The Azerbaijani government has increased funding for post-war reconstruction and restoration in Karabakh and Eastern Zangezur, allocating AZN 4 billion (USD 2.35 billion) in the 2025 state budget, according to Caspian News.
Azer Amiraslanov, Chair of the Parliamentary Committee on Economic Policy, Industry, and Entrepreneurship, stated this investment aims to foster economic growth, diversify the economy, and boost employment.
Since liberation of the regions in 2020, Baku has spent AZN 17.5 billion (USD 10.3 billion) on reconstruction. Over 8,000 former internally displaced persons (IDPs) have returned, supported by significant government initiatives.
Reconstruction efforts include extensive mine clearance across 161,000 hectares and key infrastructure projects, such as airports in Fuzuli, Zangilan, and Lachin; strategic roads like the Victory Road and Zangezur Corridor; and railway lines including Horadiz-Aghband. Energy projects involve new power stations, solar and wind developments, and gas pipelines. Water infrastructure includes repairing reservoirs and constructing pipelines.
In the social sector, developments include the “Smart Village” in Zangilan, housing for IDPs, schools, hospitals, and socio-economic facilities. Modern agro-parks, industrial parks in Aghdam and Jabrayil, and improved internet connectivity support economic growth.
Damage from Armenian occupation is estimated at USD 819 billion, with USD 265 billion attributed to environmental harm, underscoring the scale of the reconstruction challenge.
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