BAKU, Azerbaijan, March 31. New projects on the
establishment of large industrial enterprises will be announced in
Azerbaijan's Alat Free Economic Zone (AFEZ), Chairman of the Board
of the AFEZ Authority, Valeh Alasgarov, told Trend in an exclusive
interview.
According to him, these projects will enhance the appeal of the
free zone for investment and will provide a significant push for
the growth of export-oriented production.
During his interview, the chairman touched on the allure of the
AFEZ, the investors keen on the institution, upcoming projects, and
various other pertinent matters.
He first talked about the history and attractiveness of the free
zone and mentioned that all important aspects have been
considered.
"If these factors had not been taken into account, it would not
have been possible to create such a zone. In order to be more
attractive, the experience of free economic zones operating not
only in regional countries but in a wider geographical area has
been studied, including their legislation, conditions, and reasons
for success or failure. As of today, there are over 4,500 free
economic zones globally, but not all of them can be deemed
successful.
Based on this analysis, the AFEZ has been located in such an
area that it is more attractive compared to other zones. The free
zone is adjacent to the Baku International Sea Trade Port and is
situated at the intersection of international transport corridors
such as North-South and East-West. This provides investors with the
opportunity to use sea, railway, and road transport.
Investors in our area know in advance that they can use sea
routes, railways, and highways. Additionally, we must consider that
companies producing high-tech products mostly send their goods not
by rail or road, but by air transport. This allows them to save
both time and costs. Therefore, we reached an agreement with the
well-known Silk Way air carrier company, and the company has
started the construction of a large airport in the territory of the
AFEZ. A total of 750 hectares have been allocated for this airport
because there, not only the airport itself, but also all the
infrastructure must be created to ensure the transportation,
storage, and distribution of goods for companies wishing to
transport their goods through this airport.
The cargo and business aviation segments of the mentioned
airport will be commissioned no later than the end of the first
quarter of 2027. The initial annual cargo capacity will be 500,000
tons annually, and it is planned to increase this indicator to 1.5
to 2 million tons in the future. With the launch of the airport,
our investors will be able to transport their goods by any type of
transport in both export and import operations. This, in turn,
increases the attractiveness of the Free Zone. Of course, other
companies will also be able to send or receive their goods through
the mentioned airport," he delineated.
Alasgarov pointed out that the AFEZ provides investors with
industrial land plots with ready-to-use on-site and off-site
infrastructure and facilities.
"That is, the investor shouldn't wait for years for the
establishment of the relevant infrastructure. For this reason, the
provision of ready-to-use industrial land plots in the AFEZ is a
very important factor for investors. That is, the area presented to
the investor is already provided with infrastructure such as water,
natural gas, sewage, communications, electricity, etc. This is a
huge advantage. When we look at other zones, we see that most of
them do not have such conditions.
Another factor that increases the attractiveness of the AFEZ is
the exemption of companies operating here from all taxes and
customs duties. In addition, we should also emphasize the
legislation of the AFEZ. As you know, the Alat Free Economic Zone
was established by a special law of Azerbaijan, the law 'On the
Alat Free Economic Zone.' The legislation of the AFEZ consists of
this law and the internal rules approved by the AFEZ Authority.
This is of great importance for investors. For example, to register
in the AFEZ, it is enough to apply to the AFEZ Authority. If the
authority considers the proposed project acceptable, the company
will be registered. There is no need to apply to any state body of
the economy here," he explained.
Investors interested in the Alat Free Economic
Zone
Alasgarov emphasized that investors who want to establish
export-oriented enterprises in the AFEZ are given more
preference.
"Investors who establish their production facilities in the Alat
Free Economic Zone and export 75% or more of their produced goods
are given more attention. Of course, it's also important that the
project complies with advanced European standards.
Sometimes, giving preference to export-oriented projects raises
surprise. However, if this were not the case, small or medium-sized
enterprises focused on producing products for the local market
could arise in the AFEZ, which could create unfair competition for
companies in the base economy that pay all taxes and customs
duties. Therefore, export-oriented enterprises are given
preference. If a company is export-oriented, then its products must
meet international standards. Secondly, if a company exports 75% or
more of its products, then it must be a sufficiently large
enterprise. In this case, more jobs will be generated.
We also strive to ensure employment of Azerbaijani citizens by
companies operating in the AFEZ. There are already companies
operating in the AFEZ that have employed the citizens at their
facilities and have offered these citizens training programs in
enterprises located in other countries, giving them the opportunity
to acquire new skills. After the training, the citizens return to
the enterprise established in the free zone and apply the newly
acquired knowledge.
In the first phase, when we started registering investors on the
60-hectare area where construction work was completed, we saw that
the demand was extremely high. Therefore, we had to start the
construction of the next 138-hectare area much earlier than
planned. The construction work on these areas will be completed
very soon. Although the construction work isn't fully completed, we
have already registered some companies for these areas. Some of
them are already ready to begin construction work. A very important
point is that in 23 hectares of the mentioned 138-hectare area,
China’s Sunsync company will establish a solar panel production
facility. Most of the products produced will be exported, as the
production volume will be very large.
From the very beginning, the goal is to enter not just the
Azerbaijani market but also the global market. Naturally, we
recommend that investors use the solar panels produced by the
Chinese company in the construction of the roofs of the facilities
built in the free zone. This company will also participate in all
tenders held in Azerbaijan for the sale of panels. After the
Chinese company starts producing the mentioned products in the
AFEZ, it will be more convenient and advantageous for companies
building solar power plants to purchase panels from here. We have
also informed Sunsync that we are ready to provide land for
building a solar power plant. That is, using the solar panels
produced by this Chinese company in the AFEZ, a solar power plant
can be built, and the green energy obtained from it can be sold to
companies operating in the AFEZ.
The chairman also indicated that they are currently engaged in
an additional initiative.
"This concerns the production of wind power plants (WPPs).
Negotiations are ongoing with several companies for the
construction of a facility for the production of wind turbine
blades and other necessary equipment for WPPs in the AFEZ. This
will reduce production and construction costs, as well as eliminate
transportation and logistics difficulties related to the movement
of wind power plant equipment.
In parallel, we have already started construction work in the
area allocated for heavy industry. We have completed land work on
364 hectares. This year, we also plan to start other infrastructure
work. The work within the area allocated for heavy industry will be
carried out by the AFEZ Authority. Outside the area, Azerenergy
will soon begin the construction of a large substation.
Additionally, other state institutions will carry out
infrastructure work. It's already a very positive development that
applications are coming in to operate in the area allocated for
heavy industry. Soon, we will announce projects related to the
establishment of large enterprises in the AFEZ
Overall, the work related to the activities of the companies
registered in the AFEZ is ongoing at different stages. For example,
some companies have already started production, others are about to
start producing their initial products, while some are still at the
construction or design phase. These companies are mainly from
Türkiye, China, Israel, European countries, as well as local
Azerbaijani companies," he said.
New opportunities created by transport
corridors
Alasgarov also pointed out in the interview that Azerbaijan’s
geographical location has turned it into an international transport
hub. He mentioned that there has been a steady rise in the flow of
goods to the country, particularly in relation to the Middle
Corridor. The chairman addressed the significance of the AFEZ in
unlocking the freight potential of the North-South and East-West
corridors.
"Previously, there was only access to the Poti port via railways
or roads, but today we already have access to Türkiye through the
Baku-Tbilisi-Kars railway and from there to the sea ports on the
Mediterranean coast. However, once the Zangezur Corridor opens, it
will naturally create new opportunities for the transportation of
any type of cargo for us. The new route will shorten the distance
for transport, accelerate the process, and reduce transportation
costs. At the same time, the Zangezur Corridor will provide direct
access to the sea ports of Türkiye on the Mediterranean coast. This
is a very important issue.
We are in talks about creating an aluminum production facility
in the AFEZ. If this facility produces a minimum of 250,000 tons of
aluminum per year, it will require at least 550,000-600,000 tons of
raw materials. The raw materials will be brought by ship from
foreign countries such as Vietnam, Guinea, and others. Therefore,
once the Zangezur Corridor opens, the raw materials will be
delivered more quickly and easily to Azerbaijan through large ships
to Turkish ports on the Mediterranean coast, and then by rail via
the Zangezur Corridor. Thus, the opening of the Zangezur Corridor
is of great importance," he underscored.
Participation in international events and
exhibitions
In conclusion, Alasgarov noted that steps have been taken to
promote the institution he leads to foreign investors through
participation in international exhibitions.
"We participate in various events in European countries. In
April this year, we'll participate in a major exhibition in
Hannover, Germany. We also participated in the same exhibition last
year and had a large booth. We provide extensive information to
companies there about the AFEZ and promote the free zone. At the
same time, we meet and negotiate with representatives of companies
coming to Azerbaijan from European countries. Earlier this year, we
held a meeting with a delegation from the European Union, led by
David Cullen, Head of the Directorate for Enlargement and Eastern
Neighbourhood at the EU.
We presented them with detailed information about the unique
legislative framework of the free zone, industrial land plots
equipped with ready-to-use internal and external infrastructure and
modern engineering-communication systems, as well as a
comprehensive package of financial and non-financial incentives for
investors. Special attention was also given to the transport and
logistics infrastructure and development potential of the free
zone.
Thus, necessary measures are being taken to attract foreign
investors to the Alat Free Economic Zone," he added.
Stay up-to-date with more news on Trend News
Agency's WhatsApp channel
