BAKU — Azerbaijani and Georgian leaders recently visited Abu Dhabi as the United Arab Emirates seeks to strengthen its business ties with the South Caucasus. Business thrives on stability, however, and the ongoing political uncertainty in Georgia remains a significant impediment.

Last month, Azerbaijani President Ilham Aliyev paid an official visit to Abu Dhabi, where he met with his Emirati counterpart, UAE President Sheikh Mohamed bin Zayed Al Nahyan. The discussions focused on the tourism, investment and energy sectors. In recent years, Azerbaijan and the UAE have developed a unique dimension of cooperation through the COP Presidencies Troika, which includes the UAE, Azerbaijan and Brazil. The Troika aims to implement progressive climate action and work on the Mission 1.5°C roadmap. In turn, this has stimulated cooperation between Baku and Abu Dhabi in the renewable energy field.

Indeed, both nations’ involvement in the Israeli energy sector has drawn interest. Joint renewable energy projects are progressing, with the UAE investing in the construction of renewable power plants in Azerbaijan — an integral part of Baku’s strategy to export green energy to Europe via the Black Sea submarine cable (BSSC) project. This initiative, backed by an agreement between Azerbaijan, Georgia, Romania and Hungary, with EU support, underscores Azerbaijan’s commitment to sustainable energy. To further enhance economic cooperation, Azerbaijan and the UAE are working on a Comprehensive Economic Partnership Agreement. The deal is intended to enhance the bilateral ties through “trade liberalization, increasing investment flows, and expanding access to goods and services markets.” No specific details of the agreement have been provided, although a Joint Investment Fund of $1 billion was established in 2023.

Neighboring Georgia, Azerbaijan’s long-term strategic partner, already signed and implemented a CEPA with the UAE last year. During Georgian Prime Minister Irakli Kobakhidze’s visit to Abu Dhabi on Jan. 27, a memorandum of understanding was signed for a $6 billion investment agreement with UAE-based Emaar Group. The deal, aimed at development projects in Tbilisi and the Ajaria region along the Black Sea coast, is significant for Georgia, whose gross domestic product stands at approximately $30 billion. Moreover, Georgia remains a favored destination for Gulf tourists, with a 40% surge in the first half of 2024. In particular, Georgia was the second-most popular destination for Saudis, after the UK, in 2024.