European Commission President Ursula von der Leyen pledged up to €200mn ($228mn) in grants for connectivity projects in the South Caucasus during a visit to Baku on July 1, as Azerbaijan and Armenia move towards a peace agreement that both leaders described as having already changed conditions on the ground.

The visit follows the initialling of what both sides have called a historic peace text between Azerbaijan and Armenia, and comes as the EU seeks to expand transport and energy links across a region it regards as a strategic crossroads between Europe, the Caspian and Central Asia.

Von der Leyen is due in Armenia on July 2 to continue the regional tour. Briefing reporters in Brussels before the visit, European Commission chief spokesperson Paula Pinho said the trip should be seen in the context of the Armenia-Azerbaijan peace process and the EU's efforts to develop regional connectivity, adding that connectivity meant energy and transport links that could play a decisive role in bringing people closer together and ensuring integration.

Von der Leyen, accompanied by Commissioner for Enlargement Marta Kos, was received at Heydar Aliyev International Airport by foreign minister Jeyhun Bayramov and other officials, with an honour guard lined up beside Azerbaijani and EU flags. She held a one-on-one meeting with President Ilham Aliyev, followed by a wider session with delegations from both sides, before the two leaders delivered a joint press statement.

Von der Leyen said the European Commission's Global Gateway programme would provide up to €200mn in grants for transport, energy and digital connectivity projects in the South Caucasus, an amount she said had the potential to mobilise up to €2bn in public and private investment. She said possible projects included a railway link through Nakhchivan and development of the Port of Baku. She also proposed launching an EU-Azerbaijan Connectivity Partnership tied to the existing High-Level Connectivity Dialogue covering transport, energy and digital links, and floated holding a Regional Connectivity Investment Conference in Baku, bringing together the EU, the South Caucasus and Central Asia.

She separately announced a €20mn "peace dividend" programme aimed at translating the peace process into visible benefits for people living in border areas. She said the funding would go towards better healthcare, including the provision of ambulances, demining to improve security, rural development including water-resource management and what she called precision agriculture, support for stronger local communities, and assistance for small and medium-sized enterprises.

Aliyev, for his part, said Azerbaijan had invested heavily in transport infrastructure both domestically and in neighbouring countries and would continue to do so, noting that the East-West and North-South transport corridors both ran through Azerbaijani territory. He said good relations with neighbours had allowed Azerbaijan to build a broad cooperation format benefiting all participants, and that freight volumes passing through the country were rising in all directions. He added that the changed geopolitical situation had created a need to expand the capacity of Azerbaijan's sea ports and rail infrastructure, work he said was being carried out on schedule using the country's own financial resources.

On trade, Aliyev said the EU was Azerbaijan's principal trading partner, with more than 40% of Azerbaijan's trade conducted with EU member states, and that Azerbaijan accounted for around 70% of the EU's total trade with the South Caucasus.

On energy, Aliyev said gas exports to the EU had risen by around 65% since Baku and Brussels signed a memorandum on strategic energy partnership four years ago. He said half of Azerbaijan's gas exports now went to the EU and that 10 member states currently bought Azerbaijani gas, with scope to expand that further. He described energy security as an integral part of national security for any state and said Azerbaijan had committed significant political, diplomatic and financial resources to building infrastructure for the transport of its oil and gas, calling the 3,500-km Southern Gas Corridor "a fine example" of joint efforts, serving as the main artery for Azerbaijani gas supplies to Europe.

Von der Leyen said Azerbaijan had proved a reliable energy partner at a time when Russia had used energy as a weapon and cut gas supplies, calling the Southern Gas Corridor "an incredible success story" and thanking Aliyev for it. She said the two sides were now preparing "the next chapter," pointing to Azerbaijan's investment in future energy including plans for wind power generation in the Caspian Sea, and said the country had both the plans and the potential to become a hub for clean electricity. She said the EU supported Azerbaijan's plans for regional energy-grid integration and welcomed Aliyev's proposal for an electricity cable between Azerbaijan and Armenia, calling it a very important step for the future.

Aliyev said Azerbaijan intended to connect its own power system with that of the EU, which he said would also create room for additional gas export volumes. He added that contracts already signed with foreign and local companies would give Azerbaijan access to eight gigawatts of solar and wind capacity over the next five to six years, a figure he said covered only contracted volumes and did not preclude further capacity being added later.

Azerbaijan and Armenia signed a joint declaration in Washington in August last year at the White House, witnessed by US President Donald Trump, and initialled the text of a peace agreement at the same time.

Aliyev said a de facto peace was now in place and that Azerbaijan had taken a series of unilateral steps to demonstrate this was not merely a matter on paper. These included lifting all restrictions on the transit of goods to Armenia across Azerbaijani territory, restrictions he said had originally been imposed because of the occupation of internationally recognised Azerbaijani territory, and beginning the export of petroleum products, including petrol and diesel, to Armenia. He said Azerbaijan was learning to live in conditions of peace after three decades under occupation and needed to do everything possible to make that peace lasting.

Von der Leyen said the EU firmly supported the process and stood ready to help turn peace on paper into a reality on the ground. Both leaders also referred to discussions on relaunching negotiations for a new, more comprehensive EU-Azerbaijan agreement, with von der Leyen saying this could open the way to significantly higher levels of trade between the two sides.

Ahead of and during the visit, several rights organisations, jailed journalists and activists issued public appeals to von der Leyen urging the European Commission to raise human rights and the issue of political prisoners in its dealings with Baku, rather than focusing solely on energy and economic ties. Signatories included the Coordination Centre of Azerbaijani Political Migrants (ASIMKOM), jailed journalist Polad Aslanov, jailed Abzas Media journalists, and Third Republic Platform members Akif Gurbanov and Ruslan Izzatli.

The appeals cited differing figures for the number of political prisoners in the country: ASIMKOM's statement referred to more than 400 held in Azerbaijan, Aslanov's letter said he had been in detention for eight years without specifying an overall figure, Abzas Media journalists cited around 330, and a resolution adopted by the Parliamentary Assembly of the Council of Europe the previous week put the figure at 328. The German newspaper Frankfurter Allgemeine Zeitung reported that von der Leyen had not raised human rights publicly during a 2022 visit to Baku, when she described Azerbaijan as a reliable EU partner following the expansion of energy cooperation after Russia's invasion of Ukraine.

Azerbaijani authorities have denied that detentions in the country are politically motivated, saying those imprisoned were prosecuted for specific criminal offences rather than for their political views.

Among the cases cited in the appeals was that of Abzas Media staff, sentenced by the Baku Court of Grave Crimes on June 20, 2025: Ulvi Hasanli, Sevinc Vagifgizi, Hafiz Babali and Farid Mehralizade received nine-year prison terms, Nargiz Absalamova and Elnara Gasimova eight years, and Mahammad Kekalov seven years and six months. The Court of Appeal upheld the verdict on September 9, and Azerbaijan's Supreme Court rejected a cassation appeal on April 3, 2026, leaving the sentences unchanged.