A sovereign wealth fund built on hydrocarbons is helping power Europe’s clean energy transition.
The State Oil Fund of the Republic of Azerbaijan (SOFAZ) has acquired a 49% stake in a portfolio of solar power plants in Italy, marking a shift in Azerbaijan‑Italy energy ties from traditional pipelines to long‑term renewable partnerships.
For decades, energy cooperation between Azerbaijan and Italy was defined by hydrocarbons and pipelines. This new deal, observers say, signals a new chapter – from molecules to electrons, with Italy securing alternative sources of energy sold under long‑term power purchase agreements, a model that ensures stable tariffs for consumers and predictable, inflation‑linked income streams for investors.
The portfolio, owned and operated by Enfinity Global, spans 14 solar plants in the Lazio and Emilia Romagna regions. Once fully operational, the sites are expected to generate about 685 million kilowatt hours of clean electricity a year – enough to meet the annual needs of nearly 250,000 Italian households and offset around 184,950 tons of CO₂‑equivalent emissions.
A milestone for Azerbaijan-Italy ties
The agreement was formally marked in Rome on 18 July 2025, with Italian government officials, diplomats and industry leaders in attendance.
Israfil Mammadov, Executive Director of SOFAZ, said the collaboration “supports the delivery of competitive clean energy to meet Italy’s growing energy needs while contributing to local economic development and energy access. As a forward‑looking institutional capital provider, we remain committed to supporting strategic investment opportunities in Italy and across Europe”.
Carlos Domenech, CEO of Enfinity Global, called it “a proud moment to add new energies to a historic relationship built on gas and oil supply”.
A long‑term global investor
Celebrating its 25th anniversary last year, SOFAZ manages over €66 billion in assets, more than 90% of Azerbaijan’s GDP, and reported a 6% investment return in 2024. Its portfolio spans more than 50 countries and sectors from infrastructure and real estate to private equity and fixed income, reflecting an adaptive strategy shaped by trends such as the energy transition and digitalization.
Italy is already SOFAZ’s fourth‑largest investment destination, with nearly €3 billion deployed across traditional and alternative asset classes. The solar deal expands that footprint and reinforces SOFAZ’s commitment to infrastructure and long‑term real assets in Europe.
Powering Europe’s energy transition
The investment also supports Italy’s national decarbonization efforts and the European Union’s REPowerEU initiative, which seeks to cut reliance on imported fossil fuels and accelerate the switch to renewables.
By backing a 402 MW solar portfolio in Italy, SOFAZ is not only diversifying its own returns but also helping Europe build a more resilient, low‑carbon energy system.
For Azerbaijan’s sovereign wealth fund, built on the revenues of oil and gas, the message is clear: its future, and its investments, are increasingly tied to clean energy.
