Azerbaijan reconstruction debts pass half a billion manat, watchdog says

More than 517m manat (£236m; $304m) in outstanding debt has accumulated across reconstruction projects in Azerbaijan’s recovered territories, according to a state watchdog report.

The Chamber of Accounts, which monitored the execution of the 2025 state budget, said the debt across nine purchasing authorities had jumped by 35% over the course of the year.

At the same time, total spending on rebuilding and restoring infrastructure in the regions recovered during the 2020 Karabakh war fell to 4.45bn manat (£2.03bn). This represents a decrease of nearly 900m manat compared to the previous year, when 5.4bn manat was spent.

The details emerge as Azerbaijani authorities manage the vast, multi-billion-manat transition of the war-torn territories back into the national economy.

Despite the scale of the reconstruction drive, several state-backed entities have faced scrutiny for failing to spend their allocated budgets.

The report noted that five ordering organisations had left a combined 65m manat unused in commercial bank accounts at the end of the year.

Among these, the municipal transport provider BakuBus LLC held 49.3m manat in unspent funds. The State Committee for Refugees and Internally Displaced Persons (IDPs) held 12m manat, while the state mining firm AzerGold CJSC left 3.7m manat unused.

The audit also highlighted a significant slowdown in the execution of key priority projects.

Five government bodies—including the Ministry of Youth and Sports, the Ministry of Culture, and the State Water Resources Agency—spent just 1.3m manat of the 55.8m manat allocated to them across 10 distinct projects. This represents an execution rate of just 2.3%.

Furthermore, 37 projects managed by 13 different state authorities recorded budget execution rates of under 50%.

While annual spending on construction has slowed down, the financial resources required to finish ongoing projects remain immense.

The Chamber of Accounts reported that the total estimated value of the 405 active projects in the region stands at 35.2bn manat (£16.1bn).

Although nearly 4.9bn manat was allocated to these projects in 2025, the auditor estimated that a further 17bn manat (£7.7bn) will be required to bring the existing pipeline of works to completion.

Project delays also continue to hamper the resettlement timeline.

While authorities planned to finish 129 separate projects by the end of 2025, only 111 were successfully completed and handed over at a cost of 653m manat.

The remaining 13 projects have faced persistent delays, despite the government having already paid out more than 162m manat to contractors.