Azerbaijan has long been an intersection of major trade routes connecting Europe and Asia. Now, as global trade becomes increasingly connected, the country is playing a greater role as a transit hub for the movement of goods across the Eurasian landmass. 

This is a part of the bigger picture. One major line in this network of corridors is the North-South, with the Sumgait-Yalama rail line, which is very important for the movement of international and transit freight through Azerbaijan. 

It became a national priority to modernize this critical rail link due to the increasing importance of regional connectivity and trade volumes. Through the CAREC Program, the Asian Development Bank supported Azerbaijan’s Railway Sector Development Program, helping rehabilitate approximately 166 kilometers of double-track railway, civil structures, and level crossings along the Sumgait–Yalama line. A wide range of reforms to improve railway administration, governance, financial sustainability, and operational efficiency were also funded under the CAREC Program. 

The results extended well beyond the railway tracks themselves. 

The corridor rehabilitation not only enhanced the reliability and serviceability of Azerbaijan’s rail network but also enabled the country to handle increasing freight traffic volumes more efficiently. In parallel, the institutional reforms facilitated Azerbaijan Railways’ transformation into a robust, financially sound entity, well-prepared to confront a rapidly changing transport industry. 

Between 2018 and 2022, the volume of freight transport increased by 34%, from 14 million tons to 18.7 million tons. More than 80% of these goods were international and transit traffic, highlighting Azerbaijan’s emergence as a regional logistics hub connecting countries and markets throughout Eurasia. 

Beyond just improving transport performance, the program also strengthened Azerbaijan’s position in regional cohesion. The project, by enhancing an important part of the CAREC transport chain, helped facilitate trade and created new economic opportunities across the region. 

Since joining CAREC in 2003, Azerbaijan has worked alongside its regional partners to build stronger connections across Central Asia and beyond. The Railway Sector Development Program demonstrates how modern infrastructure, combined with institutional reform, can help countries unlock the full potential of regional trade and create lasting foundations for growth.