Azerbaijan - Country Partnership Framework for the Period FY25-29

Investment Rating - The report does not explicitly provide an investment rating for the industry or sector discussed Core Insights - The World Bank Group (WBG) aims to support Azerbaijan in transitioning to a more dynamic and greener growth model, focusing on enhancing resilience, sustainability, productivity, and job creation [13][16] - Azerbaijan's economic growth has slowed, necessitating a shift from hydrocarbon dependency to a diversified economy that includes renewable energy sources [14][15] - The government has set ambitious climate targets, including a 35% reduction in greenhouse gas emissions by 2030 and increasing renewable energy to 30% of the energy mix by 2030 [15][35] Summary by Sections I. Introduction - The Country Partnership Framework (CPF) outlines WBG's engagement in Azerbaijan for FY25-29, aligning with the government's socio-economic development strategy [13] II. Country Context and Development Agenda - Social and Political Context: Azerbaijan remains politically stable under a centralized government, with ongoing discussions for a peace agreement with Armenia that could enhance regional trade [18][19] - Recent Economic Developments and Outlook: Economic growth has averaged 1.7% annually since 2010, with a significant decline in the hydrocarbon sector, while the non-energy sector has shown growth [23][29] - Poverty and Shared Prosperity: The national poverty rate has stabilized around 5%, but rural areas face higher poverty levels and income vulnerability [31] - Development Agenda: The economy's heavy reliance on hydrocarbons and state involvement necessitates a new growth model driven by the private sector and economic diversification [36][39] III. World Bank Group Partnership Framework - Government Program and Medium-term Strategy: The government's development goals focus on economic diversification, social equity, and environmental sustainability [48] - Proposed WBG Partnership Framework: The CPF aims to leverage lessons learned from past engagements to foster a competitive, inclusive, and sustainable economy [30][49]