The EU has announced up to €220 million in new funding for connectivity projects and community programmes in Armenia and Azerbaijan after European Commission President Ursula von der Leyen met Azerbaijan’s President Ilham Aliyev in Baku.
Von der Leyen, joined by Enlargement Commissioner Marta Kos, discussed ways to support peace through improved regional links and support for border communities, alongside EU–Azerbaijan trade and energy cooperation, the European Commission announced on Wednesday.
Up to €200 million in EU grant funding will go towards connectivity projects across the South Caucasus under the bloc’s Global Gateway programme, with the Commission saying this could mobilise up to €2 billion in public and private investment.
Global Gateway is the EU’s initiative to finance infrastructure and connectivity projects with partner countries.
A further €20 million will fund “Peace Dividends” for local communities in Armenia and Azerbaijan, including support for healthcare, demining, skills development and local businesses.
Partnership and projects
The EU also launched an EU – Azerbaijan Connectivity Partnership, which the Commission said would provide a framework to identify and finance projects and coordinate their delivery.
A High-Level EU – Azerbaijan Connectivity Dialogue covering transport, energy and digital links will be used to coordinate and monitor progress.
The EU is backing development of Azerbaijan’s Nakhchivan railway project, and a feasibility study for the project was launched with Azerbaijan and the European Bank for Reconstruction and Development in January 2026.
Baku will host a Ministerial Regional Connectivity Investment Conference by the end of 2026, bringing together the EU, South Caucasus and Central Asian countries, international financial institutions and private investors.
On energy and trade, von der Leyen reaffirmed the EU’s interest in cooperation on renewable energy, electricity interconnections and regional energy networks, and said talks should resume on a new comprehensive EU – Azerbaijan agreement.
“Our ‘Peace through Connectivity Package’ will help build a peaceful and prosperous future for the South Caucasus,” von der Leyen said, adding that the funding would help connect the region and support peace between Azerbaijan and Armenia.
Kos stated that peace should bring “tangible benefits” for people through investment in communities and connectivity.
