Azerbaijan, BlackRock and the new geopolitics of infrastructure [OpED]

In Davos, where global capital tends to sniff out the future
before it becomes obvious, Azerbaijan has made a telling move. On
the margins of the World Economic Forum, President Ilham Aliyev met
Larry Fink, BlackRock’s chief executive, and Adebayo Ogunlesi, the
founder of Global Infrastructure Partners (GIP), to formalise what
Baku hopes will be more than a financial partnership. The
memorandum of intent signed between the State Oil Fund of
Azerbaijan (SOFAZ), BlackRock and GIP signals a strategic wager:
that infrastructure, digital as much as physical, will define the
country’s next phase of relevance.

At first glance, the numbers are modest by BlackRock standards.
SOFAZ is considering commitments of up to $1.5bn over the next
three to four years, a rounding error for a firm that now oversees
around $14trn in assets following its acquisition of GIP in late
2024. Yet scale is not the point. What matters is access, to
capital, to operating expertise and to the institutional discipline
that global infrastructure investors increasingly demand.

BlackRock, the world’s largest asset manager with roughly $14
trillion under management, has in recent years pushed deeper into
private infrastructure markets. Its acquisition of GIP, formed in
2006 and notable for stakes in London Gatwick and other major
airports, signalled not just scale but operational muscle.

That muscle is now flexing around digital and energy
infrastructure. Investment vehicles such as the AI Infrastructure
Partnership, which includes BlackRock, GIP, Microsoft, Nvidia, and
Abu Dhabi’s MGX, are mobilising tens of billions, potentially
hundreds, to build data centres and supporting power networks to
fuel artificial intelligence growth. Deals reported on the order of
$40 billion for operators like Aligned Data Centers illustrate just
how capital-intensive the digital future has become.

For a country perched at the nexus of Europe and Asia, this
global shift presents a rare opportunity. Azerbaijan’s old
narrative was framed by oil and gas; the new one is being written
in bits and bytes. Under the Davos agreement, SOFAZ will explore
investments not only in global infrastructure funds managed by GIP,
but in data centres and cloud infrastructure that could serve the
wider region, a recognition that the next frontier of growth lies
in connectivity and computing power, not barrels.

For Azerbaijan, this aligns neatly with its own ambitions. Long
defined by hydrocarbons and transit corridors, the country is now
positioning itself as a regional platform for digital connectivity.
Among the priority areas under discussion with GIP are data centres
and supporting infrastructure capable of serving not just domestic
demand but a wider regional cloud and AI market. Energy-hungry
servers, after all, need reliable power and stable grids, two
assets Azerbaijan is keen to market alongside its geography.

The partnership sits on an existing foundation. SOFAZ’s earlier
co-investment with GIP in London’s Gatwick Airport, a £50 million
investment already at stake in one of Europe’s busiest gateways,
hinted at the fund’s evolving strategy of diversifying beyond
hydrocarbons into assets that combine durability with strategic
relevance.

GIP’s track record is similarly broad: from transport hubs to
energy networks and digital platforms, its expertise in managing
complex infrastructure assets will be a resource for Baku as it
seeks to marry physical connectivity with digital resilience.

Crucially, the memorandum foresees the creation of sectoral
working groups, technical sessions and expert exchanges, the
scaffolding upon which the realisation of multi-billion-dollar
projects will likely depend. These mechanisms are not novel in
theory, but they signal an intention to mirror international
operating standards rather than pursue isolated domestic
projects.

The broader context makes this cooperation more than a Davos
photo-op. Across global capital markets, infrastructure is being
rethought as a tactical asset class. Governments are struggling
with budget constraints, and private capital increasingly funds
everything from fibre networks to renewable grids. BlackRock’s push
into infrastructure, amplified by its acquisition of GIP, which
manages over $100 billion in infrastructure equity and credit,
reflects confidence in long-term returns from essential assets.

For Azerbaijan, the strategic calculus is clear: aligning with a
global institutional investor enhances risk management, governance
discipline, and access to co-investment partners. It also signals
to other investors that Baku is open for serious business, not just
in hydrocarbons and transport corridors, but in sectors tied to the
digital economy.

There are potential pitfalls. Mobilising capital across borders
requires navigational skill in regulatory, political and market
risks, especially for projects intended to serve multiple
jurisdictions. The risk, as ever, is that ambition outruns
execution, a familiar Davos problem. But in an era when sovereign
wealth funds increasingly compete for influence through
infrastructure rather than arms or pipelines, Azerbaijan’s move is
less surprising than it might once have been.