State Oil Fund boosts investments in infrastructure assets -COMMENTARY
The State Oil Fund of the Republic of Azerbaijan (SOFAZ), established to manage revenues from depleting natural resources for the benefit of current and future generations, marked its 25th anniversary last year. Managing assets exceeding $66 billion – equivalent to over 90% of Azerbaijan’s GDP – SOFAZ achieved a 6% investment return in 2024.
As a long-term capital provider, SOFAZ contributes to the welfare of Azerbaijan’s citizens and global sustainable development through a diversified investment portfolio spanning more than 50 countries and covering major financial assets and sectors. Guided by advanced practices and professional management principles, the Fund monitors macroeconomic trends such as the energy transition, digitalization, and transport-logistics, while increasingly evaluating strategic joint and direct investment opportunities.
One such opportunity is a recent agreement with Enfinity Global, an international renewable energy company, to acquire a 49% equity interest in a 402 MW portfolio of solar photovoltaic (PV) plants in Italy. Upon completion of the deal, Enfinity Global will retain a majority stake and continue managing the assets, leveraging its leading position in the Italian renewable energy sector.
The investment aligns with SOFAZ’s strategic objectives by offering a stable and predictable income stream while contributing to global efforts toward a sustainable energy transition – consistent with the Fund’s mandate as a long-term investor. Through this agreement, Enfinity brings in capital partners to support its Italian portfolio, enabling reinvestment and accelerating the deployment of its 2.6 GW solar and 5.3 GW energy storage pipeline, reinforcing its position as the leading Independent Power Producer (IPP) in the country.
Ilham Shaban, head of the Center for Oil Research, told AZERTAC that SOFAZ’s agreement in Italy expands its investment geography and further diversifies its portfolio.
“SOFAZ recognizes the need to invest in stable, new revenue sources as oil revenues decline. Previously, the Fund invested $50 million in ADNOC Gas Pipeline Assets LLC (AGPA) through a specialized investment fund managed by Lunate Capital, a global alternative investment firm based in Abu Dhabi, which generates stable returns. According to SOFAZ’s 2024 report, the Fund increased its annual investment return to 6.2%, a significant improvement from previous levels,” Shaban noted.
He added that while such infrastructure investments may be less liquid, they offer higher long-term return potential. “These investments will positively contribute to enhancing the profitability of SOFAZ’s portfolio in the future,” Shaban emphasized
