AGP Executive Report

Public Finance: Azerbaijan forecasts 2027 consolidated budget revenues at AZN 47.61bn and expenditures at AZN 50.39bn, implying a deficit of AZN 2.78bn; the state budget alone is set to exceed AZN 42bn in 2027 with oil-and-gas still funding about 39.5% of revenues. Trade Performance: Azerbaijan’s foreign trade surplus jumped to $10.39bn in Jan–Aug 2026 as exports rose 27.8% to $21.82bn and imports fell 24.1% to $11.42bn. Middle Corridor & Logistics: OTS officials say customs and transit procedures along the Middle Corridor are being streamlined to make it more business-friendly, while Turkish and regional voices push for a common trade platform for local SMEs and cultural products. Rail & Connectivity: The ADB plans to expand cooperation with Azerbaijan Railways, with board members visiting Ganja by train. Energy & Industry: SOCAR completed a 10% stake acquisition in Côte d’Ivoire’s Baleine project, and SOCAR/George Washington University discussed education and research cooperation. Climate & Agriculture: Azerbaijan committed up to 1bn manat for climate-resilient irrigation (2026–2030) and is using an AI farmer scoring system to target water-saving practices. Regional Diplomacy: Azerbaijan and the Pan-African Parliament explored deeper parliamentary and economic ties, while Azerbaijan–UK talks focused on a transport and digital roadmap.

OTS Trade & Integration: At an OTS think-tank conference in Baku, Azerbaijan’s analysis chief said Turkic states’ trade turnover tops $1.1tn, with shared borders boosting trade and distance weighing on flows. Middle Corridor Push: Turkish officials framed the Middle Corridor as an “economic development belt,” stressing lower transit costs, simpler customs, and digitalisation; forecasts cited could lift corridor trade sharply over 30 years. Turkic Finance Plans: Türkiye floated a joint development bank for Turkic states to back Middle Corridor projects, alongside work on a digital economic platform for the bloc. Audit Modernisation: President Ilham Aliyev urged digitising audit work, expanding AI and analytics, and upgrading methods to meet international standards. Renewables Deal: Masdar and Azerbaijan’s AGEC agreed to expand Garadagh solar by at least 350MW and add large battery storage, while also exploring round-the-clock renewable power. Mining in Nakhchivan: IRH and AzerGold signed to assess Nakhchivan’s mineral potential, with possible future joint ventures. US Tariff Risk for Azerbaijan: A US House procedural vote advanced a bill that could enable up to 100% tariffs on countries buying Russian oil and gas, with Azerbaijan listed among major buyers. Gold Trade Surge: Azerbaijan’s gold exports jumped more than 20x in value in Jan–Jul 2026, with the UK taking the bulk and marking a return after 16 years.

Azerbaijan–Türkiye Energy Push: Foreign Minister Jeyhun Bayramov said Baku and Ankara are coordinating “coming decades” projects, including green power exports to Europe via the Black Sea and a strategic electricity cable linking Nakhchivan to Türkiye. Regional Peace & Shipping: Türkiye’s Hakan Fidan urged restoring the pre-war Strait of Hormuz status quo and warned against Black Sea escalation that endangers Turkish firms and citizens. Trade & Investment Signals: Azerbaijan’s gas export volume slipped 0.5% to 16.38 bcm, while export value fell 4.8% to $5.71bn; oil exports were led by Italy (57.7%). Direct investment abroad surged into Italy—about $3.25bn in H1 2026—while Türkiye remained a top destination. Green Finance & Power Corridors: Azerbaijan and the ADB discussed renewable energy, grid upgrades and green corridors, including routes via Nakhchivan. EU/Global Context: EU plans a common minimum age for social media use; US EPA repealed limits on emissions from coal and gas plants. Food Safety Cooperation: Azerbaijan and Belarus advanced veterinary medicine and food-safety system integration. Switzerland Business Drive: Economy Minister Jabbarov highlighted new cooperation opportunities with Swiss firms after the 10th joint commission meeting.

Energy & Finance: XRG (ADNOC’s investment arm) completed its acquisition of an equity stake in Azerbaijan’s Southern Gas Corridor CJSC, strengthening the Caspian-to-Europe gas export platform and deepening UAE-Azerbaijan cooperation with SOCAR. Ratings Watch: Fitch affirmed SOCAR’s long-term rating at BBB- (Stable outlook) and expects SOCAR to spend about $2.35bn a year on capital projects through 2030, with EBITDA and leverage dynamics shaped by SGC consolidation and oil/refining margins. Oil Prices: Azeri Light crude rose to $127.29/bbl (up $7.27), a notable jump from the budget’s much lower average assumption. Trade & Diplomacy: Türkiye’s FM Hakan Fidan is set to visit Baku for talks on trade (target $15bn), defence cooperation, energy and regional peace. Banking Deal: ABB Financial Group completed its controlling-stake purchase of Uzbekistan’s Davr Bank, with the new “ABB Davr” brand and an S&P rating upgrade to B+. Digital Economy: Azerbaijan opened the first phase of SABAH.city innovation hub in Baku, tied to the “Azerbaijan’s New Digital Architecture” push for AI, data centers and startup incubation. Legal/Media: Two Azerbaijani TikTokers were arrested over alleged incitement of religious hatred.

Aviation & Tourism: Azerbaijan Airlines named aviation veteran Mario Chaves CEO of its passenger airline subsidiary, signaling an expansion push with international best practices. Cybersecurity: Azerbaijan’s National Cybersecurity Agency flagged TikTok accounts impersonating payment systems, using template websites and paid ads to lure users into sharing bank card details. Energy & Industry: Zakh Renewable Energy launched a 600 MW solar panel and 500,000 sq m BIPV manufacturing facility in Ras Al Khaimah, targeting UAE, GCC and export markets. Finance & Development: Azerbaijan and the ADB discussed private investment and energy/transport projects; the bank has allocated $5.6bn for 160 projects since Azerbaijan joined. Macroeconomy & Risk: Moody’s said AI investment could boost growth across Central Asia and the Caucasus, while also noting infrastructure needs; it also pointed to normalization with Armenia as a positive factor for regional stability and trade. Digital Infrastructure: AzerTelecom and DE-CIX are set to launch AZE-IX, strengthening Azerbaijan’s role as a regional internet gateway. Policy & Regulation: Azerbaijan’s Central Bank joined the UNDP Sustainable Insurance Forum to expand cooperation on climate-risk resilience in insurance supervision. Diplomacy & Business Links: UAE National Security Advisor Sheikh Tahnoon bin Zayed met President Ilham Aliyev, with renewable energy and investment cooperation agreements signed.

Digital Justice & Cooperation: Prosecutor General Kamran Aliyev joined the 7th meeting of ECO Prosecutors General in Turkistan, discussing digital transformation and mutual legal assistance on criminal matters, extradition, corruption and money laundering. Renewables Manufacturing: Zakh Renewable Energy launched a solar panel and BIPV (building-integrated photovoltaics) facility in Ras Al Khaimah Economic Zone, targeting 600 MW solar panels and up to 500,000 sq m of BIPV façades annually for UAE/GCC and export markets. Innovation & Skills: President Ilham Aliyev opened the first phase of “SABAH.city” innovation campus in Baku, a 20-hectare project designed to train 1,500+ students and host thousands of visitors daily, including an ASAN AI Hub. Banking & Money: The Central Bank reported that notes in circulation surpassed AZN 1.7bn for the first time. Telecom & Internet Infrastructure: AzerTelecom and DE-CIX plan to launch AZE-IX, a neutral internet exchange to cut latency and boost resilience as part of the Digital Silk Way. Finance Deal: Bank Respublika approved its buyout of AccessBank, with the transaction expected to close by November. Energy & Trade Links: AzerGold and Kyrgyzaltyn discussed mining cooperation in Bishkek, including joint project prospects. Transport Glitch: Baku Metro’s Red Line disruption near Icherisheher was resolved and schedules were restored.

Banking Deal: Azerbaijan’s systemically important Bank Respublika approved the buyout of AccessBank, with the transaction set to close by November; AccessBank’s current backers (IFC, EIB, ADB, FMO, OeEB and responsAbility) can take preference shares in Respublika to hold 25% of its capital, while the combined lender will reach about 4.5bn manat in assets and 3.3bn manat in loans. Energy & Infrastructure: Türkiye and Azerbaijan are pushing deeper power cooperation, with a potential intergovernmental agreement to connect renewable electricity across Turkey, Azerbaijan, Georgia and Bulgaria planned for November (COP31 in Antalya). Trade Corridor Update: TRIPP—the Armenian-Azerbaijani trade corridor tied to the Middle Corridor—has been delayed to 2027, with Azerbaijan saying the US-Armenia process is moving forward and upgrades on the Nakhchivan segment continue. Agribusiness & Rural Economy: Kalbajar’s Honey Festival highlighted beekeeping’s growing role in jobs and exports, with officials citing 200,000+ bee colonies relocated to liberated territories and branded product support to boost market reach. Regional Finance Outlook: Azerbaijani experts say BRICS membership talks reflect demand for more predictable cooperation for smaller economies amid shifting trade routes and currency settlement trends.

Caspian Energy Security: Iran is sending its Amir Kabir semi-submersible rig back to the Caspian, reviving offshore exploration after nearly a decade—an energy-security move as Strait of Hormuz risks keep reshaping regional supply planning. South Caucasus Diplomacy: A U.S. chargé d’affaires said reciprocal Azerbaijan–Armenia visits are part of Washington’s push for durable peace, while foreign diplomats wrapped another trip to Karabakh and East Zangezur, touring monasteries and the Istisu mineral water plant and attending Kalbajar’s Honey Festival. Agri & Reconstruction Jobs: Belarus and Azerbaijan plan a Karabakh agrotown in 2027 and a joint elevator production venture in Aghdam, adding to post-conflict economic rebuilding. Energy Links with Türkiye: Azerbaijan and Türkiye used the 5th Energy Forum to discuss new electricity transmission projects, including interconnections via Nakhchivan and a green corridor toward Europe. Competition Policy: Azerbaijan approved a National Action Plan to develop competition and curb monopolistic activity. Local Business & Exports: Azerbaijan’s beekeeping push continues—over 200,000 bee colonies have been relocated to liberated territories, with Kalbajar’s festival highlighting growing commercial potential.

Energy Markets: Azerbaijan’s Azeri Light crude rose to about $120.02/bbl (+0.4%), keeping prices well above the state budget assumption of $65. Oil & Shipping Risk: With tensions around the Strait of Hormuz, Iran-Oman reportedly reached a final agreement on a shipping route, while Iraq indefinitely closed two key border crossings with Iran after drone-related attacks. Diplomacy & Business Climate: A large diplomatic corps tour of Karabakh and East Zangezur highlighted restoration and the Istisu mineral water bottling plant, while Poland’s envoy said media “incidents” won’t derail Azerbaijan-Poland ties. Agri-Industry Investment: Belarus and Azerbaijan plan a joint agricultural agrotown in Karabakh in 2027 and a Vertus-led elevator manufacturing venture in Aghdam. Local Economy & Tourism: Kalbajar’s Honey Festival showcased beekeeping’s role in jobs and growth, with officials linking it to wider tourism and agricultural potential. Regional Peace Process: The U.S. says reciprocal Azerbaijan-Armenia visits support durable South Caucasus peace. Governance/Legal: Opposition figure Seymur Khazi says he faced a travel ban ahead of a journalism event in Vilnius.

Diplomatic Outreach in Karabakh & East Zangezur: A 150-strong diplomatic corps (58 countries, 9 orgs) is on a two-day visit to Shusha, Khankendi, Aghdara and Kalbajar, touring social and economic restoration projects and heritage protection efforts—its 22nd such trip since 2020. Oil & Budget Watch: Azeri Light rose to about $120.02/bbl, far above Azerbaijan’s $65/bbl budget assumption, keeping the fiscal picture tightly linked to global crude moves. SOFAZ & Global Investing: Euronews highlights SOFAZ’s role as a founding investor seat in the China-ASEAN Joint Investment Council, underscoring Azerbaijan’s corridor position between Asia and Europe. Local Jobs & Resettlement: Officials in Khankendi discussed building a regional employment ecosystem for residents of liberated areas, matching employers with resettlement needs. Energy Grid for Renewables: Azerbaijan’s renewable energy agency says a flexible, “smart” grid is key to managing intermittent generation and protecting the power system. Trade Push: Mexico’s ambassador says both sides want to boost trade and investment, with Shusha hosting the Independence Day event attended by the visiting diplomatic corps. Sports Business Angle: Transfermarkt data puts Qarabağ at the top of Azerbaijan Premier League squad values (25.08m euros), ahead of Sabah and Neftçi.

Middle-Corridor Finance: SOFAZ joined the China-ASEAN Joint Investment Council as a founding member, underlining Azerbaijan’s role on the Asia-Europe trade corridor. Karabakh Jobs & Social Reset: Authorities held a roundtable in Khankendi on creating an employment ecosystem for residents resettled after liberation, with labour and economy bodies and employer input. Energy Diplomacy: The 5th Azerbaijan–Türkiye Energy Forum kicked off in Baku, with talks on hydrocarbons, renewables and electricity markets, and a push for a cross-border “green electricity” corridor deal ahead of COP31. Grid for Renewables: Azerbaijan’s renewable expansion needs a flexible, “smart” power grid to balance intermittent generation and strengthen resilience. Competition Policy: President Ilham Aliyev approved a 2027–2029 plan to build a “competition map,” review market rules and curb monopolistic activity. Investment Pipeline: Azerbaijan’s 2nd International Investment Forum is set for 25–26 September in Baku, focusing on connectivity, energy/green transition, AI, infrastructure and SMEs. Trade Links: Mexico and Azerbaijan pledged to boost trade and investment ties, with Shusha hosting the Independence Day event. Agrifood Controls: Dagestan’s phytosanitary watchdog monitored 9,000+ tons of plant imports and cleared shipments after quarantine disinfection.

Visa & Tourism: Azerbaijan and Jordan are moving toward abolishing visa requirements for citizens traveling on ordinary passports, with a draft bill set for parliamentary committee review on Sept. 14—aimed at boosting people-to-people ties, tourism, and business exchanges. Oil & Budget Watch: Azeri Light jumped $6.22 (5.49%) to $119.54/bbl, far above the $65/bbl average used in Azerbaijan’s state budget, with FOB Ceyhan pricing also rising. Karabakh Reconstruction & Diplomacy: A 150-member diplomatic corps delegation from 58 countries and 9 organizations has started a two-day visit to Karabakh and East Zangezur, inspecting reconstruction in Khankendi, Shusha, Aghdara, and Kalbajar and reviewing social, economic, and heritage projects. Banking Resilience: Moody’s says Azerbaijani banks have the lowest exposure to regional geopolitical risks in Central Asia and the South Caucasus, citing limited ties to Russia, hydrocarbon support, and manat stability. Business Climate: Azerbaijan is pushing entrepreneurship and a better business environment, including digitalizing services and a new mechanism to gradually shift certain state-provided services to private-sector delivery for SMEs, exporters, and investors. Internet Infrastructure: AzerTelecom and DE-CIX plan to launch AZE-IX, a new internet exchange to improve local traffic exchange, reduce latency, and strengthen Azerbaijan’s digital connectivity. Energy Exports: TAP’s expanded capacity (up to +1.2 bcm/year from Jan 1) supports higher gas exports to Europe and broader supply geography.

SME Policy Push: Azerbaijan’s economy ministry says entrepreneurship and the business climate stay top priorities, with plans to optimize and digitize support services and gradually shift more functions from state bodies to private-sector providers for micro, small and medium firms, exporters and investors. Ukraine Ties: Azerbaijan and Ukraine discussed expanding economic cooperation and investment links, including Azerbaijani participation in Ukraine’s reconstruction, with AZPROMO and the Ukrainian ambassador agreeing to keep working on trade and investment initiatives. Climate Diplomacy: The UN praised Azerbaijan’s COP29 leadership and its role in convening public and private stakeholders during Baku Climate Action Week, while Türkiye’s environment minister said Azerbaijan’s COP29 experience is directly helping preparations for COP31. Oil & Petrochemicals: Economy minister Mikayil Jabbarov met China’s CC7 executives to explore new projects and next phases in Azerbaijan’s oil and petrochemical sectors. Middle Corridor Logistics: Azerbaijan is positioning ports and rail as key Middle Corridor enablers, with regional connectivity talks highlighting the need for stronger links, digital integration and fewer bottlenecks. Humanitarian Demining: Ukraine is studying Azerbaijan’s urban humanitarian demining experience and invited ANAMA to a Brussels mine action conference. Energy Transition: Azerbaijan and China Energy discussed completing grid studies and advancing renewables, including a 160 MW solar project and next steps on offshore wind in the Caspian. Human Rights & Elections: A Baku court sentenced election monitor Anar Mammadli to 13 years and activist Anar Abdullayev to 12, with observers citing serious due-process concerns. Black Sea Incident: Drones attacked a foreign cargo vessel, killing two Azerbaijani sailors and injuring two others near Odesa, according to Azerbaijan’s foreign ministry. Trade Corridor Delay: TRIPP construction—linked to the Armenia-Azerbaijan peace framework—has been pushed to 2027, with Azerbaijan citing ongoing US-Armenia negotiations and continued upgrades on the Nakhchivan segment.

TRIPP & Peace Talks: The U.S. Embassy in Armenia clarified that Chargé d’Affaires David Allen’s Baku visit was aimed at supporting TRIPP’s move from vision to implementation, including steps for Azerbaijan-Armenia peace and the TRIPP Development Company. Public Finance Rules: President Ilham Aliyev signed a decree tightening how targeted budget and extra-budgetary funds can be used, including caps on salary supplements from extra-budgetary sources. Labor Snapshot: Azerbaijan reported 1.781m salaried employees as of Aug 1, with average nominal monthly pay up 7.2% y/y to AZN 1,176.7 in Jan–July 2026. Oil Market: Azeri Light rose above $113/bbl (Augusta CIF), while budget planning still assumes a much lower $65 average oil price. Energy & Trade Corridors: Kazakhstan and Azerbaijan are working to restart Caspian passenger ferry service on the Kuryk–Baku–Kuryk route to boost tourism and Middle Corridor connectivity. Climate Action Week (Business Angle): Roundtables in Baku pushed private-sector climate financing, water efficiency and sustainable energy hubs ahead of COP31. Gold Mining: AzerGold began blasting at the Soyudlu (Zod) deposit in Kalbajar, moving the project closer to active production. Israel-Azerbaijan Tech Focus: Israel’s ambassador said the next intergovernmental commission meeting will be held in Azerbaijan this year, with IT, AI and cybersecurity highlighted.

Gold Mining Push: AzerGold says it has completed its first drilling and blasting at the Soyudlu (Zod) deposit in Kalbajar, a Caucasus-scale project on the Armenia border, with reserves estimated at 1.03m ounces (gross value about $4.5bn). Customs Update: Azerbaijan changed import duties for alcoholic drinks through end-2030 rules, including a higher minimum rate for spirits (15% but not less than $4/l) and wine (15% but not less than $3/l). Climate Finance & Policy: At Baku Climate Action Week, Azerbaijan’s climate representative urged banks to make climate finance a core business, while UNECE praised Azerbaijan’s climate leadership and highlighted the Middle Corridor as a “green corridor” where ports and terminals should be designed with climate considerations. Geothermal Outlook: SOCAR flagged geothermal as a future growth sector and is seeking an equity partner to share project risks. Middle Corridor Logistics: Azerbaijan Railways and Chinese partners discussed boosting freight volumes and digitalising port-rail operations, including expanding the Lianyungang–Baku route. World Bank Talks: Economy Minister Jabbarov met the World Bank’s South Caucasus director on cooperation, SME finance, and the World Bank’s unified country office model. Armenia-Azerbaijan Diplomacy: Foreign ministers are set to meet soon, with Baku also linking talks to constitutional and delimitation steps under the peace process.

Climate Finance & COP31 Prep: Azerbaijan’s climate leaders used Baku Climate Action Week to stress that the crisis can’t be solved alone and that the real bottleneck is financing, with calls to bring banks, investors and companies into implementation. Caspian Sea & Trade Infrastructure: Baku Port says seabed dredging in the Caspian will start by end-2026 after an international tender, aiming to protect operations as sea levels shift. Middle Corridor Logistics: Azerbaijan Railways-linked officials urged faster, more coordinated freight flows, backing a single transit operator concept and shared digital customs/IT tools across Kazakhstan, Azerbaijan and Georgia. Macroeconomy Watch: Azerbaijan’s inflation stayed flat last month; GDP grew 1.2% in eight months; strategic foreign exchange reserves neared $91bn. Energy & Markets: Azeri Light crude rose above $108/bbl, while Azerbaijan’s wind/clean-energy transition was framed as irreversible. Digital Economy: Azerbaijan and Huawei discussed expanding digital and green solutions, including local R&D centres. Baku Green Cities: Plans target public green spaces in Baku reaching about 2,500 hectares by 2040. Business/Legal Crossovers: A Georgian national was charged in the US over a $1.3bn Medicare healthcare fraud scheme.