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Azerbaijan looks to Europe for construction expertise

Suppliers of advanced construction safety technologies could have a new market to consider – Azerbaijan. The oil-rich state signed a new agreement in December 2015 with the German Institute of Building Technology to apply EU standards to its many construction projects – giving European building material suppliers a new way to benefit from Azerbaijan’s building boom of recent years.

The agreement, signed in Baku in December, continues an existing programme to boost construction standards in Azerbaijan funded by €900,000 of EU money. This previous scheme saw German and Latvian specialists travel to Azerbaijan to work with the country’s builders, specifiers and buyers, helping them raise construction standards using cutting-edge products – including those sold by the many international suppliers in Azerbaijan’s construction industry.

Speaking at the signing ceremony, EU Ambassador to Azerbaijan Malena Mard said that the project brings brand new opportunities to work with the state bodies that commission, manage and influence Azerbaijan’s many construction projects.

The deal is welcome news for foreign companies operating in Azerbaijan. The country’s economy has suffered a slowdown as oil revenues fell last year. This makes moving away from dependence on oil even more vital – and the fast-growing construction industry is a prime candidate to replace oil-based growth.

Construction in the country has been growing steadily for a number of years now. The sector's contribution to national GDP has grown every year but one since 2006, and was estimated at a healthy 12.5% in 2014, according to government statistics. While large projects like the 33-floor Trump International Hotel and the 382,000 sqm, three-tower Port Baku Residence have greatly benefited suppliers, large-scale housebuilding also offers opportunities. 

Aside from the ongoing mega-projects that are transforming Baku, here are some recent projects in Azerbaijan’s building sector that have been announced towards the end of 2015:

•    5 million manat (around $3.2 million) from the Azerbaijani President’s Reserve Fund will be spent on replacing the roofs of 100 apartment complexes in Sumgait, the third-largest city of Azerbaijan. Elsewhere, it has been a good year for construction in Sumgait, which is located around 30 km from the capital Baku – Italian building firm Maire Tecnimont won a €350 million engineering, construction and procurement contract this year to build a major petrochemical plant in the Sumgait Chemical Industrial Park.
•    Azerbaijan’s State Agency for Public Service and Social Innovations will get a brand new 9 million manat ($5.7 million) headquarters in the Massaly area of southern Azerbaijan. Entirely government-funded, the building work for the headquarters is expected to begin this year.

Read more about the Azerbaijan construction market here, including major projects, statistics on the industry, and how to do business with potential Azerbaijani partners.


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