President Aliyev places industry and innovation at centre of economic reform

Azerbaijan is taking decisive steps to reduce its traditional reliance on oil and gas revenues, recognising economic diversification as a cornerstone of sustainable and resilient growth. Over the past decade, the government has implemented a comprehensive strategy to strengthen non-oil industries, stimulate exports, foster innovation, and create stable employment opportunities. Central to this effort is the Entrepreneurship Development Fund (EDF), which provides preferential loans and targeted financial support to enterprises in priority sectors of the non-oil economy, enabling them to expand production, adopt modern technologies, and compete in international markets.

The significance of the non-oil sector is also reflected in the attention given by the head of state to the inauguration of new industrial facilities. Recently, President Ilham Aliyev participated in the opening of the AZWOOL mineral stone wool plant, operated by the Matanat-A company in the Garadagh district of Baku, one of several visits underscoring the government’s commitment to industrial diversification. When briefed, the President was informed that Matanat-A, which has been operating in the construction materials sector for 25 years, employs approximately 1,000 people across its enterprises. This highlights a key principle of Azerbaijan’s economic policy: sustainable growth and the creation of permanent jobs are essential components of a diversified, resilient economy.

Total project investment amounts to 43 million manats, of which 10 million manats were provided as a preferential loan by the Fund. The EDF plays a pivotal role in stimulating investment in Azerbaijan’s non-oil economy. Its mission encompasses financing the creation of new production facilities, processing and infrastructure enterprises, and innovative businesses, particularly those focused on export-oriented or import-substituting products. By providing soft loans, equipment financing, and guarantee-interest subsidy mechanisms, the Fund ensures that private sector initiatives align with national economic goals.

In 2024, the Fund successfully implemented its projected allocation of 200 million manats for soft loans and exceeded expectations by providing 248.1 million manats to finance 5,722 investment projects with a total value of 481.6 million manats. These projects created 4,334 new jobs, demonstrating the direct link between preferential financing and employment growth in non-oil sectors.

The EDF strategically distributes loans across sectors that have high potential to diversify the economy and expand exports. Agricultural production received the largest share of loans—132.2 million manats—reflecting the sector’s role in both domestic food security and export potential. Meanwhile, financing for the production and processing of industrial products, including agricultural goods, rose by 28.9% compared to 2023, signaling a deliberate push to strengthen manufacturing, processing, and industrial capacities.

In addition to agriculture and industry, the Fund supports a wide range of non-oil sectors, including green financing, digital development and innovation, tourism, medicine, education, logistics, aquaculture, and services. This broad approach ensures that economic growth is inclusive, technology-driven, and aligned with the country’s long-term development strategy.

One of the key outcomes of the Fund’s interventions is employment generation. By financing new enterprises and expansions, the Fund directly contributes to the creation of permanent jobs. The 2024 investment cycle alone demonstrates how financial support translates into tangible socio-economic benefits, improving livelihoods and stimulating regional development.

Beyond job creation, the EDF facilitates private sector participation in the economy. By lowering financial barriers and providing access to concessional credit, the Fund encourages entrepreneurs to invest in non-oil production, adopt modern technologies, and expand export-oriented operations. This approach strengthens the private sector as a driver of innovation, productivity, and economic resilience.

A significant focus of the Fund is on boosting the international competitiveness of Azerbaijani products. Enterprises supported by preferential loans are better positioned to meet international quality standards, expand production capacity, and access foreign markets. This strategy aligns with initiatives such as the “Made in Azerbaijan” brand, which promotes Azerbaijani non-oil products abroad through exhibitions, marketing campaigns, and state-supported retail channels.

By linking financial support to export-oriented growth, the Fund contributes directly to reducing Azerbaijan’s reliance on oil exports, increasing foreign exchange earnings, and integrating the country more deeply into global supply chains.

The Entrepreneurship Development Fund exemplifies how targeted financial policy can catalyze structural transformation in a resource-dependent economy. Preferential financing encourages entrepreneurship, accelerates industrialization, and stimulates the production of innovative, high-quality goods. By focusing on export-oriented and import-substituting enterprises, the Fund ensures that economic growth is both sustainable and globally competitive.

Moreover, the Fund’s approach aligns with broader government priorities, including job creation, regional development, technology adoption, and environmental sustainability. This integrated strategy demonstrates that financial support is not just about lending; it is about building the foundations of a diversified, resilient, and knowledge-driven economy.

Azerbaijan’s non-oil sector is entering a phase of accelerated growth, driven by strategic public-private collaboration and the targeted support of the Entrepreneurship Development Fund. Through concessional loans, investment promotion measures, and sector-specific programs, the Fund enables enterprises to expand production, enhance export competitiveness, and create jobs. These efforts are transforming the economic landscape, reducing the country’s dependency on oil, and positioning Azerbaijan as a competitive player in global markets. The EDF’s role underscores the importance of smart financial intervention in fostering sustainable economic diversification and long-term prosperity.