BAKU, July 21 — The State Oil Fund of Azerbaijan (SOFAZ) ended the 2024 fiscal year with a net profit of 7.86 billion manats (approximately $4.6 billion), marking a 3% decrease from 2023, according to the fund’s newly released financial report.
Despite the slight overall dip, SOFAZ’s performance remained robust, bolstered by strong returns on gold and private equity investments.
Key Investment Returns
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Bonds: 680.2 million manats — down 4.5 times from 2023
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Equities: 3.21 billion manats — an 11% decline
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Gold: 3.39 billion manats — up 2.5 times from the previous year
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Private equity funds: 377.8 million manats — up 27.7%
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Real estate: 32.3 million manats — a full recovery from the previous year’s losses
SOFAZ’s diversification strategy appears to be paying off, particularly with its gold holdings and private equity placements serving as reliable buffers amid volatile global markets. The decline in bond and stock market revenues reflects broader trends in interest rates and equity performance during the year.
Asset Growth and Financial Stability
As of January 1, 2025:
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Total assets: 102.6 billion manats — up 7.2%
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Liabilities: 423.7 million manats — down 7.4%
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Net capital: 102.2 billion manats — up 7.2%
These figures reaffirm SOFAZ’s status as one of the region’s most significant sovereign wealth funds, maintaining both asset growth and financial resilience amid global uncertainties.
Background
SOFAZ was established by presidential decree on December 29, 1999, to ensure long-term management of Azerbaijan’s oil and gas revenues for the benefit of both current and future generations. The fund plays a crucial role in stabilizing the national economy, funding strategic projects, and supporting macroeconomic balance.
A Critical Look
While SOFAZ’s financial health remains solid, critics argue that the Azerbaijani public sees limited direct benefits from the fund’s growing wealth, especially in areas such as housing, healthcare, and education. Furthermore, the sharp drop in bond revenues may raise questions about the fund’s exposure to low-yield assets in a changing interest rate environment.
Calls for greater transparency and clearer public accountability continue to grow, with civil society groups pushing for more detailed reporting on how profits are reinvested domestically and how future generations will benefit from this strategic reserve.
Nevertheless, SOFAZ’s 2024 report reflects competent fund management, reinforcing Azerbaijan’s fiscal position at a time when many resource-rich nations are struggling to balance social needs with long-term financial planning.
