Azerbaijan.US
China’s direct foreign investment (FDI) in Azerbaijan exceeded $400 million by the end of the first half of 2025, reaching $405 million, according to a report by the Eurasian Development Bank (EDB).
The figure marks a steady rise from $259 million recorded at the beginning of 2017. EDB data show that average annual growth of Chinese investment in Azerbaijan stood at 4.8% in 2016, accelerating to around 9.7% from 2022 onward.
The bank notes that the manufacturing sector remains the key driver of China’s investment portfolio in Azerbaijan, accounting for 88% of total FDI, or $355 million as of the end of the first half of 2025. Investment volumes in manufacturing have increased almost 40-fold compared with 2016 levels.
At the same time, projects worth about $50 million, or 12.3% of the portfolio, have emerged in the energy sector. Among them is a 100-MW solar power plant being built in the Gobustan district by Universal Energy through its joint venture Universal Solar Azerbaijan. The project, valued at $100 million, was awarded following a tender held in November 2024, with construction launched in 2025.
In parallel, China Datang Overseas is developing a project to build a 100-MW solar power plant with a 30-MW battery energy storage system near Lake Boyukshor. The investment agreement was signed in April 2025.
According to the EDB, both projects align with Azerbaijan’s strategy to expand green electricity exports and reinforce the role of Chinese companies as key technological partners in the renewable energy sector.
Industrial cooperation also includes a joint project between BYD and Electrify Azerbaijan to establish an electric bus manufacturing facility in Sumgayit. Initial investment amounts to $17 million, with total funding expected to rise to $60–94 million as production expands. The project aims to modernize urban bus fleets through local production and support the gradual electrification of public transport.
In addition, a Chinese private investor is launching the Fujiai Azerbaijan plant in the Aghdam Industrial Park to manufacture elevators and escalators, with expected investment of $2 million.
The EDB emphasizes that all projects are financed primarily through investors’ own funds, without direct budgetary support from China.
Separately, the bank reports that from 2008 through the third quarter of 2025, the total volume of approved non-sovereign operations by international financial institutions in Azerbaijan reached $2.671 billion. Of this amount, $61.7 million was allocated in 2025, with the remainder disbursed between 2008 and 2024. Over the period, 110 projects were implemented, 51 of which remain active.
The largest investors in Azerbaijan during this time were the European Bank for Reconstruction and Development ($875.3 million), the Asian Development Bank ($790.5 million), and the Black Sea Trade and Development Bank ($278.9 million). Other active institutions include the International Finance Corporation ($209 million), the Asian Infrastructure Investment Bank ($170 million), the European Investment Bank ($119.2 million), the Islamic Corporation for the Development of the Private Sector ($116.2 million), and the OPEC Fund ($111.9 million).
The main areas of financing were the financial sector ($973.4 million), industry ($894.8 million), and renewable energy ($675.4 million). As a result, Azerbaijan’s average annual financing volume increased 2.6-fold, rising from $108 million in 2008–2010 to $280 million in 2022–2024.
