The analyst expects the construction industry in Azerbaijan to expand by 4.7% in real terms in 2025, supported by investments in oil and gas, renewable energy, and transport infrastructure projects, coupled with rising foreign direct investment (FDI) in the country. According to the Central Bank of Azerbaijan, total FDI inflows reached AZN12 billion ($7 billion) in 2024, reflecting a 5.8% increase compared to the previous year. According to the state statistics committee, in January-April 2025, investments in Azerbaijan’s fixed capital amounted to AZN5.1 billion ($3 billion). During this period, investments in the non-oil and gas sector increased by 5.3%. Of the total investments, 50.9% were directed to the production sector, 32.1% to the service sector, and 17% to residential construction. Domestic investments accounted for 74.4% of the total funds allocated to fixed capital, and 78.3% of these funds were used directly for construction and installation works.
Over the remainder of the forecast period, the construction industry is expected to register an annual average growth rate of 3.3% between 2026-29, supported by investments in transport and renewable energy infrastructure projects, coupled with the government’s plan to increase the share of renewable energy. Azerbaijan aims to increase the share of renewables in its installed power capacity to 33.7% by 2027, 38% by 2030, and 42.5% by 2035, compared to the current level of 20.9% as of 2024. These targets were confirmed by the Energy Minister during the Baku Energy Forum in June 2025. Azerbaijan is set to make major advancements in its renewable energy sector over the next two years, with plans to commission 10 new solar and wind power plants as part of the country’s first phase of green energy development, backed by a total investment of AZN4.6 billion ($2.7 billion).
Over the remainder of the forecast period, the construction industry is expected to register an annual average growth rate of 3.3% between 2026-29, supported by investments in transport and renewable energy infrastructure projects, coupled with the government’s plan to increase the share of renewable energy. Azerbaijan aims to increase the share of renewables in its installed power capacity to 33.7% by 2027, 38% by 2030, and 42.5% by 2035, compared to the current level of 20.9% as of 2024. These targets were confirmed by the Energy Minister during the Baku Energy Forum in June 2025. Azerbaijan is set to make major advancements in its renewable energy sector over the next two years, with plans to commission 10 new solar and wind power plants as part of the country’s first phase of green energy development, backed by a total investment of AZN4.6 billion ($2.7 billion).
The Construction in Azerbaijan - Country Briefing (H2 2025) report provides detailed market analysis, information, and insights into Azerbaijan’s construction industry, including:
- Azerbaijan’s construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Azerbaijan’s construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Scope
This report provides a comprehensive analysis of the construction industry in Azerbaijan. It provides:
- Historical (2020-2024) and forecast (2025-2029) valuations of the construction industry in Azerbaijan, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
- Assess market growth potential at a micro-level with over 600 time-series data forecasts
- Understand the latest industry and market trends
- Formulate and validate business strategies using the analyst's critical and actionable insight
- Assess business risks, including cost, regulatory and competitive pressures
- Evaluate competitive risk and success factors
Table of Contents
1 Executive Summary2 Construction Industry: At-a-Glance3 Latest news and developments4 Project analytics5 Construction Market Data6 Risk Profile
7 Appendix
List of Tables
List of Figures
