EBRD: Azerbaijan needs to strengthen institutional framework to attract private investment

Azerbaijan needs to strengthen its institutional framework to attract private investment, Real Hajiyev, Deputy Director of the European Bank for Reconstruction and Development (EBRD) in Azerbaijan, said, according to Report.

Speaking at the Germany-Azerbaijan Connectivity Conference in Baku, held under the theme Mobilizing Finance for Infrastructure, Transport, Logistics, Green Energy and Digitalization Along the Middle Corridor, Hajiyev noted that Azerbaijan already benefits from a highly stable regulatory environment and a strong fiscal position.

"These components are already in place. What is missing is the institutional framework needed to attract and incentivize private investment in projects, as well as the resources and fundamental elements required to prepare projects that meet international investors' expectations," he said.

The official explained that Azerbaijani projects typically rely on traditional Engineering, Procurement and Construction (EPC) contract models, particularly for large-scale developments. However, alternative mechanisms, including Public-Private Partnerships (PPPs), offer various options and structures that can help attract investors.

According to him, while many projects are technically sound, risks must be appropriately shared among stakeholders.

Regarding the role of multilateral development banks (MDBs), Hajiyev said institutions such as the EBRD work with governments to address institutional gaps, provide expertise, and develop alternative approaches for project identification, preparation, and delivery.

"At the project level, through technical assistance funds and our own resources, we help prepare investment projects so that when they are ready, private investors, lenders, and equity investors are also prepared to invest in them," he added.