Overview

Azerbaijan is positioning itself as a logistics hub for East-West trade in the region through major infrastructure investments.  The completion of the Baku-Tbilisi-Kars railway and the Alat Port could create a potential transit route for trade between East, Central, and South Asia and Europe.  Azerbaijan has also vastly expanded its air cargo facilities with cold storage and a modern general cargo terminal at the Heydar Aliyev International Airport in Baku.  These air cargo facilities will complement Azerbaijan’s investments in road, port, and rail infrastructure.

The Baku-Tbilisi-Kars railway links the Soviet-era rail systems of Azerbaijan and Georgia to that of Turkey and eventually the rest of Europe.  Azerbaijan is also building a North-South transport corridor with Iran and Russia. 

Azerbaijan has constructed a new Caspian Sea port at Alat, southwest of Baku.  Alat is situated at a rail and road hub, allowing for multimodal north-south and east-west transit and can accommodate rail ferries that transport up to 52 train cars at a time.  A free trade zone adjacent to the port will offer companies tax and customs exemptions, encouraging value added processing and transit through Azerbaijan.  4.8 million tons (excluding oil) of cargo were handled at the Alat Port in 2020.

The groundbreaking ceremony for the Alat Free Economic Zone (AFEZ), located 40 miles south of capital Baku, next to the International Trade Seaport, occurred on July 1, 2021.  The zone, covering an area of 850 hectares, will serve to develop Azerbaijan’s non-oil sector exports by attracting foreign investors and new technologies.   AFEZ is the focal point for the Government of Azerbaijan’s efforts to attract and grow value-added manufacturing activity.  AFEZ has unique government-approved legislation, which allows it to offer a range of incentives and advantages that are not available to any other location in the country, including exemptions from taxes and customs duties, as well as a self-regulated arbitration process.  The government also established a new Alat Free Economic Zone Authority (AFEZA), which is responsible for all aspects of promotion, client facilitation, approvals, licensing, and client development.  AFEZ is expected to open to investors in summer 2022.

Leading Sub-Sectors

Freight forwarders, logistics/supply chain developers, and managers may find opportunities as Azerbaijan continues investing in logistics infrastructure. 

Opportunities

Suppliers of aircraft, rail wagons, locomotives, transport equipment, construction equipment, and materials or international transportation companies may find opportunities in the transportation sector, especially as links across the Caspian and into Turkey have already been built.

Resources

• Ministry of Transportation, Communication, and High Technologies:
  https://www.cbar.az/home?language=en
• Port of Baku and Port Alat:  http://portofbaku.com/en/