Azerbaijan: Aghdam’s path to modernisation From industrial park to agro-town

For the sixth year now, Azerbaijan has been implementing a large-scale programme to revive the territories of the Karabakh and East Zangezur economic regions, liberated from occupation. In particular, reconstruction efforts in the Aghdam district are progressing at a rapid pace: the Aghdam Industrial Park is already operational, and the area is planned to become the region’s agro-industrial and logistics hub.

Another step in this direction was taken on April 6 with the signing of a memorandum of understanding and cooperation in the field of construction between the Belarusian state enterprise Belstroycenter and the Azerbaijani company IMA-ENERGY LLC, aimed at launching the construction of an agro-town in the Aghdam district.

A key objective of the “First State Programme on the Great Return to the Territories of Azerbaijan Liberated from Occupation” is the restoration of Azerbaijani cities and villages, alongside the construction of housing, social facilities, and transport, energy, and public utilities infrastructure.

An equally important priority is attracting private investment to the liberated territories and launching agro-industrial clusters, as well as developing trade, service, tourism, and other non-oil sector enterprises.

Together, these efforts are driving job creation, which in turn will accelerate the return of former internally displaced persons and other citizens to the region.

Intensive efforts are underway in Aghdam, liberated from occupation, to restore its former significance as the second-largest city in western Azerbaijan after Ganja. Over the past period, large-scale demining operations have been carried out across the city and its surrounding villages, alongside the development of energy, transport, and public utilities infrastructure. In several settlements, reservoirs are being constructed, hundreds of artesian wells have been drilled, and sewage systems are being established.

To accelerate the return of residents, nearly 10,000 apartments in both multi-storey and low-rise buildings are set to be completed in Aghdam by 2027. Similar housing development is underway in the district’s villages, with plans to resettle around 42,000 people in both the administrative centre and surrounding areas in the medium term.

In line with plans to transform Aghdam into a regional industrial hub and attract international investors, high-standard hospitality infrastructure is also being developed. In 2024, the Aghdam City Hotel was opened, followed by the launch of the Hilton Garden Inn Aghdam last year, with additional hospitality facilities currently under construction.

Equally strong progress is being made in developing the industrial potential of the Aghdam agglomeration. Positioned as the industrial hub of the entire Karabakh region, the city now leads in terms of capital attracted to manufacturing projects. At the heart of this system is the Aghdam Industrial Park, launched in May 2021. Covering 190 hectares, the site has undergone extensive development, including the construction of energy, public utilities, and transport infrastructure, as well as communications and internet networks.

A key advantage of the cluster is its strategic location near major road and rail junctions, significantly facilitating the transport of raw materials and the distribution of finished products. As a result, businesses are provided with state-funded, ready-to-use infrastructure, enabling them to implement projects immediately on a “plug-and-play” basis.

All these factors, combined with extensive tax and customs incentives, as well as utility and rental benefits, have created a highly favourable business environment, attracting investors to the area.

According to data published recently by the Economic Zones Development Agency (EZDA) under Azerbaijan’s Ministry of Economy, 149.7 million manats ($87 million) have been invested in the Aghdam Industrial Park. Thirty business entities have been granted resident status, while five entrepreneurs hold non-resident status. As of today, the country’s second-largest industrial park has created around 1,000 permanent jobs. In the near future, with the commissioning of more than three dozen industrial enterprises, a total of 2,400 new jobs are expected to be generated.

Currently, 13 enterprises are operating in the park, producing electrical distribution equipment, power outlets, and concrete substations; roofing and façade materials; ventilation and fire-safety equipment; various metal products; automation and telemechanics systems; porous construction blocks; as well as furniture, wallpaper, footwear, and tobacco products. In the near term, a private Chinese investor plans to launch Fujiai Azerbaijan, a factory producing elevators and escalators from imported components.

Notably, products manufactured in the Aghdam Industrial Park are successfully exported abroad in addition to supplying the domestic market. Expanding into international markets and delivering competitive non-oil products has been identified as a key goal in developing industry in the liberated territories. In this regard, the Export and Investment Promotion Agency (AZPROMO) has developed the trademark project Made in Karabakh – Heart of Azerbaijan, along with the rules for its use, which have been prepared and submitted to the relevant authorities.

Historically, Aghdam was one of the centres of agricultural production and processing, renowned for its vineyards and numerous winemaking enterprises. Today, the region’s agricultural potential is still hindered by the devastating legacy of war—mines and unexploded ordnance. Over the past years, more than 31,100 explosive devices have been neutralised, clearing over 37,000 hectares of land. Thanks to intensive demining, the land is gradually being restored, and in recent years, local villages have seen efforts to resume raw material production and agro-processing. Priority sectors include animal feed, meat and dairy products, organic fertilisers, as well as viticulture and winemaking, fruit and vegetable canning, and more.

A key step in developing Aghdam’s agricultural potential will be the implementation of the joint Azerbaijani-Belarusian initiative to build an agro-town in the village of Gizil Kangarli in the Aghdam district. On April 6, a memorandum of understanding and cooperation in construction was signed via videoconference between Belarus’s Republican Unitary Enterprise (RUE) Belstroycenter and Azerbaijan’s IMA-ENERGY LLC.

The agreement will expand Belarusian construction services exports and, in particular, accelerate the creation of the agro-town in Aghdam. The Azerbaijani side will act as a subcontracting partner, working with Belarusian builders to construct 448 residential buildings, a school, a kindergarten, and full infrastructure. Azerbaijan will provide financing, while Belarusian specialists will contribute technology and know-how, resulting in a modern agricultural complex in Gizil Kangarli, including a poultry facility and a milk and meat production complex