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.
