French - Azerbaijani trade and investment outlook

Questions and answers with the Ambassador of France, Zacharie Gross

More than a year after the beginning of the Covid pandemic, what are the trade trends between France and Azerbaijan, especially in the context of COVID-19 pandemic ?

Trade between the two countries has taken a beating.

French exports to Azerbaijan went up 20 % in 2019. Then they went down 20 % in 2020. Azerbaijan’s exports to France also followed the same « upwards-downwards » trend. This was largely due to Covid and to the slowing down of the global economy following pandemic restrictions.

Is France investing in Azerbaijan and what are the future prospects in this area ?

In the public sector, the main investments made by the French government are in the transport sector. The French development agency AFD invested 280 M euros in rail connectivity in Azerbaijan, through long-term low interest rate loans to Azerbaijan’s railway company ADY. AFD is very happy with this investment that went towards Azerbaijan’s East-West and North-South rail corridors, the construction of locomotive depots in Ganja and Bilajari and a review of the company’s corporate governance.

AFD is ready to immediately grant up to 5 M euros for feasibility studies to accompany Azerbaijan’s future infrastructure projects, in transport, water, clean energy and sustainable development. This is a donation that takes into account the new challenges to Azerbaijan’s economy, including in terms of reconstruction of the recovered territories.

France’s development agency works like other international financial institutions such as the World Bank and is ready to double its investments in Azerbaijan up to 600 M euros. A team from AFD came to Baku in March and they are expected again in July and August.

Interestingly, AFD is ready to work with other international organisations such as the Asian Development Bank and of course the European Union. AFD is doing the same in all three countries of the South Caucasus, so I think it is fair to say France is interested in partnering constructively with all parties for the success of the region.

As for the private sector, the largest investment remains that of Total in its « Absheron » project, in the off-shore gas sector.

Are you concerned political tension and the global pandemic could impact cooperation and investment ?

As I mentioned, Covid-19 clearly had a global impact and naturally it has had an impact on bilateral trade. But it will not slow down French investments, through long term, low interest rate loans to Azerbaijan if there is an interest for such an approach. I should mention that such loans are not tied to any contracts or specific suppliers of equipment and services. This is French taxpayers’ money well invested in long-term development and stability of the region.

The rebuilding of Azerbaijan’s liberated territories is a major challenge. Are French companies ready to take part in the effort ?

Business decisions dependent on the private sector but, as Minister Jean-Baptiste Lemoyne said when he visited Baku in January, there is no obstacle, political or other, to French businesses working in the territories Azerbaijan has recently recovered.

What is the current outlook in the area of bilateral trade ?

To be honest, despite the obvious potential, I am somewhat concerned about the future of trade and economic relations between France and Azerbaijan. Are French companies informally being pushed aside ? I have no idea, I hope not, because it would be a pity and it would be misguided since French companies are in no way responsible for the state of government relations between France and Azerbaijan.

Many of these companies are well known here, they are global companies with a historical presence in Azerbaijan, they have knowledge of the market, they are interested in partnering locally, they have made investments, including in personnel - and I dare say they stay well away from politics. In fact, if anything, they have an interest in the development of a single South-Caucasus market and therefore feel comfortable with Azerbaijan’s regional development and connectivity projects.

As ambassador of France to Azerbaijan I am aware of the current political sensitivities, but I am optimistic because the political dialogue remains active and indeed because France and Azerbaijan have many shared interests.

publié le 09/07/2021

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