The Islamic Corporation for the Development of the Private Sector (ICD) and SOCAR signed a Memorandum of Understanding (MOU) on June 17, 2026, in Baku, during the IsDB Group Annual Meeting. The signing took place on the sidelines of the Private Sector Forum, showing the significance of the event as a key platform for multilateral dialogue on development finance and private sector engagement. The agreement outlines a framework for exploring Shariah-compliant, limited-recourse public-private partnership (PPP) financing in Azerbaijan and other ICD member states, emphasizing the alignment of Islamic financial principles with infrastructure and energy development needs. This collaboration builds on the momentum generated by the annual meeting, which brings together stakeholders from across the global south to discuss sustainable investment strategies and economic transformation.
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The partnership focuses on infrastructure and energy projects in Azerbaijan and other ICD member countries. These initiatives will be implemented through project companies co-owned by SOCAR and its investment partners, ensuring a structured approach to resource allocation and risk-sharing. The collaboration aims to mobilize private investment and resources, leveraging SOCAR’s extensive expertise in oil, gas, and infrastructure development alongside ICD’s experience in multilateral development finance. This cooperation is designed to address the complex challenges of large-scale project execution, from technical execution to financial sustainability, while adhering to Shariah-compliant principles that prohibit interest-based transactions and prioritize ethical investment.
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The MOU establishes a framework for identifying and evaluating financing opportunities, with a specific focus on senior limited-recourse financing for PPP projects. ICD will provide tailored Shariah-compliant solutions for project companies co-owned by SOCAR and its partners, ensuring that financial structures align with both Islamic law and the practical needs of infrastructure development. The agreement spans 2026 to 2027, during which recognized PPP structures will be utilized to accelerate the implementation of energy and infrastructure projects. This timeframe reflects a strategic commitment to delivering measurable outcomes within a defined period, while maintaining flexibility to adapt to evolving market conditions and regulatory environments.
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The collaboration leverages SOCAR’s status as the largest integrated energy enterprise in the South Caucasus, a region strategically positioned to serve as a hub for energy transit and regional economic integration. SOCAR’s global presence, spanning multiple continents, positions it to contribute to international energy projects that align with ICD’s broader objectives of supporting sustainable development. Meanwhile, ICD’s role as a multilateral institution enables it to coordinate cross-border investments and policy frameworks that support inclusive growth, reflecting the dual focus of the partnership on both technical execution and systemic impact.
