Azerbaijan wants $5 billion infrastructure loan for newly controlled territories

Azerbaijan wants to borrow $5 billion from international credit institutions in the coming years for large infrastructure projects, including in territories secured in a lightning military offensive in September, the finance minister told Reuters.

Azerbaijani forces regained control of the mountainous region of Nagorno-Karabakh, where ethnic Armenians had enjoyed de facto independence for decades, prompting at least 100,000 ethnic Armenians to flee.

“Very big tasks stand before us,” Finance Minister Samir Sharifov said in an interview. He said the tasks in question were linked with the reconstruction and restoration of land now under Azerbaijan’s control, something that would also boost the country’s economic growth.

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Peace talks between Baku and Yerevan are ongoing, with the two sides continuing negotiations on the demarcation of their 1,000 km (620 mile) border, which remains closed and heavily militarised.

“There are a number of large projects in the transport infrastructure field, that could be financed through attracting borrowed resources,” Sharifov said. “Overall, we are talking about additional borrowing of $5 billion.”

Azerbaijan’s public debt stood at $6.1 billion at the start of 2024. Sharifov said Baku would repay $1.4 billion of this by the end of the year and then ultimately plans to increase public debt to $10 billion.

“We will not issue Eurobonds. Most likely it will be project financing,” Sharifov said, listing the World Bank, the European Bank for Reconstruction and Development, the Asian Infrastructure Investment Bank, and the Islamic Development Bank among the possible sources of funds.

He said the financing would likely come over the course of four to five years.

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