Azerbaijan is close to approving two major documents: the Socio-Economic Development Strategy for 2027–2030 and the Second State Program on the Great Return to the liberated territories. According to a Cabinet of Ministers statement of 24 September 2026, both drafts have been prepared, discussed at the Economic Council and submitted to the President; they are expected to be approved in the coming months[2].
These documents continue the policy pursued in 2022–2026. They will shape both the reconstruction and resettlement of Karabakh and East Zangezur and the development of the economy beyond oil. Because the texts have not yet been published, this article brings together what is known today from official sources and press reports, and explains what it means for the construction sector.
Key takeaways
- Both drafts are ready but have not yet been approved[2]; at the time of writing, the texts of the documents had not been published.
- As of 31 August 2026, 39,269 former internally displaced persons had returned, and the number of people living, working and studying in the liberated territories had reached 93,203[7].
- In 2020–2026 (2026 included), more than AZN 25 billion was allocated from the state budget for reconstruction work; the draft 2027 budget sets aside AZN 3.4 billion[2].
- According to the Ministry of Finance's medium-term forecast, released in April 2026, AZN 13.3 billion will be spent for this purpose in 2027–2030[12].
- In January–August 2026, GDP grew by 1.2% and the non-oil-and-gas sector by 2.1%, while value added in construction fell by 12.5%[19].
The Strategy and the Second State Program: one order, two documents
President Ilham Aliyev signed an order on the preparation of both documents on 30 May 2025. Under the order, the Cabinet of Ministers was to prepare the drafts and submit them to the President within nine months[1].
The preparation process went as follows:
- 23 June 2025. The first meeting of the Commission on the preparation of the documents was held, chaired by the Prime Minister. Two working groups led by deputy prime ministers were set up, along with 9 sub-working groups on the Strategy and 4 on the State Program[3].
- 27 February 2026. The Economic Council discussed both drafts and the main targets[4].
- 24 September 2026. At a meeting devoted to the draft 2027 state budget, it was announced that the drafts had been submitted to the President and that their approval was expected in the coming months[2].
The new documents build on the existing framework. "Azerbaijan 2030: National Priorities for Socio-Economic Development", approved in 2021, sets out five priorities: a steadily growing, competitive economy; a dynamic, inclusive society based on social justice; competitive human capital and a space for modern innovation; the Great Return to the liberated territories; and a clean environment and a country of "green growth"[5]. The First State Program on the Great Return was approved on 16 November 2022[6] and covers 2022–2026[8].
At the time of writing, the text of the new Strategy and of the Second State Program had not been made public. The figures below therefore relate to approved documents, the draft budget and official statistics, and should not be read as targets of the new program.
What has been done so far, in numbers
These are the latest official figures. The budget and demining figures are cumulative since 2020 and do not relate to the First State Program alone:
| Indicator | Official figure | Date / period |
|---|---|---|
| Former internally displaced persons who have returned | 39,269 people[7] | 31 Aug 2026 |
| People living, working and studying in the liberated territories | 93,203 people[7] | 31 Aug 2026 |
| Settlements where return has been ensured | 47 (10 cities, 3 towns, 34 villages)[2] | 24 Sep 2026 |
| Funds allocated from the state budget | More than AZN 25 billion[2] | 2020–2026 |
| Area cleared of mines | More than 298,000 hectares[9] | 2 Sep 2026 |
| Mines and unexploded ordnance neutralized | 260,147 items[9] | 2 Sep 2026 |
Major transport infrastructure was put into service in 2025. Lachin International Airport, opened on 28 May 2025, is the third international airport built in the liberated territories after Fuzuli and Zangilan; it sits 1,700 meters above sea level[10]. The Ahmadbayli–Fuzuli–Shusha road, opened on 3 July 2025, is 81.7 kilometers long; it has 7 tunnels, 11 bridges and 6 viaducts along its route[11].
As for settlements, according to information released in June 2025, initial-phase construction had been completed in 15 settlements, construction was under way in 27 and the foundations of 21 had been laid; overall implementation of the First State Program stood at about 79%[3].
At the same time, the targets need to be set against the actual results. The First State Program, which covers 2022–2026, planned the construction of 34,500 apartments and private houses, the rebuilding of 100 settlements and the return of 140,000 displaced persons[8]. As of 31 August 2026, 39,269 people had returned[7]; according to the statement of 24 September 2026, return had been ensured in 47 settlements[2]. In other words, resettlement has not yet reached the planned scale. In our assessment, the main weight of the next program will fall on resettlement.
2027–2030: what to expect from the next phase of the Great Return
Although the documents have not been published, the outlines of the next four years can be seen in the draft budget, a sector program already approved and public commentary.
Budget framework
The draft 2027 state budget provides AZN 3.4 billion for the reconstruction of the liberated territories[2]. For comparison, AZN 3.5 billion was allocated for 2026 (figure announced in December 2025)[22]. According to the Ministry of Finance's medium-term expenditure framework, released in April 2026, this spending will amount to AZN 13.3 billion in 2027–2030, or 24.3% of capital expenditure[12]. That is roughly AZN 3.3 billion a year on average (13.3 ÷ 4; our calculation).
The government also aims to raise the non-oil sector's share of GDP from the 72.5% expected at the end of 2026 to 82% by the end of 2030. For 2027, real growth of 2.7% in GDP and 4.4% in the non-oil sector is forecast[2].
A sector program already approved
On 23 September 2026, the State Program for the development of the mining (metal ores) and metallurgy industry for 2027–2030 was approved[13]. According to a statement by Economy Minister Mikayil Jabbarov on 22 September 2026, the total investment requirement under the program is estimated at AZN 5.3 billion: AZN 1.1 billion from the state budget, AZN 2.2 billion from the funds of state-owned enterprises and AZN 2 billion from private funds[14]. This split relates to one program, but it shows that the state budget is not the only source: about four-fifths of the money is expected from state-owned enterprises and the private sector, including debt capital.
What an MP, a party chairman and an economist say
An article published by Crossmedia.az on 25 September 2026 carries three views[15]. These are personal assessments, not official targets:
- Tural Ganjaliyev, a member of the Milli Majlis (parliament), believes that in the next phase priority will be given to more intensive return alongside infrastructure construction; he expects the number of permanent residents in Karabakh to reach 100,000, and perhaps exceed it, by 2030.
- Akif Naghi, chairman of the Azad Vatan (Free Homeland) Party, sees strengthening the non-oil sector as the main direction of the new Strategy; he proposes giving residents funds so that they can build their own houses.
- Economist Parviz Heydarov expects the quickest results from tourism and agriculture; in his view, the mining industry could bring a major revival, but that is a process that takes some time.
The MP's figure of 100,000 is not directly comparable with the 93,203 above: that indicator also includes people who work and study there.
Specialization by district: the MP's view
Tural Ganjaliyev also describes the future specialization of the districts[15]. Setting his remarks alongside the existing facilities and documents mentioned in the sources gives the following picture:
| Area | Expected direction (the MP's view) | Related existing facility or document |
|---|---|---|
| Khankendi and Shusha | Cultural and urban center | Master plans have been prepared for all 12 cities[18] |
| Aghdam | Industry | Aghdam Industrial Park: 190 hectares[16], 36 resident companies, more than AZN 175 million in investment, more than 1,000 jobs (August 2026)[17] |
| Fuzuli, Zangilan, Jabrayil | Agriculture | "Araz Valley Economic Zone" Industrial Park in Jabrayil: 200 hectares[16] |
| Lachin | Tourism | Lachin International Airport[10] |
Urban planning documents have also been prepared. Anar Guliyev, chairman of the State Committee for Urban Planning and Architecture, said on 26 September 2026 that the integrated planning framework covers about 13,600 square kilometers. Master plans have been prepared for all 12 cities, and planning documents for 106 settlements and villages[18].
Economic backdrop: the 2026 figures
The new Strategy is being prepared at a time when GDP is growing by 1.2%. According to the State Statistics Committee and the Cabinet of Ministers, in January–August 2026:
- GDP totaled AZN 87,709.5 million, 1.2% more than in the same period a year earlier (value added fell by 0.8% in the oil-and-gas sector and rose by 2.1% in the non-oil-and-gas sector)[19];
- fixed-capital investment totaled AZN 12,677.8 million, a real increase of 10%[20];
- investment rose by 32.4% in the oil-and-gas sector and by 1.4% in the non-oil-and-gas sector[20];
- the foreign trade surplus exceeded USD 10 billion; strategic foreign-exchange reserves currently stand at about USD 91 billion (as of the 24 September 2026 statement)[2].
What this means for the construction sector
This section is our own analysis, based on official figures. We are a company that provides construction services and takes part in this market; the analysis will need to be revisited once the new documents are published.
The current state of the market
The overall growth in investment came mainly from the oil-and-gas sector (our calculation from the official figures)[20] and has not yet shown up in construction volumes. In January–August 2026, value added in construction fell by 12.5% and the sector's share of GDP was 5.1%[19]. Investment in residential construction, meanwhile, rose by 1.8% in real terms to AZN 1,786.5 million[20]. In these conditions, the work the new state programs will generate is especially important for the sector.
The mix of orders may change
The first phase was the era of airports, highways and tunnels. If speeding up the return moves to the fore, it is reasonable to expect demand to shift toward housing, schools, healthcare facilities, utility networks, and production and agricultural buildings. Compared with large infrastructure contracts, that means a greater number of smaller and more varied projects. In such work, the construction of residential and non-residential buildings and engineering infrastructure need to be planned on a single schedule.
The state is not the only client
In the mining program, AZN 2 billion of the AZN 5.3 billion is to come from private funds[14]. Entrepreneurs have invested more than AZN 175 million in Aghdam Industrial Park[17]. In January–August 2026, the Small and Medium Business Development Agency (KOBIA) received close to 400 inquiries relating to the liberated territories, about 370 of them concerning investment projects[21]. The client, then, is not only the state: private investors are also commissioning factories, warehouses, and retail and service facilities.
Practical implications for contractors
- Track the approval of the documents and the action plan. Specific projects, deadlines and funding sources will be known once the documents are published.
- Design in line with the master plans. Master plans for 12 cities and planning documents for 106 settlements are ready[18]; every new project must comply with them.
- Build mine safety into the schedule. Although more than 298,000 hectares have been cleared[9], work can be carried out only on land that has been cleared and handed over.
- Cost logistics in advance. Mountainous terrain and long distances make it more expensive to deliver materials, equipment and labor; this needs to be accounted for separately in the cost estimate and in project management.
- Look at what the industrial parks offer. Information on the Aghdam and "Araz Valley Economic Zone" industrial parks is published on the Ministry of Economy's website[16]; the Small and Medium Business Development Agency, meanwhile, provides on-site services to entrepreneurs in Lachin, Zangilan, Kalbajar, Fuzuli and Shusha[21].
Frequently asked questions
When will the Second State Program on the Great Return be approved?
No exact date has been announced. According to the Cabinet of Ministers statement of 24 September 2026, the draft has been submitted to the President and approval is expected in the coming months[2].
What is the Socio-Economic Development Strategy for 2027–2030?
It is a medium-term government document that follows on from the 2022–2026 Strategy. It will set economic and social targets for the next four years within the framework of the "Azerbaijan 2030" National Priorities[1][5]. The text of the document has not yet been published.
How many people have returned to the liberated territories so far?
As of 31 August 2026, 39,269 former internally displaced persons had returned[7]. Return has been ensured in 47 settlements (10 cities, 3 towns, 34 villages)[2].
How much has been allocated for the reconstruction of Karabakh and East Zangezur?
In 2020–2026, more than AZN 25 billion was allocated from the state budget, and the draft 2027 budget sets aside AZN 3.4 billion[2]. According to the April 2026 forecast, this spending will amount to AZN 13.3 billion in 2027–2030, or 24.3% of capital expenditure[12].
How can private companies take part in reconstruction projects?
The main routes are participation in public procurement, residency in industrial parks and contracts from private investors. Once the new program is approved, we expect the participation mechanisms to be set out in its action plan.
Conclusion
In the first phase, roads, airports and the first settlements were built in the liberated territories. What is expected of the second phase is that this infrastructure fills with people and jobs. The financial framework is already visible: AZN 3.4 billion in 2027 and AZN 13.3 billion over four years. The specific targets will be known once the Strategy and the Second State Program are approved.
If you are planning a construction project in these territories or in other regions of the country, you can view our projects or contact us.