BAKU, Azerbaijan, August 12. The allocation of
258 million manat ($151.8 million) for the development of
Nakhchivan marks the start of a new phase of investment aimed at
strengthening the region’s energy, transportation, industrial, and
social infrastructure.
President Ilham Aliyev’s decree on measures to accelerate the socioeconomic
development of the Nakhchivan Autonomous Republic is a continuation
of a large-scale program aimed not only at modernizing individual
facilities but also at establishing a sustainable economic
foundation for the region.
The allocated funds will be directed toward the development of
renewable energy, road infrastructure, education, public
transportation, housing, and public utilities in 2026–2027. Thus,
the new investment package marks the next phase of the state’s
policy for the comprehensive development of Nakhchivan.
The decree itself notes that Nakhchivan holds a special place in
the economic, political, and cultural life of the Republic of
Azerbaijan and plays an important role in the development of
Azerbaijan. The decision to allocate funds is a continuation of the
State Program for the Socio-Economic Development of the Nakhchivan
Autonomous Republic for 2023–2027 and other ongoing projects,
including the creation of the Nakhchivan Industrial Park, the
development of energy infrastructure, and the expansion of
transportation capabilities.
President Ilham Aliyev previously noted that the autonomous
republic’s development will continue based on a long-term approach.
“Nakhchivan’s rapid development will continue, including through
the implementation of the State Program, which was also adopted by
my Order. The export of very large volumes of electricity from
Nakhchivan will also be envisaged,” the head of state said in an
interview with Azerbaijani Television in Nakhchivan.
Energy Is Becoming the Foundation of a New Stage of
Development
Energy will be one of the key areas of the new investment
package. A total of 66 million manat ($38.8 million) will be
allocated to continue construction of the 15.6-MW “Tivi”
hydroelectric power plant.
This project will be part of broader efforts to strengthen
Nakhchivan’s energy independence. Projects in the field of
renewable energy are already underway in the autonomous republic,
including the construction of the “Shams 1” and “Ufug” solar power
plants with a combined capacity of 50 MW, as well as the 36-MW
“Ordubad” hydroelectric power plant.
At the same time, there are plans to build a 300-MW thermal
power plant in the Nakhchivan Industrial Park. This will
significantly increase the autonomous republic’s existing power
generation capacity.
President Ilham Aliyev noted that the new thermal power plant
must address two objectives at once. “At the same time, as an
integral part of this Park, a 300-megawatt thermal power plant will
be constructed. I should mention that Nakhchivan’s current
generation capacity is approximately 200 megawatts. Thus, the
capacity of this single power plant will be one and a half times
Nakhchivan’s current generation capacity. Naturally, this plant
will serve two purposes: first, to ensure a reliable and
sustainable energy supply for the Nakhchivan Autonomous Republic;
and second, to facilitate electricity exports,” he said.
At the same time, the focus is not solely on traditional power
generation. Nakhchivan is gradually building its own renewable
energy infrastructure, with government projects already being
supplemented by private investment. “Nakhchivan’s solar energy
potential is immense. Based on monitoring and detailed analysis,
Nakhchivan is the most favorable location in Azerbaijan for solar
power generation. Therefore, an area of more than 600 hectares has
already been designated, where solar power plants with a total
capacity of hundreds of megawatts will be constructed,” the head of
state noted.
According to him, the economic appeal of such projects is
already becoming a factor for investors. " It is gratifying that,
as a rule, the private sector is taking an active role in the
development of renewable energy sources here. The information
presented to me today shows that these projects are economically
attractive, in other words, profitable, for investors,” President
Ilham Aliyev said.
The issue of exports is becoming even more important. According
to President Ilham Aliyev’s assessment, the potential capacity for
solar power generation in Nakhchivan is significantly higher than
that of the projects already underway. “I believe that solar power
generation in Nakhchivan alone could amount to at least 500
megawatts, at a minimum. Perhaps even 1,000 megawatts. The main
issue here is export capacity,” the head of state noted.
He also pointed out the existing limitations of the energy
infrastructure and the need to expand it. “Naturally, there are
currently power lines connecting Nakhchivan with both Iran and
Türkiye, but their capacity is somewhat limited. That is to say, to
export 500 megawatts or even 1,000 megawatts of electricity, there
are currently two directions for exports: one to Türkiye and one to
Iran. In the future, Europe could also become a destination,” he
said.
Thus, energy policy is gradually changing the very economic
logic of the region: Nakhchivan must not only meet its own needs
but also gain the ability to access external markets.
Infrastructure Creates Conditions for
Growth
A significant portion of the new funding will be directed toward
upgrading transportation infrastructure. The decree allocates 70
million manat ($41.1 million) for the major repair of 420
kilometers of inter-settlement, urban, and rural roads that connect
26 settlements with a total population of 156,300 people.
President Ilham Aliyev has previously spoken about the need to
address this very issue. “Substantial funds were also invested in
the road infrastructure of the Nakhchivan Autonomous Republic in
previous years. You also saw the condition of the roads; they are
in good condition. However, there are village roads and roads that
are still in poor condition, and the necessary assessments have
been carried out: the construction and major rehabilitation of
roads in various categories with a total length of approximately
420 kilometers are planned. The population of these 26 communities
is approximately 160,000 people. This issue will be resolved,” he
said.
At the same time, the intercity public transportation fleet will
be modernized. An initial budget of 53 million manat ($31.1
million) has been allocated for these purposes.
The President Ilham Aliyev stated that this is part of a larger
public transportation modernization program. “I know there is still
a problem with intercity and interdistrict transport. Instructions
have been given to procure 217 modern interdistrict buses to be put
into service on the routes this year and next year,” President
Ilham Aliyev noted.
In the city of Nakhchivan itself, the effort to modernize public
transportation is already at a different stage. Electric buses have
been purchased here, and the city’s public transportation system is
being transitioned to a more modern operating model. “ The
transport problems of Nakhchivan city have been resolved. Today,
new electric buses were presented, and they will likely be put into
service as of tomorrow. We frequently see these green buses on the
streets of Baku. The old buses have been completely
decommissioned,” President Ilham Aliyev said.
Transport infrastructure is also significant from the
perspective of Nakhchivan’s broader economic situation. Work is
continuing in the region to restore rail connections, which, in the
long term, should expand the autonomous republic’s participation in
regional routes.
According to the President of Azerbaijan, the existing railway is
currently capable of transporting about 1.5 million metric tons of
cargo, but this is insufficient for the region’s future
transportation potential. “But our goal is to have at least 15
million tons of cargo transit through this transport corridor. For
that to happen, the existing railway must be reconstructed and
rehabilitated,” he said.
Investments in Industry and Human Capital
The new wave of investment is also aimed at creating conditions
for the development of manufacturing and increasing employment.
One of the key projects will be the Nakhchivan Industrial Park,
which is expected to serve as a new hub for entrepreneurship and
industrial projects. President Ilham Aliyev associates this project
not only with manufacturing but also with the creation of new jobs.
''To address unemployment. In particular, as I mentioned, the
creation of the Nakhchivan Industrial Park will give a major
impetus to this effort. The creation of modern industrial complexes
in Nakhchivan is envisaged,” the head of state said.
At the same time, the industrial park will be linked to
Nakhchivan’s energy development. The planned 300-MW thermal power
plant is expected to provide the additional power generation needed
for both industry and potential exports.
The social component also remains part of this investment model.
A 1,000-bed dormitory will be built at Nakhchivan State University,
and five new kindergartens with a total capacity of 640 children
will be established in various districts of the autonomous
republic. In addition, plans call for the major renovation of 92
residential buildings with a total of 2,164 apartments, the
renovation of the facades of another 70 buildings, and the repair
of 45 boiler rooms serving more than 5,000 apartments.
Thus, this is not merely a matter of investing in physical
infrastructure. The modernization of housing, education,
transportation, and public utilities should create the conditions
for economic growth to be accompanied by an improvement in the
quality of life.
From Infrastructure Investment to an Investment-Driven
Economy
The main impact of the new package is that individual projects
are beginning to function as components of a single economic
system.
The energy sector allows Nakhchivan to shift from addressing
domestic supply needs to potential exports. Roads and rail
infrastructure are improving the region’s connectivity. The
industrial park creates a platform for private capital and new
manufacturing facilities. Educational and social projects foster an
environment conducive to population growth and employment.
President Ilham Aliyev directly links the development of the
energy sector to Nakhchivan’s future economic growth. “ As I noted,
the primary issues were security matters, and these have been
resolved. Then there was energy security, and for the Nakhchivan
Autonomous Republic, this issue has also been resolved. Now, the
focus is on Nakhchivan becoming an energy exporter,” he
emphasized.
It is precisely this transition from meeting basic needs to
building export capacity that could become the main economic
outcome of the new wave of investment.
This involves several areas simultaneously. Electricity can
become an export product, the industrial park can serve as a
platform for localizing production, transportation infrastructure
can form the basis for trade growth, and the modernization of roads
and public transportation can boost domestic mobility.
As a result, the 258 million manat ($151.8 million) should yield
benefits that extend beyond the amount of the funding itself.
Government investments create the infrastructure necessary for the
next phase, attracting private capital and expanding economic
activity.
For Nakhchivan, this means a transition from a model focused
primarily on infrastructure restoration and modernization to one in
which the infrastructure itself becomes the foundation for new
investments.
This is precisely why the new wave of investment could lead to
the development of a more diversified economy in Nakhchivan: one
with its own energy base, industrial production, an expanding
transportation system, and a growing services sector.
In the long term, this could also change the autonomous
republic’s role in Azerbaijan’s economy. Nakhchivan will have the
opportunity not only to overcome infrastructure constraints but
also to leverage its energy, transportation, and geographic
advantages to attract businesses and gain access to foreign
markets.
