In a significant step toward deepening economic and strategic ties, Azerbaijan is working to transform its growing partnership with Saudi Arabia into tangible investment initiatives.At the forefront of this effort is a proposal to establish a joint sovereign investment fund that would support priority sectors in both countries and finance joint ventures in third markets. The plan, revealed by Azerbaijani Ambassador to Saudi Arabia Shahin Abdullayev in an interview with Asharq Al-Awsat, reflects Baku’s intention to build on the momentum of recent high-level engagements and turn bilateral cooperation into long-term, shared economic value.
The proposed fund comes in the wake of the 8th Saudi-Azerbaijani Joint Government Committee meeting held in Riyadh in April, co-chaired by Saudi Investment Minister Khalid Al-Falih and Azerbaijani Deputy Prime Minister Samir Sharifov.
The talks resulted in several memorandums of understanding covering energy, transport, logistics, and water, as well as endorsement of recommendations from the 6th Saudi-Azerbaijani Business Council.
Abdullayev highlighted the rapid growth in ties between Baku and Riyadh across multiple sectors, especially energy, investment, tourism, and culture. He praised Saudi-based ACWA Power for its role as a leading investor in Azerbaijan’s renewable energy sector.
In 2024, both countries signed a joint executive program during COP29 in Baku, aimed at strengthening cooperation in renewable energy development and transfer. The agreement was signed in the presence of Saudi Energy Minister Prince Abdulaziz bin Salman and Azerbaijani President Ilham Aliyev. It includes large-scale wind power projects with a combined capacity of 2.5 gigawatts, along with battery-based energy storage systems.
The ambassador noted that Azerbaijani Economy Minister Mikayil Jabbarov proposed the creation of a joint sovereign wealth fund during a visit to Riyadh in December 2024. The fund would target priority sectors outlined in both countries’ economic agendas and invest in third countries as well.
Abdullayev underscored the importance of finalizing an investment protection agreement between the two nations, along with offering incentives to encourage Saudi investors to explore opportunities in Azerbaijan’s free economic zones. Areas of cooperation under discussion include oil, renewables, industry, tourism, infrastructure, agriculture, livestock, and mining.
Tourism is another bright spot in the growing partnership. More than 100,000 Saudi tourists visited Azerbaijan in 2024, up over 31% from the previous year. The ambassador expects further growth through the development of joint tourism programs, sustainable tourism initiatives, and shared exhibitions and events.
Azerbaijan also plays a vital regional role in energy security through its major pipeline projects, including the Baku-Tbilisi-Ceyhan oil pipeline and the TANAP and TAP natural gas lines, which serve European markets.
The ambassador highlighted Baku’s successful bid to host COP29 as a sign of Azerbaijan’s growing global presence. The conference resulted in a pledge urging developed nations to allocate $300 billion annually by 2035 to help developing countries mitigate climate change impacts.
He also praised Saudi Arabia’s humanitarian support, particularly through the King Salman Humanitarian Aid and Relief Center, which signed a demining agreement in January 2024 to assist in clearing liberated areas in Azerbaijan, a step that has helped accelerate reconstruction and enable safe civilian return to their homes.
