Oliver Wyman: Azerbaijan needs to establish Baku International Financial Center

Azerbaijan needs to implement institutional reforms in its financial sector.

According to Olaylar citing US-based consulting firm Oliver Wyman, analysts believe that to successfully implement a $50-70 billion infrastructure program, Azerbaijan should establish the Baku International Financial Center (Baku IFC), operating under English common law principles.

The company noted that Azerbaijan, which has the strongest macroeconomic position among countries in the region - including an investment-grade sovereign credit rating ("BBB-" from Fitch Ratings), combined reserves of the Central Bank and the State Oil Fund of Azerbaijan (SOFAZ) exceeding $85 billion (112% of GDP), and a relatively low public debt level of 20-21% of GDP - faces a shortage of institutional expertise and an almost complete absence of international investment banks in the domestic market.

Oliver Wyman experts emphasized that strategically important projects - including the reconstruction of Karabakh and Eastern Zangazur ($25-30 billion), construction of the Zangazur Corridor, green energy transition initiatives such as the AZURE project and the Black Sea submarine cable, as well as the development of logistics hubs - cannot be financed solely through the state budget or local banking system.

At the same time, Azerbaijan significantly lags behind regional neighbors such as Kazakhstan and Uzbekistan in attracting non-budgetary capital. Annual financing from international financial institutions (IFIs) in Azerbaijan amounts to only $0.5-0.8 billion, compared with $2 billion in Kazakhstan and $2.5-3 billion in Uzbekistan.