BAKU, Azerbaijan, June 16. Baku is hosting the
Annual Meeting of the Islamic Development Bank Group (IsDB), one of
the largest events in international development and finance in the
Islamic world, from 16 to 19 June. Representatives from the bank’s
57 member countries, international financial institutions,
investment funds, and development organizations have gathered in
the capital of Azerbaijan.
The theme of this year’s meeting is “Regional Integration for
Sustainable Prosperity”. However, for Azerbaijan, the forum has
much broader significance than simply serving as a platform for
discussing the economic agenda. It’s an opportunity to showcase the
results of years of reform, attract new investment, and define the
parameters of cooperation with the Islamic Development Bank for the
coming years.
Over three decades of cooperation
Azerbaijan joined the Islamic Development Bank in 1992, shortly
after regaining its independence. Over the years, the country has
become a member of all IsDB Group entities, including the Islamic
Development Bank, the International Islamic Trade Finance
Corporation (ITFC), the Islamic Corporation for the Development of
the Private Sector (ICD), and the Islamic Corporation for the
Insurance of Investment and Export Credit (ICIEC).
Over this period, this cooperation has evolved into a
full-fledged strategic partnership. The bank’s support encompassed
infrastructure project financing, technical assistance, trade
facilitation, strengthening of public institutions, and private
sector support.
As of the end of 2025, the total volume of approved IsDB Group
operations in Azerbaijan reached $1.3 billion. Of this, $1.04
billion was directly provided by the Islamic Development Bank. ITFC
operations totaled $93.4 million, ICD financing reached $165.2
million, and other funds of the group provided an additional $25.7
million.
In total, the cooperation portfolio includes 85 projects, 75 of
which have already been completed, and another 10 are under
implementation.
Energy remains primary focus
The energy sector has traditionally been the largest recipient
of financing.
It accounted for 37.3% of all transactions, or approximately
$495 million. Over the years of cooperation, seven major energy
projects have been implemented, and new initiatives in this sector
are already being considered for further financing.
This structure reflects Azerbaijan’s role as one of the region’s
leading energy centers. However, in recent years, cooperation has
gradually expanded far beyond the oil and gas sector.
Other areas include the development of water supply and
sanitation infrastructure, agriculture, the financial sector,
transport, and sustainable development projects.
In fact, the evolution of cooperation between the IsDB and
Azerbaijan reflects the transformation of the Azerbaijani economy
itself, which is increasingly focused on diversification and
development of non-oil sectors.
New partnership strategy: heading for 2030s
One of the key results of the current forum may be the
advancement of work on a new Partnership Strategy between
Azerbaijan and the Islamic Development Bank for 2027–2031.
As IsDB Group Chairman Muhammad Sulaiman Al Jasser said in an
exclusive interview with Trend during his visit to Baku in May, the
parties expect to sign a memorandum of understanding on this issue
in June.
According to him, the new strategy should give additional
impetus to the country’s economic development and speed up the
implementation of major investment projects.
It’s especially important that the bank’s management views
Azerbaijan as a country with a stable macroeconomic system and a
relatively low level of public debt.
Al Jasser emphasizes that borrowing from international
development institutions is used by Azerbaijan primarily for
productive investments that can create a long-term multiplier
effect, stimulate economic growth and create quality jobs.
This approach is fully consistent with the financing model of
the Islamic Development Bank itself, which relies on projects with
high returns for the national economy.
Azerbaijan as example for countries of Islamic
world
Particular attention is drawn to the high assessment that the
bank’s management gives to the modern development of
Azerbaijan.
According to Al Jasser, the June meetings should demonstrate to
member countries Azerbaijan’s achievements in the field of economic
development, public administration and digital transformation.
In fact, the head of the IsDB directly called Azerbaijan a model
whose experience other countries can study and apply.
This emphasis isn’t accidental.
In recent years, Azerbaijan has made significant progress in
digitalizing public services, modernizing infrastructure, improving
the business climate, and developing transport and logistics
corridors.
Holding such a high-profile international forum serves as a
showcase for these achievements.
As Al Jasser noted, introducing foreign delegations to the
transformations underway in the country can facilitate not only
expanded cooperation with development institutions but also the
attraction of private capital.
Therefore, the current meeting is viewed not simply as a
diplomatic event, but as a tool for promoting the country’s
investment.
Islamic finance: new window of opportunity
The development of Islamic finance is emerging as one of the
most promising areas of cooperation.
In recent years, the IsDB has provided Azerbaijan with
significant technical support in creating a regulatory framework
for Islamic financial instruments.
Back in 2020, a project to develop legal mechanisms for Islamic
finance was completed. Currently, the Islamic Development Institute
(IsDBI) is implementing a new project to create conditions for the
issuance of sukuk and the introduction of other Islamic finance
instruments.
Furthermore, the IsDBI has approved a $255,000 grant for the
Central Bank of Azerbaijan to develop the capital market regulatory
framework. This project continues a previous technical assistance
program worth $200,000.
According to Al Jasser, the global Islamic finance market
currently stands at approximately $3.5 trillion, opening up a whole
new investor base for Azerbaijan.
This is not about replacing traditional financial instruments,
but rather about diversifying capital sources.
This is particularly relevant for Azerbaijan as it implements
large-scale projects in infrastructure, industry, agriculture, the
digital economy, and renewable energy.
The emergence of a sukuk market could significantly expand
investment opportunities for the public and private sectors, as
well as enhance the economy’s long-term financial stability.
Regional integration and transport
corridors
The topic of this meeting—regional integration—is directly
related to Azerbaijan’s growing role as a transport and logistics
hub for Eurasia.
According to the IsDB head, the country is already becoming a
key crossroads of international trade thanks to its geographic
location and consistent economic policies.
The development of railway routes, highways, maritime transport
across the Caspian Sea, and international transport corridors is
turning Azerbaijan into an important link between East and West,
North and South.
It’s particularly significant that the bank’s management views
transport connectivity not only as a factor in national growth but
also as a mechanism for the development of the entire region.
This is entirely consistent with the concept of the current
forum, which envisions strengthening economic ties between
countries of the Islamic world through the development of trade,
investment, and infrastructure.
From borrower to donor?
Perhaps the most telling statement by Al-Jasser was his
assessment of Azerbaijan’s long-term prospects.
According to him, the Islamic Development Bank expects
Azerbaijan to transition from a borrower to a donor country in the
future.
For an international financial institution, such an assessment
is highly significant.
It reflects a high level of confidence in the country’s economic
policy, its financial stability, and its prospects for further
growth.
Given the implementation of the “Azerbaijan 2030” strategy, the
active development of the non-oil sector, the expansion of export
potential, and the country’s transformation into a regional
logistics hub, this prospect no longer appears to be a purely
long-term goal.
The Islamic Development Bank’s annual meeting in Baku is
becoming an important event not only for the bank and its member
states, but also for Azerbaijan.
On the one hand, the forum is summing up more than thirty years
of cooperation, with projects valued at over $1.3 billion. On the
other hand, it’s opening a new chapter in the partnership, focusing
on the development of a Cooperation Strategy for 2027–2031, the
development of Islamic finance, attracting new investment, and
supporting large-scale infrastructure initiatives.
It’s symbolic that the central theme of this year’s forum was
regional integration. It is in this area that Azerbaijan is rapidly
strengthening its position, becoming an important transport, trade,
and financial hub between Europe, the Middle East, Central Asia,
and the Islamic world.
Therefore, holding the IsDB Annual Meeting in Baku can be seen
not only as recognition of the results already achieved but also as
a signal of Azerbaijan’s growing role in the architecture of
regional economic cooperation.
