Agreements made by the Islamic Development Bank on Islamic finance in Azerbaijan

On 17 June 2026, the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank, and the Azerbaijan Business Development Fund (ABDF) signed an agreement on the launch of a Sharia-compliant SME financing programme at the Private Sector Forum held as part of the Annual Meeting of the Islamic Development Bank Group in Baku.

Under the programme, the parties agreed to consider the possibility of directing up to 200 million manat to Azerbaijan's private sector over two years, covering 2026–2028.

The programme introduces a new financing channel in the Azerbaijani manat. Under this mechanism, ICD will act as agent (wakil) of ABDF and will combine the Fund's manat resources with ICD's US dollar, euro and manat resources.

These funds will be channelled through the Murabaha mechanism to finance local partner financial institutions. In this way, the foreign currency risk that Azerbaijani SMEs, especially those operating outside major cities, have long faced will be eliminated.

This initiative is ICD's first programme in Azerbaijan to provide manat financing.

As part of the annual meetings of the Islamic Development Bank (IsDB) Group in Baku, another document was signed with the Turkish Investment Fund. Under this agreement, up to 50 million US dollars will be directed to supporting the private sector through an Islamic financing channel in five partner member states, including Azerbaijan. The signed agreement launches the new Managed Islamic Co-Financing Programme (MICFP) - a specialised platform through which the Turkish Investment Fund will carry out co-financing with the Islamic Corporation for the Development of the Private Sector (ICD). Under the Framework Agreement, ICD will act as the agent managing Sharia-compliant financing opportunities in member countries among the Central Asian and Turkic states.