Longstanding ADB-Azerbaijan partnership powers economic diversification

Azerbaijan’s resolute intention to diversify its economy away from hydrocarbons and foster sustainable growth is receiving robust support from the Asian Development Bank (ADB), reflecting a long-standing and trusted partnership between the two. For decades, ADB has been a vital ally in Azerbaijan’s economic development, and today, its efforts align closely with the country’s strategic priorities — particularly in promoting small and medium-sized enterprises (SMEs) and advancing the green economy.

At the heart of Azerbaijan’s national agenda is the vision outlined in the “Azerbaijan 2030: National Priorities for Socio-Economic Development,” which positions SMEs as a key driver of inclusive growth and employment diversification. This vision mirrors ADB’s commitment to nurturing SMEs as essential pillars of resilient economies throughout Asia.

These initiatives are particularly important for fostering balanced regional development beyond the capital, unlocking untapped potential across Azerbaijan.

The focus on SMEs is strategic and forward-looking. Globally, SMEs represent over 90% of businesses and are the largest source of employment. In Azerbaijan, empowering these enterprises within the green economy not only supports climate commitments but also enhances competitiveness by encouraging resource efficiency, access to green finance, and compliance with international standards.

However, SMEs often face barriers such as limited access to technology and capital, and gaps in knowledge regarding environmental regulations. ADB’s comprehensive support model — integrating finance, capacity building, and policy engagement — effectively addresses these challenges, maximizing the impact of interventions.

The trust built over years between Azerbaijan and ADB ensures that these initiatives are well-tailored to the country’s unique socio-economic landscape, promising sustainable outcomes that extend beyond short-term gains.

As Azerbaijan accelerates its economic diversification and green transition, the synergy between national priorities and ADB’s support creates a powerful foundation for sustainable growth. By empowering SMEs and fostering innovation, Azerbaijan is charting a resilient and inclusive economic future, while contributing to global environmental goals. This enduring partnership signals confidence in Azerbaijan’s potential as a regional leader in sustainable development.

A trusted partnership driving green growth - Sunniya Durrani-Jamal, Director of ADB’s Azerbaijan office, highlighted this synergy during her address at the “Halal Business Forum.” “Our collaboration with the Azerbaijani government, especially the Ministry of Economy and the Small and Medium Enterprises Development Agency (SMBDA), focuses on expanding the private sector and supporting SMEs, which we see as fundamental to both economic vitality and environmental sustainability,” she explained.

With a dedicated local team and a strategic approach that goes beyond financing, ADB is investing in building business capacity, promoting sustainable practices, and facilitating innovation. This holistic strategy is designed to empower SMEs to thrive, generate employment, and foster long-term community well-being.

SMEs in Azerbaijan are increasingly recognized as drivers of the country’s green transition. The Baku Climate Coalition, initiated under the framework of COP29 with ADB’s active involvement, underlines the importance of SMEs in adopting environmentally sustainable business models. The coalition’s declaration prioritizes strengthening SME capabilities and stimulating demand for green solutions, signaling a new phase in Azerbaijan’s climate action.

The Small and Medium Enterprises Development Agency (SMBDA) plays a crucial role by championing alternative energy projects and supporting businesses engaged in recycling and circular economy practices. By promoting SME participation in local and international platforms, SMBDA helps unlock new growth opportunities and markets for these enterprises.

ADB’s country partnership strategy for 2025-2029 further reinforces Azerbaijan’s economic diversification goals by channeling investments toward non-oil sectors such as agriculture, services, and SMEs. This approach aims to build economic resilience, stimulate new job creation, and enhance innovation through digital transformation and skill development.