AGP Executive Report

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.

Huawei & Azerbaijan Tech Push: Economy Minister Mikayil Jabbarov met Huawei SVP Philip Gan to discuss digital and green solutions, investment, tech transfer, human capital, and setting up local R&D centres. Climate-Ready Cities: Baku Climate Action Week heard plans to grow public green spaces to about 2,500 hectares by 2040 (including ~1,000 hectares of new areas) and link them via “green” corridors, alongside new building energy-efficiency standards. Peace Process & TRIPP: Deputy FM Elnur Mammadov met US Chargé d’Affaires in Armenia David Allen and US Chargé d’Affaires in Azerbaijan Amy Carlon, focusing on normalization, long-term peace, and implementing TRIPP via a TRIPP Development Corporation. Azerbaijan–Saudi Air Connectivity: AZAL will resume direct Baku–Jeddah flights from Sept. 15, four times weekly. Azerbaijan–China Economic Corridor Talks: PM Ali Asadov met CPC official Liu Haixing, highlighting green energy cooperation and expanding Belt and Road/Middle Corridor transit, plus the Zangezur Corridor. Azerbaijan–Algeria Commission Prep: Energy Minister Parviz Shahbazov and Algeria’s Mohamed Arkab discussed preparations for the first Azerbaijan–Algeria Joint Commission meeting in H1 2027, including energy ties (SOCAR–Sonatrach) and broader cooperation. Non-oil Exports Up: Azerbaijan’s non-oil exports rose 17.6% in Jan–Aug 2026 to $2.81bn, with August up 13% to $350.8m.

Caspian Water & Climate Risk: At Baku Climate Action Week, Ismail Serageldin and Deputy Ecology Minister Rauf Hajiyev warned that falling Caspian Sea levels are already reshaping coasts, ecosystems and coastal economies, pushing Azerbaijan to rethink water use in agriculture and factor water quality and pollution into planning. Oil Market: Azerbaijan’s Azeri Light crude jumped to $107.31/bbl, up 2.98%, well above the $65/bbl assumed in the 2026 state budget—another reminder of how fast fiscal math can shift with global prices. UN Climate Week in Baku: UNFCCC events in the capital focused on sustainable cities, transport, water and agriculture, plus how AI can strengthen early-warning systems for multiple hazards. Transport & Trade Corridors: Baku hosted the Black and Caspian Freight Forum 2026, spotlighting the Middle Corridor, Caspian Sea freight growth, and cross-border connectivity priorities. Renewables Push: Azerbaijan’s wind boom is accelerating, with officials pointing to rapid scaling of wind and solar generation and work on grid rules plus energy storage integration. EU-Azerbaijan Business Angle: The week also featured EU-linked regional cooperation themes, including cross-border renewable energy certificates for trusted green power trade. Energy Storage Roadmap: Azerbaijan’s renewable energy agency said a regulatory approach for storage and “red lines” for integrating renewables is being developed, with grid studies underway.

Central Bank Watch: Azerbaijan Central Bank FX reserves hit a record $15.3bn after buying $1.5bn in foreign currency in August, citing surplus current-account flows and continued de-dollarization. Energy Transition: Azerbaijan is working on a regulatory framework for renewables and energy storage; the agency head says a concept for storage integration could be presented by end-September, while demand growth is becoming a serious issue. Climate Markets & Power: Baku Climate Action Week 2026 pushed cross-border renewable energy certificates and carbon market mechanisms to unlock climate finance and enable trusted green electricity trade. Green Skills: bp opened a modern renewable energy lab at ASOIU (solar, wind, hydrogen) as part of a $2m education push. Digital Economy: “MoveUP” launched by major tech/finance firms to accelerate Azerbaijan’s digital growth and AI adoption. Tech & Finance Training: ADB and the Central Bank ran training on supervising domestic credit rating agencies. Business & Trade: Azerbaijan and Iran discussed implementation of joint transport, energy and water projects, including Astara terminal funding and the Aghbend-Kelala bridge. Human Rights: Anar Mammadli received a 13-year sentence, with rights groups calling it politically motivated.

Energy & Climate: Azerbaijan kicked off UNFCCC Climate Week 4 in Baku (Sept 7–11), with a focus on energy transition, climate finance and industrial decarbonization, while Energy Minister Parviz Shahbazov said wind generation could nearly sixfold and solar output rise 26% by year-end, stressing a paced shift with grids, storage and efficiency. Power Reliability: Azerishiq announced temporary electricity suspensions in parts of Baku (Yasamal), Goychay and Yevlakh for scheduled repairs to improve supply quality. Azerbaijan–Iran Trade & Transit: Deputy PM Shahin Mustafayev and Iran’s Roads and Urban Development Minister Farzaneh Sadegh reviewed progress under the Azerbaijan-Iran state commission, highlighting the Aghband–Kalaleh road bridge and steps to complete work at the Astara cargo terminal. Oil & Sanctions Watch: Georgia’s Kulevi Refinery operator Black Sea Petroleum says it has fully shifted to non-Russian crude since Aug 23, starting with Libyan oil shipments, after EU sanctions pressure. Agribusiness Exports: Azerbaijan exported 142.9k tonnes of tomatoes worth $172.1m in Jan–July 2026, up 9.7% in value year-on-year, with Russia the main destination. Defense Industry: President Ilham Aliyev visited the Azerbaijani Navy and a joint Azerbaijani-Turkish production line producing unmanned surface vessels SALVO and KAYRA.

Defense & Industry: President Ilham Aliyev visited the Azerbaijani Navy and reviewed production/testing of Turkish-designed unmanned surface vessels SALVO (armed) and KAYRA (kamikaze) built locally via a joint MIRAS–DEARSAN line, signaling a shift from importing drones to domestic output. Energy & Trade: SOCAR and China Eximbank move into a new industrial chapter, while Azerbaijan and Iran reviewed transit, energy and border cooperation, including railway progress toward Aghband. Food Exports: Azerbaijan exported 142.9k tonnes of tomatoes worth $172.1m in Jan–Jul 2026, with value up 9.7% year-on-year (Russia remains the main buyer). Finance & Risk: S&P upgraded Kazakhstan’s banking risk assessment, noting stronger supervision—an indirect read-through for regional lenders including Azerbaijan. Geopolitics & Tech: WSJ reports US “chip diplomacy” used Nvidia AI-chip access to help shape an Armenia-Azerbaijan preliminary peace deal.

Azerbaijan-Armenia Trade: Azerbaijan shipped 977 tonnes of diesel to Armenia via rail (16 wagons), adding to nearly 16,000 tonnes already exported, as normalization talks keep translating into practical supply flows. US “Chip Diplomacy”: The Wall Street Journal reports US negotiators used expanded access to Nvidia AI chips—linked to Armenia’s Firebird data center—as an incentive in brokering a preliminary Armenia-Azerbaijan peace deal. Energy Security: Europe’s gas squeeze is lifting Azerbaijan’s role in energy security as LNG and storage tightness push prices higher. Climate Finance & COP31: Azerbaijan took part in the Istanbul Climate Finance Summit, highlighting the COP29 “Baku Finance Goal” to reach $1.3tn by 2035 and focusing on climate-resilient cities ahead of COP31. Finance & Banking: S&P upgraded Kazakhstan’s banking risk assessment, noting stronger supervision and transparency—while also comparing regional regulatory effectiveness. Diplomacy & Regional Links: Azerbaijan’s ambassador visited Germany’s Lower Saxony to discuss trade, investment, transport and normalization developments. Sports & Tourism: IRONMAN 70.3 kicked off in Baku with 1,500+ athletes, while Sabah FC pledged AZN 10m for youth football development.

Azerbaijan–Armenia Trade: Azerbaijan shipped another 977 tonnes of diesel to Armenia by rail (16 wagons from Bilajari to Boyuk Kesik), adding to nearly 16,000 tonnes of diesel already exported, plus AI-92/AI-95 petrol deliveries. Energy & Markets: Azeri Light crude edged down to $104.20/bbl (FOB Ceyhan $101.05), still well above the 2026 budget benchmark of $65. Climate & Finance: Azerbaijan will host UN Climate Week and Baku Climate Action Week (Sept 7–11) at the Baku Convention Center, with a focus on climate finance and COP31 prep. Diplomacy & Peace Process: OSCE PA leaders met Azerbaijan’s top officials, discussing the Armenia-Azerbaijan peace process and humanitarian demining; Azerbaijan criticized the Minsk Group record. EU-Azerbaijan Climate Role: Azerbaijan’s representatives joined Türkiye’s Istanbul Climate Finance Summit, highlighting the “Baku Finance Goal” and sustainable cities agenda. Human Capital in Mining: AzerGold announced its next scholarship programme for 10 university students in mining-related majors, with a monthly 200 AZN stipend and internship opportunities. Sports & Tourism Pulse: IRONMAN 70.3 kicked off in Baku, with Croatian Matej Jukić winning the event.

Energy & Markets: Azeri Light crude slipped $0.78 (0.74%) to $104.20 a barrel on global markets. Climate & Policy: Azerbaijan will host UNFCCC’s 4th Climate Week in Baku from Sept 7-11, with sessions on climate finance, sustainable development and COP31 prep. Cybersecurity: OpenAI launched a $1bn program (“Daybreak for Frontline Defenders”) to protect essential government and public services from AI-assisted cyberattacks, including training with MS-ISAC. Transport & Trade: Transit traffic between Azerbaijan and Tajikistan rose 17% in Jan-Aug 2026, alongside faster trade and expanding digital services. Public Finance: Azerbaijan’s State Tax Service collected 12.6191bn manats in taxes in Jan-Aug 2026, beating the forecast by 900.1m manats. Business & Investment: S&P said SOCAR’s Comstock-related LNG push could improve Comstock’s credit profile and expand gas sales channels. Infrastructure & Cities: Baku will open a metro station named “20 September,” and August metro ridership topped 13m trips, with more payments via NFC/QR.

Energy & Markets: European gas prices ended the week higher, with Middle East tensions and Strait of Hormuz shipping worries pushing the Dutch TTF front-month October contract up to about €71/MWh. Oil & Gas Deals: S&P says a planned SOCAR partnership could help US Comstock expand LNG and global gas sales channels; SOCAR Georgia Petroleum also made its first direct petrol import shipment from Italiana Petroli after the acquisition. Transport & Infrastructure: Baku Metro recorded 13m+ passenger trips in August and is set to open a new “20 September” station in Nasimi district. Public Finance: Azerbaijan collected 12.6bn manats in taxes in Jan–Aug 2026, beating the forecast. Business & Investment: Metatek secured new airborne surveying contracts in Azerbaijan, including a major follow-on for SOCAR to expand hydrocarbon exploration coverage. Diplomacy & Trade: Meloni praised Aliyev and signalled expanded Italy-Azerbaijan cooperation beyond energy into trade, investment and connectivity; Bayramov met Sweden’s new ambassador to discuss EU ties and regional security. Society & Rights: Human rights groups again raised concerns over Armenian prisoners in Azerbaijan, including alleged isolation and medical neglect, with cases heading to the ECHR.