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Assistance in Azerbaijan market

The Trade Council in Istanbul is also responsible for assisting the Danish companies to develop business in the Azerbaijan market. Below some key figures on the Azerbaijan market can be found. For further details or inquiries, please see the contact information on your right-hand.

 

General Information on the Azerbaijan Market

Azerbaijan is a republic and became an independent country in 1991. Azerbaijan is at the geographical crossroads of the Middle East, Europe and Asia – an element that is reflected in its political, economic, and commercial development.

At present Azerbaijan is a republic governed by a constitution that includes an executive, legislative and judicial branch. The real power is concentrated in the hands of executive branch which dominates over the other - legislative and judicial branches of power. The President and the National Assembly are elected by popular vote. The President appoints the Council (Cabinet) of Ministers, which is confirmed by the unicameral National Assembly (Milli Majlis).

Following a February 2003 referendum that accorded the President of Azerbaijan broader, in fact, unlimited powers, however, on June 28, 2005, the Azerbaijani Milli Majlis of Azerbaijan adopted an electoral law intended to assure fair elections. The law accorded opposition members one-third of the 18-seats on a new Election Commission.

In the 2008 presidential elections, Mr. Ilham Aliyev received over 88% of the votes and was re-elected for the second time.

The country has vast oil and gas resources from the Caspian Sea that are largely untapped and which have become attractive to other countries since its independence. The nation's rich petroleum resources are the backbone of its economy, which is one of the fastest-growing in the world—realizing 9.3% growth in 2009.


Energy Market of Azerbaijan

The Azerbaijan power system is the oldest and most developed in the southern Caucasus region. It has an installed generating capacity of about 7,100 MW, of which thermal power stations contribute appr. 6,100 MW and hydropower stations make up most of the balance. Currently, 80 percent of Azerbaijan’s generating power is located in the west. However, 70 percent of the power consumption is massed in the east (mainly in the area of Absheron Peninsula), north-east and south-east.

Because of Azerbaijan’s economic growth, the demand for electricity is expected to increase by 4.7% each year until 2015. Besides, over the past several years, there has been some interest in renewables other than hydropower, and a few studies have been performed.

Basic information about Azerbaijan and its energy sector is provided below:

Table 1. Azerbaijan Country Summary Tables

Demographical Information  

Population, millions (2009)     8.24   
Land area, thousand sq km (2009) 86.6

 

Macroeconomic Information (2008)    

GDP, billion US$    73.7
Real GDP growth rate, percent    11.6 
FDI (net), million US$ (2007)     5,103

 

Electricity disposition, billion kWh (2006)   

Generation     19.19 
Consumption 19.55
Exports  0.80
Imports 0.50

 

Generation capacity, GW (2005)  

Nuclear      0.00 
Thermal    4.19
Hydro     1.03
Other renewables    0.00
Total   5.22

Sources: CIA World Factbook, U.S. Energy Information Administration, United Nations Conference on Trade and Development.


Doing Business in Azerbaijan

The consistent growth in the Azerbaijan economy and the demand for energy as well as increasing interest in renewable energy creates possibilities for foreign companies to invest in the Azerbaijan energy market.

The country is one of the regional leaders not only in the overall economic growth but in direct foreign investments attraction as well. The 2005 UNCTAD Trade & Investment publication quotes Azerbaijan as the No 1 globally as per the FDI Inflow Performance Index. Foreign direct investments outside the oil & gas sector currently are mainly in construction, services, transport, telecom and manufacturing.

Complete reports on how to do business in Azerbaijan can be found in English on the search engines or at:

doingbusiness.org.

Links concerning both laws, regulations and taxes as well as the Azerbaijan investment promotion agency are attached below

Laws, regulations and taxes for Azerbaijan.

Investment promotion agency of Azerbaijan.