ADB, Araz Sign $10.5 Million Deal to Sustain Food Security and Farmer Resilience in Azerbaijan

BAKU, AZERBAIJAN (15 November 2024) — The Asian Development Bank (ADB) and Araz Supermarket LLC, a member of the Veyseloglu group, have signed a financial package of up to $10.5 million to help the grocer expand, boosting food security and promoting climate-smart agriculture among smallholder farmers. This financial package includes a $10 million loan for capital expenditures and a $500,000 technical assistance grant.

The loan will enable Araz to expand its dry warehouse and open new stores in and around Baku, including in underserved areas. This will bring around 200 local farmers into Araz's supply chain, create 3,500 new jobs and provide access to affordable, quality food for about 80,000 customers daily. The new facilities will use energy-efficient equipment for cooling, refrigeration, and lighting, cutting annual emissions by about 673 tons of carbon dioxide.

"Modern retail will improve food quality and safety, support food security and climate action, and foster inclusive development as smallholder farmers earn more reliable incomes,” said ADB Director General for Private Sector Operations Suzanne Gaboury. "ADB’s support will help to expedite the expansion of modern retail supply chain in Azerbaijan, which is very efficient in procurement, transport, storage, and distribution."

The grant will support 750 smallholder farmers, mainly from the Lankaran-Astara and Central Aran regions, who grow fruits, nuts, and vegetables. Farmers will receive training in eco-friendly farming, financial management, and gender equality. At least one-third of the participants will be women. The project will also pilot climate-smart model farms.

Most farmers in Azerbaijan are smallholders, who often lack reliable buyers and stable incomes which makes it difficult to invest in practices to adapt to climate impacts. Smallholder farms face even greater challenges to yields and revenues as the climate changes, bringing higher temperatures, water shortages, increased soil salinity, and the emergence of new pests and diseases.

"Araz believes that supporting local farmers is essential not only for our business but also for the communities we serve," said Veyseloglu Group Founder CEO Aydin Talibov. "By partnering on this initiative with ADB, we’re able to expand access to fresh, quality food across Azerbaijan and promote sustainable, climate-resilient farming practices."

Established in 2011, Araz Supermarket operates 235 stores across Azerbaijan and is the market leader in grocery retail, serving nearly half a million customers daily. Araz sources produce from farmers at competitive market prices and helps them through agricultural extension services, including seed selection, fertilization, harvesting, and post-harvesting support. The Veyseloglu group is the market leader in fast-moving consumer goods trading and wholesale distribution, and works with over 12,000 retailers in Azerbaijan.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.