadyr Japarov proposed joint projects in agricultural processing, light industry, construction materials and logistics, alongside a regional e-commerce platform. President Ilham Aliyev said trade with Central Asia rose more than 50% last year and urged partners to use joint investment funds for manufacturing and exports. Logistics: Azerbaijan is exploring critical-minerals transport and warehousing projects with Dutch firm C. Steinweg Group along the Middle Corridor. Capital Markets: The Baku Stock Exchange and UK representatives discussed dual listings to help Azerbaijani companies reach international investors. Green Manufacturing: A planned 3 GW solar-panel complex in the Alat Free Economic Zone is set to include production of silicon crystals and components, with facilities due to open in stages from 2027. Energy Links: Azerbaijan, Kazakhstan and Uzbekistan are working on a green-energy corridor, while Georgia plans to import Azerbaijani electricity directly, cutting out intermediaries.

Middle Corridor: At the Avaza ministerial meeting, Jeyhun Bayramov called for better infrastructure links, simpler transit procedures and digitalized cargo flows, highlighting green-energy cooperation with Kazakhstan and Uzbekistan. Logistics Investment: Azerbaijan’s economy minister and Dutch logistics group C. Steinweg discussed critical-mineral handling, warehousing and projects along the corridor. A Czech transport and business delegation is due in Baku on October 11–16 to explore rail, aviation and multimodal opportunities. Energy Support: Azerbaijan sent Ukraine transformers, 186 km of electrical cable and other equipment in 10 trucks to help prepare its power system for winter. Transport Buildout: The Asian Development Bank is set to invest $350 million in Azerbaijan’s railway upgrade, while the Alat Free Economic Zone’s cargo airport is targeted to open by April 2027. Agriculture: Azerbaijan’s farm exports are nearing $1 billion, as the economy seeks to grow beyond oil.

Energy Outlook: The US EIA kept Azerbaijan’s 2026 oil production forecast at 550,000 bpd, but lifted expectations for the 3rd and 4th quarters to 550,000 bpd each. Humanitarian & Power Infrastructure: Azerbaijan dispatched a new €2.5m-worth shipment of electrical equipment (cables, wires, transformers) from Sumgayit Technologies Park to support Ukraine’s electricity supply. Transport & Digital Cooperation: Azerbaijan and the UK signed a roadmap on transport and digital development, plus a memorandum and plans for joint working groups covering AI and cybersecurity. Space & Comms Exports: Korea Aerospace Industries showcased a 6G low-orbit communications satellite and compact SAR system at IAC 2026 in Antalya, targeting export partnerships. Regional Connectivity: Kazakhstan and Azerbaijan are preparing a new Aktau–Sumgayit fibre-optic line to strengthen the Middle Corridor’s digital backbone. Agribusiness & Industry Links: A Kyrgyz investment agency met an Azerbaijani developer interested in the Asman eco-city project in Issyk-Kul, with talks on incentives and venture financing. Food Security Angle: A World Food Day piece highlights geospatial tools for farming decisions across Azerbaijan and the region.

Middle Corridor Push: A World Bank-backed assessment says the Trans-Caspian/Middle Corridor could quadruple Asia-Europe freight by 2040, but only if border delays, fragmented paperwork, and weak coordination are fixed—pointing to a need for unified digital systems and more than $55bn in rail, ports, roads and logistics upgrades. Azerbaijan-UK Trade & Energy: In Baku, Azerbaijan and the UK held the 8th Joint Intergovernmental Commission meeting, signing a protocol and four documents covering green energy, transport connectivity and urban mobility, while agreeing to set up new working groups on energy, transport, digital transformation and AI. Digital Telecom Cooperation: Azercell CEO Zarina Zeynalova met DCO Secretary-General Deemah AlYahya to discuss building an AI-ready digital ecosystem and deeper international cooperation after Azerbaijan’s DCO accession. Black Sea Shipping Risk: Drone attacks in the Black Sea sank or damaged cargo vessels near Bulgaria and Romania, with missing crew reported—highlighting growing disruption and security concerns for regional maritime trade. Space & Earth Data: Azercosmos highlighted Azerbaijan-China space cooperation at the Antalya International Astronautical Congress, stressing satellite data and AI for agriculture, disaster management and infrastructure planning. Consumer Oversight: Azerbaijan’s antimonopoly and consumer market control agency shared consumer-rights experience with Türkiye at the Ankara Consumer Council meeting.

Hydropower Build-Out: AzerEnerji is nearing completion of three new Lachin hydropower plants—Seyidlar (4.59 MW), Bulovlu (3.16 MW) and Gosasu (2.93 MW)—adding 10.7 MW as turbines and generators are installed, with commissioning expected in coming months. Macroeconomy: PASHA Holding’s Elman Eminov says Azerbaijan’s inflation stays around 6% as higher energy prices lift import costs while slower non-oil growth offsets the pressure. Energy-for-Europe Deal: VNG AG and SOCAR signed a long-term partnership to expand Azerbaijani gas supplies to Europe and support a longer-term shift toward hydrogen and biomethane. Middle Corridor Logistics: Azerbaijan’s Alat Free Economic Zone plans a cargo airport opening by late March/early April 2027, starting with 500,000 tons/year and scaling to at least 2 million tons, to cut customs and transit friction. Trade & Transport Talks: Deputy PM Shahin Mustafayev met Russia’s Alexey Overchuk on boosting INSTC cargo flows and bilateral trade across industry, energy, agriculture, and logistics. Agri-Exports Push: Azerbaijan’s farm exports are nearing $1 billion, with agriculture and agro-industry driving non-oil export growth. Regional Industry Diplomacy: The German–Azerbaijani Connectivity Conference opened in Baku to attract European finance and tech for Middle Corridor infrastructure, transport, logistics, green energy and digitalization. Black Sea Shipping Shock: A Turkish-owned grain cargo ship (with Azerbaijani and Indian crew) sank after a reported drone strike; 11 were rescued, and the captain was killed.

Maritime & Food Security: A Turkish-owned grain/corn cargo ship, Royad Mammadov, was hit by two Russian drones in the Black Sea near Romania’s EEZ, killing the captain and leaving 11 crew rescued after a major helicopter-and-ship rescue; Ukrainian officials say Azerbaijani and Indian citizens were aboard, underscoring risks to regional shipping and global food flows. Pharma Manufacturing: President Ilham Aliyev attended the inauguration of Gen Pharma Caucasus Manufacturing Operations LLC’s pharmaceutical plant in Pirallahi Industrial Park, with a video shared on his social media. Energy & Industry Deals: Gran Tierra Energy said Azerbaijan’s Milli Majlis ratified its onshore Guba-Khazaryani exploration/development production sharing agreement and noted completion of an airborne dFTG survey. Digital Cooperation: Azerbaijan’s FM Jeyhun Bayramov met the Digital Cooperation Organization’s secretary-general to expand work on digital transformation, AI, innovation and startups, including energy-transport digital tools. Education Links: Azerbaijan will host 23 Chinese students under the Intergovernmental Scholarship Program for 2026-27 across major universities. Engineering & Logistics: Kazakhstan and Azerbaijan are developing high-capacity Caspian cargo railway ferries able to carry up to 120 rail wagons at once. Construction/Services: Hema Energy is pursuing EPC projects in Oman with Azerbaijan-based BBG Energy, targeting small-to-medium jobs and local procurement.

Green Agriculture: Azerbaijan plans a 230-hectare greenhouse zone in the liberated territories, aiming to boost higher-value output using modern, technology-equipped intensive greenhouses. Investment Shift: In 2025, Azerbaijan directed 75.3% of fixed capital investment to the non-oil and gas sector (16.358bn manats), with construction and installation spending heavily concentrated in that segment. Industrial Manufacturing: President Ilham Aliyev attended the inauguration of a pharmaceutical manufacturing plant at Pirallahi Industrial Park, part of efforts to expand local medicine production and reduce import dependence. Energy & Trade Risk: Disruptions in the Strait of Hormuz could push global grain and fertilizer prices sharply higher—ICC warns grain prices may rise up to 80% if the situation drags on. Downstream Expansion: SOCAR Downstream was selected as project management consultant for Congo’s CORAF refinery modernization, supporting the pre-FEED phase and deepening Azerbaijan–Congo energy ties. Green Transition Links: Azerbaijan and Sweden discussed cooperation on green transition and innovation through a Swedish program focused on renewable energy and sustainable urban solutions. Aviation Sanctions Impact: US sanctions on Iranian airlines are reshaping regional flight operations, with some countries suspending or limiting Iranian routes, including to Azerbaijan and Georgia.