Gazprombank: "Azerbaijan is becoming a new leading logistics hub of global supply chains in Eurasia"

“In the context of the restructuring of global supply chains in Eurasia, Azerbaijan is emerging as a new leading logistics centre, occupying a strategic central position between Europe and China and possessing developed aviation, rail, pipeline, and maritime infrastructure,” according to Gulnara Khaidarshina, Deputy Head of the Market Analysis Department of the Russian Gazprombank.

"New initiatives in [Nagorno]-Karabakh, such as the building of transportation and social infrastructure, industrial parks, and renewable energy facilities, will enable the diversification of Azerbaijan's economy in the medium term," she said. "All of these elements create the conditions for Azerbaijan's rating to improve and maybe be upgraded to investment grade," Khaidarshina remarked.

Gazprombank is experiencing a rebound in economic activity in Azerbaijan's non-oil sector, she added, owing to the lack of repeated tightening of quarantine restrictions. Azerbaijan, as an oil and gas exporter, is one of the main benefactors of rising hydrocarbon prices, according to Khaidarshina.

TAP and EXA Infrastructure will construct a new fibre route

The Trans Adriatic Pipeline AG (TAP), which transports natural gas from Azerbaijan to Europe as part of the Southern Gas Corridor, and EXA Infrastructure, the world's largest dedicated digital infrastructure platform connecting Europe and North America, announced a memorandum of understanding for a joint venture to build a new fibre route connecting France and Turkey.

The joint venture will use a TAP-installed fibre optic cable alongside the 878-kilometer gas pipeline to create the sole direct link between southeast and western Europe, providing high levels of redundancy over current multi-stage alternative methods.

Since late 2020, TAP has operated as an independent transmission system operator. The pipeline links to the Trans Anatolian Pipeline at the Greek-Turkish border, then travels across Northern Greece, Albania, and the Adriatic Sea before reaching the Italian natural gas network in Southern Italy.

TAP's spare fibre infrastructure, which are distinct from TAP's gas business, will be shared by EXA over its whole length. EXA and TAP foresee obtaining all necessary permits and the new system is set to become live in the first quarter of 2023.

"For more than two decades, a reliable, high-speed, low-latency connection between south-east and western Europe has been a gap in the continent's network architecture. The JV will bring a direct link from Marseille to Istanbul to EXA's owned network infrastructure through the new fibre optic line, with branches connecting to Athens, Sofia, and Tirana,” according to the release.

In the crucial stretch of the new corridor, 36 pairs of state-of-the-art, high-capacity G652D optical fibre will be installed.

Freight trade between Azerbaijan and Georgia will take less time on average

According to the Asian Development Bank's (ADB) Annual Report, the average time of freight traffic between Azerbaijan's border and Georgia's Batumi Port would be lowered by four hours. The ADB has granted $50 million to Georgian Railway JSC in green bonds worth $500 million for rail network upgrade in 2021. The network's annual freight capacity is planned to expand from 27 million tonnes in 2020 to 48 million tonnes by 2024 after the project is finished.

"Through a new technical assistance project, ADB is helping develop an economic corridor framework for the South Caucasus to leverage investment, promote trade facilitation, and assess new tourism opportunities through transport gateways between Armenia, Azerbaijan, Georgia, and beyond," ADB said.

Azercosmos exports $6.2 million in services

The Center for Economic Reforms Analysis and Communication of Azerbaijan announced in its April export assessment. The centre stated that Azercosmos, Azerbaijan's satellite operator, supplied services worth $6.2 million to 31 nations in January-March 2022. Export of services revenues accounted for 86% of the company's overall revenue. 

Azercosmos' top five export destinations were the United Kingdom ($1.6 million), France ($1.1 million), Luxembourg ($1.1 million), the United Arab Emirates ($0.6 million), and Pakistan ($0.4 million). In March, the firm sold services worth $2.1 million to 30 different nations. Azercosmos sold $45.3 million in services to 41 countries in 2021. Export of services revenues accounted for 89% of the company's overall revenue. France, the United States, the United Kingdom, Malaysia, and the United Arab Emirates were the top five nations to which Azercosmos supplied services last year.

Azercosmos, which was founded in 2010, is the region's only satellite operator, providing high-quality satellite services for telecommunications and geospatial information. The Azercosmos satellites, along with the Azerspace-1, Azerspace-2, and Azersky satellites, enable the reception of signals from other satellite operators via a fibre-optic network.