BAKU, Azerbaijan, February 1. International Finance Corporation (IFC) has signed a memorandum of understanding with Azerbaijan’s Alat Free Economic Zone (AFEZ) to create a framework for advisory and early-stage project development support for companies that would be interested in locating their operations in AFEZ, Trend reports via IFC.
IFC, in partnership with the Austrian Federal Ministry of Finance, and in collaboration with AFEZ Authority, will provide advice and support to AFEZ’s tenants. The purpose is to help companies identify and develop investment projects that focus on supporting the country’s net-zero transition and its climate-resilient development.
"AFEZ aims to deliver a unique environment for investors and is a key part of Azerbaijan’s goal to develop a knowledge-based, competitive economy, with modern energy, transport, and logistics infrastructure. Our cooperation with IFC will help us to support that aim, in line with best international standards," said Valeh Alasgarov, Chairman of the Board of the AFEZ Authority.
Located near the Baku International Sea Trade Port and transport corridors, AFEZ is the focal point of government efforts to attract and grow export-led value-added and manufacturing activity through an independent legal and regulatory framework, and by providing fiscal and non-fiscal incentives and infrastructure.
"Azerbaijan's economic growth over the past decades has largely been driven by its oil and gas sector. Now, major changes in the region’s geopolitics and energy systems as well as long-term strategic economic reform plans by the government are prompting the country to diversify its economy," said Rana Karadsheh, IFC's Regional Director for Europe, adding that IFC's partnership with AFEZ is "part of our efforts to support that process, helping the country remain competitive globally and ensuring a prosperous future for generations of Azerbaijanis".
Azerbaijan became a member state of IFC in 1995. Since then, IFC has invested around $500 million in the country, including $73 million through mobilization across sectors including financial services, infrastructure, and manufacturing. IFC has also supported around $100 million in trade through its trade finance program, provided $250 million for the Baku-Tbilisi-Ceyhan pipeline in 2004, and implemented several advisory projects to boost private sector growth.