UNDER THE SIGN OF GARABAGH

Last year will go down in history of Azerbaijan as a period of recovery from the pandemic crisis, growth of the non-oil economy, industrial production, and exports. In parallel, the most crucial events that determined the long-term development trends in Azerbaijan in 2021 were the works implemented under the state program for the restoration of territories in the Garabagh and East Zangezur economic regions liberated from the Armenian occupation. In 2021, Garabagh saw the large-scale construction of road and energy facilities, commissioning of an international airport in Fuzuli, restoration of communication lines and the Internet, reconstruction of hydroelectric facilities, as well as the ongoing construction of several industrial clusters and settlements, etc.

State funding

In line with the Concept for Restoration and Development of the Liberated Territories of Azerbaijan developed at the beginning of 2021, the entire work plan was divided into four stages. The most important component of the first stage, along with works on demining of the territory, was the construction of highways and development of all the necessary transport, energy, and utilities infrastructure to provide a foundation for further socio-economic revival of the region. For objective reasons, the lion’s share of restoration and infrastructure works during the first stage was funded from the state budget, including for the provision of technical resources from state companies and departments.

Construction of highways, railway communications, airports, restoration of power lines and substations and other infrastructure facilities included not only state-run companies but also local and international private organisations. Thus, it was possible to create a competitive environment during the tender process, reduce financial and technical expenses during construction, introduce modern technologies, and ensure high-quality and timely execution of contracted works. It is planned to use this experience in the next stages of restoration works. State-private partnership will be also used in the implementation of both infrastructure and investment projects.

“Restoration of the historical appearance of the liberated territories, cultural and historical monuments, construction of highways, power and water lines continues at a rapid pace. Restoration of Garabagh will be the main priority of Azerbaijan’s development in 2022. Therefore, ₼2.2 billion will be provided from the state budget for these purposes,” Azerbaijani Finance Minister Samir Sharifov said.

Road communications

Restoration of transport communications finished in under a year has been really impressive. In total, more than 700 kilometres of roads have been constructed and re-constructed in Garabagh today.

Almost immediately after the conclusion of the trilateral agreement between Armenia, Azerbaijan, and Russia, Azerbaijan began the construction of the 101.9-kilometer Victory Road to Shusha. The four-lane Ahmedbeyli-Alkhanli-Fuzuli-Shusha highway was put into operation in less than a year (end of October 2021). The works have been implemented using the highest level of quality and safety standards. Presently, intensive construction of the second 81.6-kilometre highway to Shusha is underway. Due to the construction of bridges and tunnels, it will be 20 km shorter. The second road is slated for completion in 2024. Thus, Shusha will get the shortest access to the international Zangezur highway connecting Azerbaijan with Armenia.

The main focus of road builders is on the southern section of the liberated territories, including the roads connecting to the future Zangezur corridor. In particular, four traffic lanes of the 56.4-kilometre Khudaferin-Gubadly-Lachin I highway are being asphalted. The 14-kilometre section of the Khanlyg-Gubadli road (under construction) connects to this one too.

The laying of asphalt-concrete surface began on another branch of the Zangezur corridor—the Shukurbeyli-Jabrayil-Hadrut highway (category I), which is 40-km long and connects about 20 settlements. A 13-km section of the road running from Fuzuli will connect to Hadrut from the east. More than a third of the road construction works on the Khudaferin-Gubadly-Lachin highway with a length of 70.4 km has also been completed.

Since October 2021, the roadbed of the Zangezur corridor has been completed at a high rate. This will include three road tunnels and earthworks on the Goradiz-Jabrayil-Zangilan-Aghbend highway (123.8 km). The highway passes through the territory of Fuzuli, Jabrayil, and Zangilan districts and will play an important role in the socio-economic development of the East Zangezur economic region. It will contribute to the early restoration of the liberated regions and villages, not to mention the growth of transit cargo transportation and direct transport access to the Nakhchivan Autonomous Republic.

Large-scale road construction works are also underway in the west of Garabagh. The construction of an 80.7-kilometre tunnel from the village of Toghanaly in the Goygol district connecting to Kalbajar continues. This route will extend for another 72.3 km through the territory of the Lachin district to the airport planned to be constructed here. On some sections of the Toganaly-Kalbajar highway, the road will run at an altitude of 3,500 meters MSL, which will hinder traffic in the winter months. Thus, it is planned to build several long tunnels.

The central part of the region is also covered by important road projects. The construction of the 44.5-kilometre Barda-Aghdam highway has been completed by more than 60%. Design works will soon be completed leading way to the construction of the 70-kilometre Aghdam-Fuzuli road. Another 22-kilometre road project Talish-Tapgaragoyunlu-Gashalty-Naftalan is underway.

Currently, the design of the railway section of the Zangezur corridor to the border with Armenia is in full swing. Moreover, as part of this project, a new 260-metre railway bridge across the Kura River is constructed on the Alat-Horadiz-Aghbend line. Also, preparations have started for laying a railway line from Yevlakh to Aghdam, which will contribute to the transformation of the industrial zone being created in Aghdam and adjacent territories into an industrial and logistics hub of the region.

Air gate

Restoration of the road and transport infrastructure, which has been almost completely destroyed by the Armenian invaders, is a key task ensuring the speedy revival of Garabagh. Located in the complex mountainous terrain of the Lesser Caucasus, the region is inaccessible without a high-quality and extensive road and rail network. Otherwise, it is simply impossible to quickly rebuild cities and villages, construct agricultural and industrial facilities.

Turkish companies also involved in all other infrastructure projects in the liberated territories take an active part in the road construction projects together with Azerbaijani companies. They also joined the construction of the Fuzuli international airport. In the future, they will build another two similar facilities in the districts of Zangilan and Lachin.

Remarkably, the Fuzuli international airport commissioned on October 26, 2021 is capable of receiving 200 passengers per hour and aircraft of any type thanks to its 3-km runway. Azerbaijani and Turkish airlines have already flown there in test mode. Recently the Russian airline IrAero received permission from the Federal Air Transport Agency to fly on the Moscow-Fuzuli route. In the future, the Fuzuli airport dubbed the ‘Air Gates to Garabagh’ will become a key facility contributing to the development of tourism in the region.

Large-scale works are also underway to restore the region's energy and communication infrastructures. Fixed and mobile communication systems are restored, including base stations of cellular communication in Shusha, Aghdam, and a number of other districts, thanks to which 52% of the liberated territories are provided with mobile Internet today.

Energy hubs: lighting and heating

The most intensive activities are taking place to restore from scratch the destroyed power infrastructure in the region. According to the head of Azerenerji OJSC Baba Rzayev, in 2021, a few 110/35/10kV substations with a total capacity of 600MV/A have been constructed in the liberated territories, including 400 km of 110KV power lines. Azerenerji also plans to create an power hub in Jabrayil. The project will help the integration of the Khudaferin and Gyzgalasy HPPs bordering with Iran into Azerbaijan’s energy grid to ensure reliable energy supply to the Garabagh and East Zangezur economic regions.

According to Mr. Rzayev, his organisation carried out a series of works to restore and upgrade the hydropower facilities with small hydroelectric power stations destroyed by the Armenian invaders in Garabagh. In particular, an HPP with a capacity of 8MW has been commissioned in the village of Gulaburd, Lachin; Sugovushan-1 and Sugovushan-2 HPPs with a capacity of 7.8MW have been commissioned too. A 4MW HPP in Kalbajar is currently being tested. These projects will continue in 2022. Later, it is planned to restore about 23 destroyed smaller HPPs with a total capacity of 130 MW in Kalbajar and Lachin.

Together with hydropower resources, it is planned to exploit solar and wind potentials to turn the region into a zone of green energy. A number of foreign investors are showing interest in projects for the development of renewable energy sources (RES) in Garabagh. Thus, the Turkish business is considering to build a 100MW wind farm in the Lachin-Kalbajar zone, while British BP intends to build a 240MW solar power plant in the Zangilan-Jabrayil zone.

Agricultural and industrial potential

Despite the ongoing demining works and construction of primary infrastructure in Garabagh, a number of projects have already started to form the future agro-industrial base of the liberated territories.

In the first third of 2021, the Azerbaijani government signed a contract with Turkish companies EtiBakırAS and ArtvinMadenIsletlemeri on the joint development of deposits of precious and non-ferrous metals. The agreement also includes the development and operation of the Gashgachay, Elbeydash and Aghduzdagh deposits in Garabagh for 30 years. By the way, up to 100 gold-bearing seams have been discovered at the Aghduzdagh mine of the Kalbajar district.

In 2H2021, works on the development of the infrastructure of the Aghdam Industrial Park began. In the coming years, the park will attract investments in the amount of ₼110 million to ensure the production of building materials, feed, fertilisers, packaging materials, as well as wines, canned food, meat, and dairy products, etc. In the future, Aghdam is going to become as a leading industrial centre of Garabagh. Currently, preparations are underway to launch large-scale works on urban planning, as well as the construction of houses, schools, administrative buildings, etc.

Last autumn, construction works at the Araz Valley Economic Zone industrial park in Jabrayil began. The zone will attract local and foreign investments for the production of agricultural products, processing of mineral and other raw materials, production of construction materials, etc.

In the Zangilan district, the foundation of the Dost agro-park has been laid. It is planned to be the largest livestock facility in the region and will cover an area of 6,000 hectares, including an integrated meat processing and packaging enterprise and warehouses.

Another innovative project is implemented in the village of Aghaly, Zangilan. The area of 110 hectares will be covered with 200 houses, a school and a kindergarten using environmentally friendly and innovative materials. As part of this Smart Village project, a data and analytical centre, a smart system for managing irrigation systems, and sown area are created. In the future, automated farms and processing workshops will be built and drones will be used to control crops and pollination. Agriculture potential will also be improved in the village of Dovletyarly, Fuzuli, where the foundation of the second smart village has been laid. Solar panels for alternative energy solutions will be installed in the village too. “Smart aquaculture systems will be developed in the village. We plan to create export-oriented fish and poultry farms here too,” Minister of Agriculture of Azerbaijan Inam Kerimov said during the scientific-practical conference Garabagh: A New Panorama of the South Caucasus Opening to the World.

Thus, in parallel with infrastructure projects in the liberated territories, the government creates a kernel of future industrial clusters, elements of renewable energy sources and smart agricultural technologies in the region. This contributes to attracting labour resources to Garabagh and increasing the volume of non-oil production. Moreover, a considerable portion of the manufactured products will be exported to Turkey as well.

"Revival of Garabagh will become an additional driver for the development of the Azerbaijani economy. We are doing a great job to attract investors to restoration works," Azerbaijani Minister of Economy Mikayil Jabbarov said. According to minister, the number of investment solutions for the restoration and development of the economy in the liberated territories already exceeds 900. Also, in order to expand investment proposals, the government is considering the introduction of additional tax preferences, concessional funding, etc.