China's FDI in Azerbaijan exceeded $400M by June 2025

China's accumulated foreign direct investment (FDI) in Azerbaijan at the end of the first half of 2025 are evaluated at $405 million, up from $259 million at the beginning of 2017, Report informs referring to the Eurasian Development Bank (EDB).

The average annual growth of Chinese investment in Azerbaijan was 4.8% in 2016 and almost 9.7% since 2022.

The bank notes that the key driver of the portfolio is the manufacturing industry, which accounts for 88% of China's FDI stock in Azerbaijan ($355 million at the end of the first half of 2025). Investment in the sector has grown almost 40-fold compared to 2016.

Projects in the energy sector have also emerged, totaling $50 million (12.3% of the portfolio). In the electric power sector, Universal Energy is building a 100 MW solar power plant in the Gobustan region through the Universal Solar Azerbaijan joint venture. The investment volume is estimated at $100 million. The project was awarded through an auction in November 2024, and construction began in 2025, reads the update.

In parallel, China Datang Overseas is preparing a project to build a 100 MW solar power plant (SPP) with a 30 MW storage system near Lake Boyukshor. The investment agreement was signed in April 2025.

Both projects fit into Azerbaijan's strategy to increase green electricity exports and cement the position of Chinese companies as key technology partners in the renewable energy sector, according to the update.

Furthermore, industrial projects include the establishment of an electric bus assembly plant in Sumgait by BYD, in partnership with Electrify Azerbaijan. The initial investment is $17 million, with a subsequent increase to $60-94 million as production expands.

The project aims to upgrade the city's bus fleet through local production and the gradual electrification of public transport, the EDB notes.

In the Agdam Industrial Park, a private Chinese investor is launching a Fujiai Azerbaijan plant for the production of elevators and escalators with a planned investment of $2 million.

All projects are financed primarily by the investors' own funds, without direct budget support from China, the EDB notes.

According to the Eurasian Development Bank (EDB), China's accumulated foreign direct investment in the South Caucasus countries has increased 2.5-fold over the past 10 years, from $284 million to $690 million. The investment portfolio is divided between Azerbaijan (approximately 60%) and Georgia (approximately 40%). Priority areas include manufacturing and energy.

In the first half of 2025, China launched 25 new projects with a total accumulated investment of $873 million. As a result, the total number of projects increased from 171 in 2023 to 213 by mid-2025. Notably, all new projects in 2025 are being implemented in Central Asian countries (23 projects) and Azerbaijan (2 projects), reads the update.

Since 2008 and as of the end of the third quarter of 2025, the volume of approved non-sovereign operations by international financial institutions in Azerbaijan amounted to $2.671 billion.

Some $61.7 million is allocated for 2025, with the remainder allocated between 2008 and 2024. During this period, 110 projects were implemented, of which 51 remain active.

The largest investors are the EBRD with $875.3 million, ADB with $790.5 million, and the Black Sea Trade and Development Bank with $278.9 million.

Other active institutions include the IFC with $209 million, the AIIB with $170 million, the EIB with $119.2 million, the ICD with $116.2 million, and the OPEC Fund with $111.9 million.

The most significant funding areas include the financial sector with $973.4 million and industry with $894.8 million. dollars, and renewable energy sources – $675.4 million.

The average annual funding volume in Azerbaijan increased 2.6-fold, from $108 million in 2008-2010 to $280 million in 2022-2024.