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ADQ and Azerbaijan invest in $1bn joint venture

By Andy Sambidge
Bilateral trade between the UAE and Azerbaijan stood at AED3.6 billion ($980m) in 2022 Wam
Bilateral trade between the UAE and Azerbaijan stood at AED3.6 billion ($980m) in 2022
  • Equal split in fund
  • Energy, tech, agriculture targeted

Abu Dhabi-based ADQ has announced a $1 billion joint venture with Azerbaijan’s sovereign wealth fund to invest in major sectors.

The JV with Azerbaijan Investment Holding will focus on agriculture, technology, pharmaceuticals and energy infrastructure.

Investments will primarily be concentrated in Azerbaijan, the UAE and Central Asia, with the potential to expand to other countries, a statement said.

The deal aims to boost bilateral trade between the UAE and Azerbaijan which stood at AED3.6 billion ($980 million) in 2022, an increase of 46 percent compared with the previous year.

ADQ and AIH will each hold a 50 percent interest, with both committing $500 million to the platform.

Mohamed Hassan Alsuwaidi, managing director and CEO of ADQ, said the fund “has the potential to unlock growth opportunities in sectors that play a key role in the development of target geographies”.

Mikayil Jabbarov, minister of economy of the Republic of Azerbaijan, added that it will serve as an “instrument of implementation” of joint projects aimed at long-term development of both countries and the wider region.

Separately, the UAE’s Ministry of Investment and Azerbaijan’s Ministry of Digital Development and Transport have signed a memorandum of understanding aimed at strengthening the digital infrastructure in Azerbaijan, with a focus on the development of data centres. 

Data centres provide a secure space for storing critical data and running applications and, under the MoU with the UAE, their number in Azerbaijan is expected to rise “significantly”. 

Azerbaijan, which will host Cop29, generates nearly half of its GDP from oil and gas and is in talks to join Opec, along with Malaysia, Brunei and Mexico.

The former Soviet republic currently exports oil and gas to neighbouring countries including Georgia, Turkey, Italy, Greece and Bulgaria.

Preliminary data for 2022 suggests oil products accounted for more than 92 percent of Azerbaijan’s total exports, but its trade relationship with the UAE is increasingly being driven by diversification away from crude.

According to Middle East Briefing, part of the Dezan Shira & Associates foreign investment practice, about 360 commercial organisations in Azerbaijan have benefited from UAE investments in agriculture, transport, construction, trade and services.

Azerbaijan wants to increase its installed power capacity from renewable sources to 30 percent by 2030. 

The government is looking to establish the country as a green energy producer and exporter.

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