Azerbaijan and the IsDB Sign a $6 Billion Agreement
Azerbaijan and the Islamic Development Bank (IsDB) agreed to a new strategic partnership and several financing agreements during the Bank’s 51st Annual Meeting in Baku. A total of 67 contracts with a combined value of 6 billion U.S. dollars were signed during the meeting.
Economy Minister Mikayil Jabbarov stated that Azerbaijan intends to further deepen its cooperation with the Jeddah-based development bank and channel new investments into strategic economic sectors.
IsDB Group President Muhammad Al Jasser announced at the closing conference that, in addition to the signed agreements, the bank group had approved an additional $2.8 billion in financing for nine transformation projects in member countries. The projects focus on improving connectivity, energy security, food systems, and climate resilience.
New Partnership Strategy Through 2031
According to Jabbarov, Azerbaijan is currently implementing eleven projects with the IsDB, with a total value of 640 million US dollars. Since the country joined the bank, its capital share has risen from an initial 0.1% to 1%.
Since the early years of Azerbaijan’s independence, the IsDB has financed a total of 84 projects worth approximately 1.8 billion US dollars. These projects span sectors such as infrastructure, agriculture, energy, water management, transportation, and financial services.
During the annual meeting, both sides also agreed on a new partnership strategy for the period from 2027 to 2031. It is aligned with Azerbaijan’s development program “2030: National Priorities for Socioeconomic Development” as well as the IsDB Group’s ten-year plan for 2026–2035.
Key priorities include economic diversification, investment in human capital, sustainable infrastructure, and the strengthening of regional transportation and trade links.
Focus on Water Management and Infrastructure
Among the most important ongoing projects are initiatives in the areas of water supply, irrigation, railway infrastructure, and agriculture. Particular emphasis is placed on the territories recaptured by Azerbaijan and on the Alat Free Economic Zone.
Al Jasser referred to a new financing agreement worth $436 million to modernize the Karabakh Main Irrigation Canal. In addition, a memorandum of understanding was signed for a comprehensive cooperation program with Azerbaijan.
Another memorandum concerns the construction of water and wastewater systems for 33 settlements on the Absheron Peninsula.
Jabbarov also highlighted cooperation with the Arab Coordination Group. Together with institutions such as the OPEC Fund for International Development, the Saudi Arabian Development Fund, the Kuwait Fund for Arab Economic Development, and the Abu Dhabi Development Fund, projects worth billions are being advanced in the areas of transportation, railways, and water supply.
Investments in Non-Oil Sectors
With regard to the investment environment, Jabbarov emphasized political stability, sound macroeconomic development, and Azerbaijan’s strategic location as key locational advantages.
According to the minister, priority investment areas include the non-oil industry, mining and critical raw materials, agriculture and agricultural processing, transportation and logistics, renewable energy, financial services, and digital transformation.
This year’s event marked the second time since 2010 that Baku has hosted the IsDB Group’s annual meeting. Al Jasser described the meeting as an important milestone in the implementation of the bank’s new strategic framework for the period 2026 to 2035.
