2024-07-19 05:09:22
In 2024, Azerbaijan declared the “Year of Solidarity for a Green World” and hosted prestigious events such as COP29, highlighting the relevance of the green economy concept.
The Agency for Development of Small and Medium Entrepreneurship under the Ministry of Economy plays a crucial role in enhancing the role of SMEs in green economy initiatives. Until 2030, the agency supports the development of alternative energy in Azerbaijan within the framework of national priorities.
KOBIA actively promotes the participation of companies involved in green energy, waste recycling and circular economy in various local and international exhibitions, thereby promoting their activities.
Small and medium enterprises (SMEs) play a significant role in various sectors of the economy. In recent years, we have seen the development of SMEs in the green economy sector.
As reported by Day.Az, in his commentary to Azernews on this issue, economic expert Khalid Karimli emphasized the high value of SMEs in the field of employment, emphasizing that such enterprises play a decisive role in economic growth.
“SMEs primarily contribute to the solution of employment issues and play a decisive role in exports. They participate in the solution of social issues within the economy. The Azerbaijani government provides incentives to micro and small entrepreneurs, including those working in technology parks. For example, a special tax – In the FEZ “Alat” free regimes have been established for entrepreneurs,” the expert noted.
It should be noted that the support and services provided to SMEs cover the entire process from business creation to its development. This includes various tax and customs benefits, infrastructure support, institutional support measures, preferential loans, subsidies and much more. The Agency for the Development of Small and Medium Entrepreneurship (KOBIA) pays special attention to improving state policy in the industry, increasing the effectiveness of measures implemented and providing institutional support to facilitate the creation of new SMEs and support the development of existing businesses.
In addition, the Medium-Term Strategy for Socio-Economic Development prepared within the framework of “Azerbaijan 2030: National Priorities for Socio-Economic Development” defines small and medium entrepreneurship as a strategic goal to become the main source of economic growth and employment in the country.
The Law on Economic Priorities, approved by the Resolution of the Cabinet of Ministers of February 5, 2024, provides for ongoing support for small and medium-sized businesses in accordance with the list of priority areas of the economy, state priorities in the field of entrepreneurship and international calls related to SMEs.
According to Khalid Kerimli, small and medium-sized businesses can support green economy efforts by addressing their business challenges, increasing resource efficiency and minimizing environmental impact to support sustainable economic growth.
“In the renewable energy sector, SMEs can compete with large corporations, but they cannot play a driving role in this sector,” the expert added.
“SMEs can also play a role in providing employment, addressing social issues and addressing national environmental issues through tax payments. These enterprises can contribute to sustainable economic growth by ensuring environmental friendliness in their operations and efficient use of resources,” the expert said.
It is worth noting that, in general, ESG (environmental, social and governance) principles are the focus of KOBIA. Component E assesses how conscientiously a company treats the environment, including its corporate climate policy, energy use, waste management and measures to preserve natural resources. The other two ESG components, S and G, cover the company’s relationships with employees, suppliers and customers, the use of accurate and transparent accounting in the selection of management and responsibility to shareholders.
Legal incentives, privileges and support measures are considered for each ESG component. For example, incentives for environmental protection include exemption of electric and hybrid vehicles, as well as buses running on compressed natural gas, from additional value added tax (VAT). In addition, there are tax incentives for the production and import of equipment in the field of renewable energy and the use of renewable energy sources.
The creation of the Balakhani Industrial Park based on the Presidential Decree of May 4, 2011 is aimed at reviving production in the country. Residents of the park are exempt from land, property and profit taxes for a period of 10 years. At the same time, according to the Tax Code, equipment imported on the basis of a supporting document from the relevant executive authority is exempt from taxes for 10 years from the date of registration in the industrial and technological park.
In conclusion, Azerbaijan’s SME promotion and green economy initiatives reflect a holistic approach to sustainable development. By supporting SMEs in adopting environmentally responsible practices and stimulating innovation, Azerbaijan is poised to achieve long-term economic growth while addressing pressing environmental and social challenges. These measures illustrate Azerbaijan’s commitment to promoting sustainable economic development through active support for small and medium-sized businesses and green initiatives.