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Azerbaijan

Overview

Azerbaijan strategy

Focus Areas

Country data

Population:: 8.8 million
Area:: 86, 600 sq km
Capital:: Baku
Currency:: Manat

Key developments and challenges

The key challenge for Azerbaijan is to diversify its economy as the recent oil production boom is coming to a close. The economic crisis underscored the vulnerability of the economy to fluctuations in commodity prices as the terms of trade deteriorated sharply. To increase non-oil exports, it will be necessary to improve the business environment, encourage competition and attract more foreign strategic investors.

Although the financial sector has weathered the crisis well, it requires significant reforms. The banking sector is dominated by a large state bank, but with many small private banks it remains fragmented and inefficient. Reforms should promote consolidation and modernisation through increased competition.

Over the medium term the authorities will need to implement a programme of fiscal consolidation to reduce the reliance on oil revenues and to ensure that the accumulated oil wealth is used effectively.

More developments and challenges

Our work in Azerbaijan

In Azerbaijan we invest in the enterprise, financial and infrastructure sectors to promote rapid and sustainable growth

Azerbaijan

Key facts about the EBRD's work in Azerbaijan

No. of projects	117
Net business volume	€1.5 billion
Total project value	€6.6 billion
Gross disbursements	€1.0 billion
Portfolio in private sector	43%

View factsheet

Our strategy in Azerbaijan

To help speed up reforms and address some of the challenges facing Azerbaijan, the EBRD’s activities there will focus on three main areas: industry, commerce and agribusiness, finance and energy and infrastructure.

To build up a more attractive investment environment, private sector development in Azerbaijan will be supported.

Priority areas include increasing investments in the country’s non-oil sector, funding financial sector development and support for small business entrepreneurs.

The Bank will also seek to engage with other international financial institutions and the business community in policy dialogue with the authorities, in order to implement reforms and improve the investment climate.

These will include investment climate issues, mobilising donor financing in support of the preparation and implementation of projects, advisory support, institution building and legal transition work.

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