Tashkent deepens investment ties with Baku: Key takeaways from Ilham Aliyev's visit

President of the Republic of Azerbaijan Ilham Aliyev paid a state visit to Uzbekistan on August 23–24, his seventh visit to the country over the past five years. This time, the agenda focused not only on political agreements but also on the practical expansion of investment cooperation.

Following the visit, the sides approved a new roadmap for bilateral relations, set a target of increasing bilateral trade turnover to $1 billion by 2030, and launched a number of projects involving Azerbaijani capital.

Tashkent also hosted the third meeting of the Supreme Intergovernmental Council of Azerbaijan and Uzbekistan, after which the sides signed a package of documents and took part in an online ceremony to inaugurate and lay the foundations for new projects.

From Agreements to Projects

Around ten facilities being implemented in Uzbekistan with Azerbaijani capital were inaugurated or had their foundations laid during the online ceremony. The projects span the banking sector, industry, energy, tourism and agriculture.

In particular, the International Bank of Azerbaijan (ABB) acquired a 51% stake in Davr Bank for $100 million. Other projects presented during the visit included a gypsum plant by Matanat-A, the development of the SOCAR network of filling stations, a residential and resort complex on the coast, a silver ore processing plant, and an agricultural project to establish fruit orchards.

Thus, the investment agenda between the two countries is gradually moving beyond individual agreements and taking on a broader project-based framework. Against this backdrop, particular importance is attached to a mechanism established specifically to support joint investments - the Azerbaijan-Uzbekistan Investment Company (AUIC).

AUIC as an Investment Cooperation Tool

One of the key instruments of bilateral investment cooperation remains the Azerbaijan-Uzbekistan Investment Company (AUIC), a joint fund with a charter capital of $500 million. Its purpose is to finance projects in Uzbekistan and Azerbaijan, thereby expanding direct investment cooperation between the two countries.

During the visit, Azerbaijani President Ilham Aliyev called the AUIC the "most effective and results-oriented" among similar cooperation mechanisms Azerbaijan has with other countries.

"Azerbaijan has this kind of cooperation format with different countries, but I would say that the Uzbek-Azerbaijani fund is the most effective and results-oriented," Ilham Aliyev said.

According to the president, around $160 million of the AUIC's $500 million capital has already been allocated to projects. Thus, the AUIC is not the sole source of capital, but rather one of the instruments within the broader investment agenda between the two countries.

How the AUIC Portfolio Is Taking Shape

The AUIC operates under a minority investment model, allowing it to acquire up to a 49% stake in a business. Individual deals range from $1 million to $25 million, while the target investment exit horizon is five to eight years. The fund focuses on healthcare, logistics, industry, food processing, fintech, IT, education and energy.

AUIC investments already span several sectors. Its portfolio includes investments in the American University of Technology in Tashkent, a joint project to localize equipment for data centers, and an investment in an Uzbek retail chain.

According to Sardor Khabibullayev, Deputy General Director of the AUIC, approved deals already account for about one-third of the fund's capital.

Approved deals cover about one-third of the fund's capital. The bulk of new projects is being formed at the intersection of sectors where the interests of the two economies most clearly converge - from industrial localization and logistics to digital infrastructure, education and retail.

Going forward, the company plans to increase its investment activity, carrying out up to 15 deals annually in Uzbekistan and Azerbaijan.