Azerbaijan planning $2bn investment in Pakistan

December 16, 2025 (MLN): Azerbaijan has expressed an appetite to invest close to $2 billion in Pakistan, with energy, oil and gas, and minerals and mining identified as priority sectors, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said during an interview.

In two separate interviews with Azerbaijan’s leading news agency REPORT and Russia’s prominent agency RIA Novosti, the finance minister outlined Pakistan’s strategy to deepen regional connectivity, expand trade routes, attract investment-led growth, and position the country as a reliable and competitive partner amid a rapidly evolving global economic landscape.

Speaking to REPORT, Senator Aurangzeb said Pakistan’s strong government-to-government relations with Azerbaijan are now translating into tangible economic outcomes, with trade and investment flows gaining momentum.

He revealed that discussions are underway on multiple projects, including a potential oil pipeline investment being explored by Azerbaijan’s state oil company SOCAR, describing the engagements as progressing steadily.

He emphasized that any financial support or lending from Azerbaijan would be structured to facilitate trade and investment rather than aid, in line with Pakistan’s preference for sustainable financing models linked to productive economic activity.

Such arrangements, he said, could include central bank placements or project-linked financing to support Azerbaijani investors operating in Pakistan.

The finance minister also highlighted Pakistan’s interest in learning from Azerbaijan’s advances in digital services, including technology-led service centres, artificial intelligence, fintech and cybersecurity, noting that Pakistan is moving toward a digital economy supported by enhanced payment systems and digital infrastructure.

Looking ahead, Senator Aurangzeb stressed the importance of South-South cooperation at a time when the global trading system is under strain.

He pointed to the potential for new trade and transport corridors linking Pakistan, Central Asia and Azerbaijan, observing that current bilateral trade volumes fall short of the two economies’ true potential.

He also underscored the need to develop financial instruments, such as guarantees, export credit mechanisms, banking linkages and Islamic finance tools, to support the ambitious bilateral trade and investment agenda.

In his interview with RIA Novosti, the finance minister reiterated Pakistan’s desire to join BRICS, noting that the country is already an active member of the Shanghai Cooperation Organisation (SCO) and could play a constructive role within the BRICS framework.

He acknowledged ongoing global discussions on alternative cross-border payment systems, saying Pakistan would explore such mechanisms as its engagement with BRICS evolves.

On the investment climate, Senator Aurangzeb said macroeconomic stability remains the government’s foremost priority, as investor confidence hinges on currency stability, profit repatriation and overall economic certainty.

He noted that foreign exchange reserves are steadily improving, approaching coverage of nearly three months of imports, calling this “elementary hygiene” for investor assurance.

He added that sovereign guarantees and export credit agency support could be considered on a project-by-project basis to mitigate country risk.

Addressing digital assets, the finance minister said Pakistan’s central bank is evaluating digital currencies in view of the significant number of Pakistanis engaged in cryptocurrency-related activity.

The government’s objective, he explained, is to bring the sector into a regulated framework, supported by the creation of a virtual assets regulatory authority, while carefully assessing risks related to capital flows, compliance and anti-money-laundering standards.

Senator Aurangzeb also highlighted the transformative potential of artificial intelligence for Pakistan’s economy, particularly in agriculture, finance, healthcare and digital infrastructure.

He noted that Pakistan’s large freelancer base could significantly benefit from AI adoption through higher productivity and income levels.

He expressed interest in learning from Russia’s experience in applying AI to public finance and budgeting, while stressing the continued importance of human oversight in policymaking.

On regional connectivity, the finance minister emphasized developing trade corridors, including the International North-South Transport Corridor, to ensure resilient trade flows amid global uncertainty.

He identified energy, oil and gas, minerals, mining and industrial cooperation, including the possible establishment of a steel plant, as key areas of potential collaboration between Pakistan and Russia, noting that discussions are ongoing at the ministerial level.

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