Azerbaijan's investments in Ukraine may reach $1.5bn-$2bn in 2020, marking a ten-fold increase, Baku's ambassador to Kyiv Azer Khudiyev told news agency Ukrinform this week.
Report informs, citing bne IntelliNews, that he said if the investments go ahead, it will almost double the level of FDI going into Ukraine in 2020.
"We want to raise this level [of investment] up to $1.5-2bn overall. And now we intend to do this through our two trading houses - these are good sites, and good economic opportunities, where business circles of Ukraine and Azerbaijan gather and discuss necessary and concrete things," the ambassador said.
According to bne IntelliNews correspondent in Eastern Europe, Azerbaijan's FDI in Ukraine stood just at $210mn in 2019, and $216mn in 2017.
The total FDI into Ukraine in 2019 was an estimated $2.5bn, slightly ahead of the $2.4bn invested the year before.
Timofei Milovanov, Ukraine's Minister of Economic Development, Trade and Agriculture, said in February that the government hopes to increase FDI in 2020 to $5bn.
The Azerbaijani ambassador also said that agreements had already been reached between Ukrainian partners "on more joint ventures established in one or another territory."
"We have intentions to invest here. So in this regard, I have recently talked to our economy minister. He will do the Ukraine-Belarus-Moldova tour soon. Our president gave an instruction to strengthen our economic positions in this region." In November, Russia's telecom operator MTS signed an agreement with Telco Solutions and Investments, which is owned by Azerbaijan's Bakcell telecom company, on the sale of MTS operations in Ukraine - Vodafone Ukraine - for $734mn, including deferred payments of about $84mn. Bakcell telecom company is incorporated in NEQSOL Holding.
Azerbaijan's investment in Ukraine could be strategically significant. AS bne IntelliNews argued in a piece "Azerbaijan, Georgia, and Turkey build a golden triangle of mutual investment" that western investment into the former Soviet Union (FSU) countries has disappointed over the last three decades. It said that most countries chose to profiteer from opening up these markets and boosting trade. However, that trade has been followed with relatively little FDI, with some exceptions like the carmaking business.
Instead of western FDI, increasingly smaller regional blocks have formed with the triangle of Azerbaijan, Georgia, and Turkey standing out as one of the most actively developing. Adding Ukraine to this block would significantly boost the size of the potential market and its clout.
Ukraine would also be a big winner as Turkey, in particular, is in a position to provide significant financing and direct investment into multiple sectors.