Home Azerbaijan Economy Transformation in Azerbaijan's Nakhchivan changes economic prospects for entire region Economy Materials 12 August 2026 21:00 (UTC +04:00) Gulnara Rahimova Read more 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. “Substant
