The Azerbaijan Business Development Fund (ABDF), operating under the Ministry of Economy, has identified the restoration of the economy and ensuring sustainable development in the liberated territories as one of its key priorities. The Fund provides comprehensive support to increase economic activity, encourage the creation of new business entities, and expand existing initiatives in these territories through three main financial mechanisms: direct investment, guarantee and subsidy support, and concessional loans. These mechanisms aim to contribute to the development of the real sector and the creation of employment opportunities in the region.
Strategic development through the investment mechanism
Investment projects implemented in the liberated territories are of strategic importance in terms of unlocking the region’s economic potential and developing industrial and energy infrastructure. In addition to expanding local production and export opportunities, these projects directly serve the creation of new jobs and the formation of a sustainable economic environment.
Kalbajar-Lachin Hydropower Plants
Under the Joint Participation Agreement signed between ABDF and Türkiye’s Demirören Yatırım Holding A.Ş. Group of Companies, the restoration and operation of four small hydropower plants in the Kalbajar and Lachin districts are planned based on the public-private partnership model. The project is expected to provide uninterrupted electricity to approximately 7,000 households annually. The total value of the project is USD 27.5 million.
“Shafag” Solar Power Plant
The “Shafag” Solar Power Plant, the first industrial-scale solar energy project and the largest foreign investment initiative in the liberated territories, is also among the projects implemented with ABDF’s support. Through the “Shafag” Solar Power Plant, it is planned to transmit energy to the electricity grid of the Jabrayil district and, at the same time, meet the energy needs of the Sangachal Terminal through renewable energy. With a total value of USD 204 million, the project’s main objective is to develop Azerbaijan’s green energy sector and enhance environmental sustainability.
“Bafco Invest” LLC
The Fund also supports the restoration of economic activity by participating in large-scale projects focused on industrial production in these territories. The work footwear production project of “Bafco Invest” LLC, operating in the Aghdam Industrial Park, is a strong example of this participation. Based on a production process that meets modern quality standards, the total value of the project is AZN 15.1 million.
“Shahbulag Mining” LLC
“Shahbulag Mining” LLC is implementing a project for the exploitation of the Shahbulag limestone deposit in the Aghdam district and cement production in the city of Khojaly. Within the framework of the project, the production of cut stone and cement is being carried out, directly contributing to construction and restoration works in Karabakh. The total value of the project is AZN 5.17 million.
Real opportunities created through guarantee and subsidy support
The guarantee and subsidy mechanism applied by ABDF further facilitates entrepreneurs’ access to financial resources and minimizes credit risks. Under this mechanism, state guarantees are provided for up to 90% of loans obtained by entrepreneurs from banks and non-bank credit institutions. At the same time, 10 percentage points of the annual interest rate on these loans are subsidized by the state for a period of up to 36 months, with an additional grace period applied to the loans.
To date, the Fund has provided state guarantees amounting to AZN 56.5 million for AZN 66.8 million in loans obtained by entrepreneurs from banks for 52 projects. At the same time, subsidies worth AZN 17.3 million have been approved for these projects.
Local businesses supported through concessional loans
The concessional loan mechanism implemented by the Fund to support entrepreneurship ensures that business entities operating in the liberated territories have access to financial resources on more favorable terms. These loans, distinguished by lower interest rates, long-term repayment schedules, and grace periods, significantly reduce the financial burden on entrepreneurs and stimulate the sustainable development of businesses.
So far, concessional loans totaling AZN 45.8 million have been provided to entrepreneurs for 28 projects in the liberated territories.
The financial mechanisms provided by ABDF make an important contribution to increasing economic activity, creating new jobs, and supporting the sustainable development of the region. At the same time, they serve to build long-term financial accessibility for the expansion of entrepreneurship. This approach accelerates the implementation of business initiatives and creates conditions for the more effective mobilization of the region’s economic potential.
