The State Oil Fund of Azerbaijan (Sofaz) inspires both national pride and foreign admiration. Its well-managed hoard of foreign assets grew 11.6% in the year to June 30 2019, to reach $42.46bn – equivalent to three-quarters of Azerbaijan’s gross domestic product. In two decades of operation, assets under management have increased 157-fold, making Sofaz the 28th largest sovereign wealth fund.
Sofaz assets underpin Azerbaijan’s strong fiscal balance sheet, the main support for Azerbaijan’s sovereign ratings. Its main expenditure is annual transfers to the state budget, totalling $95.6bn. Sofaz also finances strategic infrastructure, such as oil, gas and water pipelines, and the Baku-Tbilisi-Kars railway.
