Azerbaijan needs to carry out institutional transformations in the financial sector. This was reported by FinFly.News citing the American consulting company Oliver Wyman.
According to the company's analysts, for the successful implementation of an infrastructure program worth USD 50-70 billion, Azerbaijan should establish the Baku International Financial Centre (Baku IFC), operating on the principles of English common law.
It is noted that Azerbaijan, possessing the most stable macroeconomic position among the countries of the region - an investment-grade sovereign credit rating ("BBB-" from Fitch Ratings), total reserves of the Central Bank and the State Oil Fund (SOFAZ) exceeding USD 85 billion (112% of GDP), as well as a low level of public debt within 20-21% of GDP - experiences a shortage of institutional competencies and an almost complete absence of international investment banks in the domestic market.
Oliver Wyman specialists emphasize that the implementation of strategically important projects - the restoration of Karabakh and Eastern Zangezur (USD 25-30 billion), the construction of the Zangezur corridor, the implementation of "green" energy transition initiatives (AZURE project, Black Sea Cable) and the development of logistics hubs - cannot be ensured solely through state budget funds or the resources of the local banking system. At the same time, Azerbaijan significantly lags behind its regional neighbors (Kazakhstan, Uzbekistan) in attracting non-budget capital: annual financing from international financial institutions (IFIs) in Azerbaijan reaches only USD 0.5-0.8 billion per year, while in Kazakhstan this figure is USD 2 billion, and in Uzbekistan - USD 2.5-3 billion.
According to the company's information, Azerbaijan's accumulated debt to export credit agencies (ECAs) equals USD 1.6 billion, while in Kazakhstan this indicator is in the range of USD 12-15 billion. In particular, of the GBP 5 billion limit provided by the UK Export Finance (UKEF), only 0.4% of the funds have actually been utilized.
In addition, the volume of attracted resources in the format of public-private partnerships and commercial project financing remains at an extremely low level. In order to overcome the institutional barrier and turn individual deals into a systematic mechanism for attracting capital, Oliver Wyman recommends Azerbaijan to take three key steps. The first is the formation of a specialized body for non-budget financing: to create a single specialized structure under the government that will be responsible for coordinating interaction with IFIs, ECAs, sovereign funds and ministries, as well as for maintaining a unified register of prepared projects. The Coordination Council for Cooperation with IFIs in Kazakhstan is cited as an example.
The second is proactive entry into international markets: to launch a pilot series of 2-3 deals with ECA guarantees of at least USD 200 million each (in the areas of transport and renewable energy) within the next 6-12 months to activate the work of foreign lenders.
The third is the creation of the Baku International Financial Centre. For this, Azerbaijan needs to form a special legal and regulatory zone based on English common law, with an independent judicial body, arbitration mechanism, preferential tax regime and special currency and visa status. As successful examples, the analysts named the Astana International Financial Centre (AIFC), operating since 2018, and the Tashkent International Financial Centre (TIFC), founded in Uzbekistan in March 2026.
Without the formation of such a legal enclave, Baku will continue to experience difficulties in attracting bankers, lawyers, financial architects and arbitrators necessary to transform fiscal potential into completed deals. The creation of Baku IFC is not an ambitious fantasy, however, since this approach has already become a regional norm among Azerbaijan's neighbors, its