On June 29, the World Bank announced plans to allocate $410 million for the implementation of the "Livable Baku" project, aimed at improving environmental conditions and strengthening climate resilience in Greater Baku and surrounding areas. According to the World Bank, the project is expected to be appraised by October 26, 2026, while approval by the Board of Directors is scheduled for February 18, 2027. The financing will be provided through the International Bank for Reconstruction and Development, a member institution of the World Bank Group. The total project cost is estimated at $501.25 million, with the Government of Azerbaijan contributing $91.25 million.

The project is designed to improve urban living conditions and enhance resilience to climate-related risks through a combination of infrastructure investment and institutional reforms. It consists of three main investment components alongside a project management component. The first component focuses on integrated solid waste management in Baku and the Absheron district. It includes upgrading waste infrastructure, constructing sanitary landfills in line with international standards, establishing transfer stations, and developing sorting and recycling facilities. The measures also aim to expand separate waste collection at source and support the development of a circular economy to reduce landfill dependency.

The second and largest component addresses environmental remediation of polluted lakes and oil-contaminated areas. It provides financing for the restoration of Zigh, Khojasan, and the western part of Boyuk Shor lakes, which have been affected by industrial and domestic waste over several decades. The program also includes rehabilitation of selected oil-polluted sites in Greater Baku, with expected benefits including expanded green areas and improved land use for urban development. The third component focuses on institutional strengthening, aiming to improve the capacity of state bodies in urban planning, land management, and environmental governance. It also includes reforms in the solid waste sector, covering regulatory frameworks, tariff systems, and broader legal improvements. The fourth component will support project management, monitoring, and evaluation. It will finance operational costs of the Project Implementation Unit under the Ministry of Economy and support procurement, financial oversight, environmental and social compliance, and results monitoring systems.

The World Bank noted that the project is driven by long-standing environmental degradation linked to oil production and industrial activity, as well as inefficiencies in waste management systems. It also highlighted Azerbaijan’s exposure to seismic, flooding, and temperature-related risks, stating that environmental and social risks for the project are assessed as high. The institution added that Azerbaijan, classified as an upper-middle-income country, has experienced rapid but uneven urbanization in Baku over the past two decades. It stressed that climate change is exacerbating existing urban challenges, including rising temperatures and intensified heat island effects.

The World Bank further emphasized that effective management of Baku’s urban environment requires coordinated action among multiple agencies, including the Ministry of Ecology and Natural Resources, the Azerbaijan State Water Resources Agency, the State Committee for Urban Planning and Architecture, SOCAR, and "Tamiz Shahar" OJSC. It also noted that institutional capacity and data systems for integrated urban management are still developing. According to the World Bank, the "Baku General Plan 2040," with an estimated $55 billion investment framework, provides a long-term strategic basis for the capital’s development. The "Livable Baku" project is intended to support its environmental and resilience-related objectives.