As Azerbaijan accelerates its green transition, the Alat Free Economic Zone (AFEZ) is rapidly positioning itself as the country's flagship platform for clean technology and sustainable industrialization. The zone, located strategically near the Port of Alat south of Baku, is not only a logistics and manufacturing hub but increasingly a focal point for green investment and renewable energy innovation.

According to Valeh Alasgarov, Chairman of the Board of the AFEZ Authority, about 200 hectares of land have already been allocated for development, with 138 hectares presented to investors. Among them, 23 hectares are reserved specifically for solar panel production facilities, marking one of Azerbaijan's most tangible steps toward building a domestic green energy supply chain.

“Three factories are planned - one focused exclusively on solar panel assembly, and two others producing silicon crystals and related materials,” Alasgarov noted, emphasizing the integrated nature of this industrial ecosystem.

Already, companies from China, India, Russia, Israel, and Türkiye have registered in the zone, with four actively constructing facilities and two expected to start production by the end of this year.

The AFEZ offers investors one of the most favorable regulatory and fiscal frameworks in the region. The zone operates under an independent legal regime, ensuring that state institutions cannot interfere in its internal activities. Investors enjoy tax and customs exemptions, along with ready-to-use industrial plots equipped with complete infrastructure and communication systems.

This model is designed to attract export-oriented and high-value-added industries - at least 75% of goods produced in the zone must be exported - ensuring integration with global markets while protecting the domestic economy from potential imbalances.

Such an approach clearly illustrates Azerbaijan's strategic vision to position Alat as a key gateway between Europe and Asia, serving not only as a hub for logistics and trade but also as a center for clean and sustainable industrial development. The design of the Free Economic Zone reflects the country's broader economic agenda, where diversification and green transition intersect - aligning industrial policy with global sustainability goals.

Azerbaijan's broader commitment to green energy provides the policy backbone for initiatives like AFEZ. Energy Minister Parviz Shahbazov recently underlined the scale of progress in the country's energy sector, noting in Azerbaijan newspaper that:

“With the commissioning of new power plants, the total electricity generation capacity of our country has now reached 9,732.5 MW - an increase of 1,317 MW, or 15.6 percent, compared to the same period last year.”

He also highlighted the launch of the 1,880 MW“8 Noyabr” Power Plant, calling it“a shining example of international partnership in the field of electricity,” developed with Chinese and Italian companies.

This expanding energy mix includes renewable components, with 9 solar plants (278.2 MW) and 5 wind farms (63.5 MW) already in operation, alongside ongoing hybrid and waste-to-energy projects. The government's declared goal of transforming Garabagh and Eastern Zangazur into“green energy zones” demonstrates that renewable development is no longer peripheral - it is now a pillar of national economic policy.

The convergence of energy transition policies and investment liberalization makes the Alat Free Economic Zone a strategic experiment in sustainable industrial policy. By offering a business-friendly environment tied to renewable production, Azerbaijan is signaling to global investors that it aims to be a regional leader in green industry.

Experts argue that AFEZ could soon play a critical role in attracting technology transfers, green finance, and climate-friendly manufacturing - from solar panels and batteries to smart infrastructure components. The participation of international firms underscores growing confidence in Azerbaijan's regulatory stability and long-term economic vision.

In essence, the Alat Free Economic Zone reflects Azerbaijan's commitment to combining sustainable energy development with an open and competitive investment environment. The zone demonstrates the country's readiness to attract international investors, promote clean industrial growth, and align economic diversification with global trends in renewable energy and innovation.

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