Javid Mustafayev, executive director of investment agency InvestBaku, explains how the Azerbaijan capital is aiming to become a global exemplar for sustainability and urban renewal.

Congratulations on the selection of Baku as host city for COP29. How important is this to the city and its aspirations? What can Baku itself add to the global sustainability imperative?

Thank you for the congratulations. Hosting COP29 is a monumental occasion for Baku, particularly as 2024 has been declared the Year of Solidarity for the Green World in Azerbaijan. It’s important to note that COP29 is not the first international eco-event hosted by our nation.

Baku has been the venue for a series of international events, including, in 2016, the UN’s 7th International Forum on Energy for Sustainable Development. This history of hosting major international events underscores our capacity and readiness to facilitate global discussions on critical issues.

Hosting COP29 aligns perfectly with both our city’s aspirations and the broader objectives of our country and businesses towards a sustainable future, marking a pivotal moment in our journey towards environmental stewardship and global collaboration. It provides a unique platform to showcase our advancements in renewable energy, green technology, and sustainable urban planning. This aligns with our vision to transform Baku into a leading example of eco-friendly urban living, and demonstrates our resolve to contribute actively to global sustainability efforts.

Azerbaijan has been investing significantly in renewable energy sources, such as wind and solar power, with the aim of increasing the share of renewables in our energy mix. This experience positions Baku as a living laboratory for renewable energy initiatives, green urban planning, and sustainable development practices. We can share valuable insights and lessons learned with the global community, contributing to the collective search for scalable and effective climate solutions.

Baku’s hosting of COP29 is not just an honour, it’s a call to action. It is an opportunity for us to contribute to the global sustainability imperative, share our successes and challenges, and learn from the global community. We are committed to making COP29 a milestone event that not only advances the global climate agenda, but also catalyses more ambitious action and cooperation among nations.

What sustainability initiatives from the city can you highlight?

Our commitment is guided by a strategic framework, notably the Baku City Master Plan for 2040, developed with the expertise of AS+P Albert Speer + Partner. This plan aligns with the global sustainability goals and addresses our unique urban and environmental challenges.

Central to our initiatives is the dedication to a green economy, as emphasised in Azerbaijan 2030: National Priorities for Socio-Economic Development, a document that underscores the importance of a clean environment and green growth. It advocates for the adoption of environmentally-friendly technologies, the promotion of waste recycling, and the expansion of green technologies.

Recent foreign investments have been pivotal, driving forward projects that demonstrate Baku’s investment potential and underscore our commitment to sustainable energy and environmental stewardship.

“Baku’s commitment to renewable energy sources offers fertile ground for investments in solar, wind and hydroelectric power projects.”

Javid Mustafayev, InvestBaku

The investments include the 230MW Garadagh Solar Power Plant, led by Abu Dhabi’s Masdar; Saudi Arabia’s ACWA Power’s 240MW Khizi-Absheron Wind Power Plant; and a framework agreement with Australia’s Fortescue Future Industries.

In essence, our approach to sustainability in Baku is multi-faceted, focusing on ecological preservation, sustainable infrastructure development, and the promotion of green energy, all while fostering economic growth and enhancing the quality of life for our residents.

Through these efforts, Baku is setting a benchmark for sustainable urban development.

What are the main opportunities that Baku currently offers foreign direct investors?

Baku is rapidly emerging as a vibrant centre for foreign direct investment, with its strategic initiatives in green energy projects, untapped tourism potential, and comprehensive real estate development plans under the City Master Plan 2040. The city’s commitment to renewable energy sources offers fertile ground for investments in solar, wind and hydroelectric power projects, capitalising on its favourable climatic conditions and strategic location.

In addition, Baku’s rich cultural heritage and unique positioning as a crossroad of Eastern and Western influences reveal a vast, yet underexplored, tourism sector ripe for development in luxury accommodations, cultural experiences, and eco-tourism initiatives.

Furthermore, the foresight of the Master Plan 2040 paves the way for sustainable urban growth, presenting myriad opportunities in residential, commercial and mixed-use developments that incorporate green spaces, smart city solutions, and public amenities, aligning with global trends towards sustainability and innovation.

In conclusion, Baku stands out as a dynamic investment destination, offering diverse opportunities in sectors poised for significant growth. As an investment advisory firm, InvestBaku is at the forefront of identifying and sharing these trending opportunities with interested parties. We’re committed to guiding investors through the myriad possibilities Baku offers, ensuring they can capitalise on the city’s growth trajectory and contribute to its sustainable development. Our doors are always open to provide insights and facilitate connections for those looking to explore Baku’s emerging investment landscape.

Are there any significant real estate or urban development projects you can tell us about?

Baku’s rapid growth is not only reshaping its skyline, but also offering a wealth of opportunities for investors, particularly in the realm of real estate and urban development. The city’s development trajectory is marked by an increasing focus on eco-friendly and energy-efficient housing solutions, reflecting a broader commitment to sustainability. Our local partner, Kraft Energy, is at the forefront of this movement, contributing to the development of green buildings that promise a smaller environmental footprint and enhanced living standards.

The real estate sector in Baku is one of the most attractive areas for investment, driven by the city’s rapid urbanisation and a burgeoning interest from tourists. This surge in demand has made real estate investment exceptionally lucrative, with annual growth in real estate prices reaching up to 20%.

The rental market is also experiencing a significant uptick, fuelled by the growth of tourism and the large-scale demolition of outdated accommodation, which has pushed many towards renting. As a result, rental prices have increased annually by 4%-5%.

A key factor underpinning this demand is Azerbaijan and Baku’s adherence to the principles of smart urbanism, which aims to create living spaces that are not only technologically advanced, but sustainable and human-centred. A prime example of this approach is the Sea Breeze Resort and Residential Complex, which embodies the smart urbanism concept through its integration of luxury living with sustainability and advanced infrastructure.

At InvestBaku, we are keenly aware of these trends and developments, recognising the significant potential they hold for investors. We are always ready to provide detailed insights and facilitate investment in these burgeoning opportunities, ensuring our clients can capitalise on the dynamic and evolving landscape of Baku’s real estate sector.