Public Debt as a Catalyst for Infrastructure Development in Key Sectors of the Economy: Case Study of Azerbaijan

In the context of Azerbaijan's economic diversification away from oil dependency, the strategic use of public debt has become increasingly significant for financing infrastructure development. This study analyzed how Azerbaijan employs public borrowing to support key infrastructure projects contributing to sustainable economic growth and regional integration. A qualitative research approach was used, examining official reports, international development bank data, and policy documents related to infrastructure financing in Azerbaijan. The findings indicate that public debt is pivotal in funding major national infrastructure initiatives in transport, energy, water, and digital connectivity. Projects such as the expansion of the Baku Metro, highway modernization, renewable energy installations, and the development of the Caspian-Black Sea-Europe Energy Corridor illustrate how debt-financed investments are transforming Azerbaijan's physical and economic landscape. Furthermore, the research highlights Azerbaijan's collaboration with international financial institutions, including the European Bank for Reconstruction and Development, the Asian Development Bank, and the European Investment Bank, which enhances funding capacity and ensures alignment with global sustainability frameworks like the European Green Deal and the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change goals. These efforts have reduced dependency on oil revenues, increased foreign direct investment, improved regional trade links, and strengthened institutional capacity for long-term debt management. Thus, the findings suggest that Azerbaijan's infrastructure development agenda is consciously aligned with broader national strategies that seek to reduce hydrocarbon dependency, expand non-oil sectors, and enhance resilience to economic and environmental shocks. Ultimately, this study's results help to better understand how strategic public debt utilization can accelerate sustainable infrastructure development in emerging economies.