Working with communities to create 2,105 permanent, expandable homes in 55 culturally appropriate villages across 13 districts of Azerbaijan, this project has provided security and stability for some of the one million refugees and internally displaced persons (R/IDPs) created by the conflict with Armenia. The project provides much needed infrastructure and has helped to establish over 350 small enterprises.


Project Description

Aims and Objectives

  • To provide refugees and displaced Azeris with the basic means to become self-sufficient, allowing them to live with dignity and in freedom from the cycle of dependency experienced when living in isolation or in refugee camps.
  • To ensure the integration of refugees and internally displaced persons enabling their participation in the country’s development and ending their marginalisation.

Relief International (RI) is a humanitarian non-profit agency providing emergency relief, rehabilitation, development assistance, and programme services to vulnerable communities worldwide. Having worked in Azerbaijan since 1993, RI’s livelihood development work includes micro-credit and livestock programmes to help people, particularly women, support their families and contribute to the country’s economic revival.

Project context

At the inception of the Integrated Community Shelter Program in 1995 there were approximately one million R/IDPs in Azerbaijan following the conflict over the disputed Nagorno-Karabakh territory. Many of these families lived in inadequate housing that included railway cars, tents, and reed houses along roadsides.

Entrepreneurship had been discouraged under the Soviet regime and in Azerbaijan’s emerging free market economy, many citizens were not familiar with the notion of individual responsibility regarding income generation. To end dependence on external aid, RI implemented a project working with R/IDPs – especially women – to build self-reliance through the provision of small loans and grants to establish small businesses.

Key features

The project originally started as a pilot programme in June 1995, funded by the United Nations High Commissioner for Refugees (UNHCR). The “Limestone Shelter Project” involved in the construction of 100 single units for R/IDPs using locally-available materials, with an internal dimension of 24m² per dwelling and one external pit latrine for each shelter. Over the course of six years, RI has built an additional 2,005 permanent limestone shelters in 55 small and medium-sized villages, replacing the existing tent camps and enabling R/IDPs to live in a community setting. The settlements range in size from 30 to 200 family houses and the project has built infrastructure including electricity, water supply, family latrines and bathhouses for the larger villages. This has ensured greater stability and long-term settlement of R/IDP families in their homes.

Integrated settlements

An attractive social environment has been created based on a non-linear and culturally appropriate layout, modelled upon existing villages in Azerbaijan and named after the original villages from which the inhabitants were displaced. The design included large kitchen gardens as well as the construction of schools, laundries, shops, day nurseries, health clinics, community centres and vocational centres. Building upon the lessons learned from previous years, the shelter project has been expanded, resulting in the creation of integrated settlements with additional activities focused on income generation, agriculture, water, sanitation, health, nutrition, women’s development, and peace and tolerance education. Over 350 income-generating projects have been developed through the programme, 26 per cent of which are led by women. The programme has also developed informal village councils, provided micro-credit revolving community funds, strengthened local associations and trained teachers and community-based health workers.

As part of a capacity-building effort, local executive committees have been established for all components of beneficiary selection, site location and contractor bidding. This has helped them become more acquainted with sound administrative practices, budgeting and community mobilisation. The communities to be resettled have also participated in the selection of the land as well as the design of the settlement.  Contractors have been encouraged to employ as many R/IDPs as possible. Residents meet regularly to discuss and assess their needs, address ongoing management and maintenance issues and identity projects of community interest.

Although the project was completed in 2001, RI has continued to work in Azerbaijan through its local implementing partner MADAD. As one of the few institutions licensed by the National Bank to provide microfinance services in Azerbaijan, MADAD is currently implementing a micro-credit programme to stimulate economic development and improve livelihoods for the poor. MADAD also manages 10 community information resource centres where people can have access to the Internet, computer and other training programmes.

The resettlement villages have provided benefits to the wider host communities by providing jobs in planning and construction and access to the microfinance services and community activities currently carried out by local NGO, MADAD.

RI’s model of permanent, expandable limestone homes, built with the community’s participation, has become the cornerstone of UNHCR’s shelter programming in Azerbaijan.  The approach has also been used by the national government in its 2005 housing programme. Further settlements are being built on a larger scale in other parts of the country.

Covering costs

Funding for the programme was obtained from a range of sources, including UN agencies and oil companies. The total cost for the programme (1995-2001) was US$22.9 million. Land was provided by the government and construction costs per square metre were US$422, which included water supply, sanitation, electricity, road maintenance, and green land for gardening.


A cross-sectional study carried out in December 2000 demonstrated a significantly improved quality of life for persons participating in the programme, compared to other local R/IDP populations. Families living in RI settlements were more likely to:

  • Have access to electricity, public tap water and a functioning toilet.
  • Have an additional income, often through a small business or trade.
  • Obtain a low- or no-interest loan.
  • Be located closer to a market and have access to public transport.
  • Participate in community events.
  • Receive prenatal care from a medical facility.

Families living in RI settlements were less likely to:

  • Share their house or latrine with another family.
  • Use dung as a heat source.

As the communities have moved into the new settlements they have gained the sense of a new beginning. This has helped them to become free from dependence on external aid. They have their own homes in a new village with the necessary infrastructure. The use of limestone as the main building material for the houses has given a sense of permanency, in contrast with the temporary shelters in which they had previously lived.


Why is it innovative?

  • In addressing R/IDP issues, RI did not simply build temporary shelters. Instead, entire villages of permanent limestone houses were constructed and full infrastructure, ensuring the long-term stability of the residents.
  • Culturally appropriate village layouts have been used for resettlement, rather than serried ranks of houses.
  • The careful selection of residents has allowed former neighbours, friends and relatives to stay together.
  • The emphasis placed on community-building activities has maximised the integration of R/IDPs into the host communities.
  • RI’s methodology of integrated community development has focused not only on meeting basic needs, but also on supporting processes of transition (e.g. from relief to development, from refugee camps and makeshift shelter to permanent settlements, from reliance on state economic initiatives to the creation and empowerment of sustainable systems at the community level).


What is the environmental impact?

The shelters were constructed from local materials, keeping costs down and using less embodied energy. Limestone, a material quarried in and around Baku, the capital of Azerbaijan, was determined to be the cheapest locally-available materials for wall construction, as many of the clay brick factories had closed. The original villages from which the inhabitants were displaced also used limestone as a building material. Timber was used for ceilings and floors and metal sheeting for roofs.

The project provides each family with access to public tap water and sanitation, a functioning toilet and access to electricity for more than five hours per day. Oil stoves diminish the need to cut trees for firewood and to use dung as a fuel. The design of the houses includes the construction of large kitchen gardens, where families can plant vegetables and fruits. Water channels and springs have been created in each settlement to help irrigate the land.


Is it financially sustainable?

RI’s ongoing activities in Azerbaijan, in partnership with MADAD, are funded by a range of sources. The revolving community funds, currently being developed as part of the organisation’s micro-credit programme, have demonstrated positive results.

A total of 352 small enterprises have been established through the programme, benefiting approximately 800 R/IDPs. Twenty-six per cent of the businesses established are led by women, which is a high figure within the context. The micro-loans provided by MADAD have helped R/IDPs to develop small, primarily agricultural businesses, including livestock, poultry, crop production, bee-keeping, transportation and trade. The programme has resulted in knock-on effects, with small markets, bakeries and leather tanneries spontaneously starting up on the project sites.

The settlements were built by local contractors that won the tenders for the project. Construction jobs were provided in the host communities where the shelter villages had been built. The vegetable seeds and gardens provided through the project have enabled the families to generate a modest seasonal income.


What is the social impact?

The beneficiaries of the project were carefully selected to ensure that families moving into the new buildings would have former neighbours, friends, and relatives in the immediate vicinity. Where possible, people were placed with those who had lived in the same village prior to displacement. Other communities had formed socially cohesive groups in previous accommodation and were kept together.

Sixteen multi-purpose community centres were established enabling R/IDP families to engage in activities that foster grassroots community development. These centres serve as schools, day nurseries, training centres and income-generation facilities and as meeting places for the community. RI settlements were built close to other villages, schools, and hospitals so that settlement residents would have easy access to them. As a result of the project, residents began to take ownership of the settlement and feel a sense of responsibility towards the community, taking it upon themselves to be responsible for water supply, electricity, and road maintenance.

RI built 17 primary and reproductive health clinics for patient treatment and health education, with a view to providing essential health interventions that would have a lasting positive impact on the population’s well-being and be more cost-effective than most curative services. Reproductive health services are offered to women, and health workers are trained to serve the community. Health conditions have been improved through the provision of adequate sanitation and water supply in the homes, and vulnerability has been greatly reduced through access to secure housing.

Through a range of capacity-building activities, the project has enabled a core segment of the R/IDPs to become self-supporting, developing transferable skills and becoming integrated within the host community. Training in small business management and simple accounting has been provided, as well as support in formulating a business plan to apply for MADAD loans. An RI and UNHCR developed education programme, has included the construction of new classrooms for R/IDP children, computer centres and a successful mobile library project.

Through MADAD’s micro-credit programme many women have been encouraged to start their own small businesses. Repayment rates have been extremely high and results helped show that women are not only more careful with money management and accounting in relation to male borrowers but also ensure that all proceeds go to the family.


  • Obtaining funding for the project was an initial challenge. This became far easier once the project was established and the benefits were clearly visible. Open dialogue has been maintained between RI and the community, government, and donor agencies.
  • Due to the vast number of R/IDPs it proved difficult to select the beneficiaries and the best location for construction of the settlements. RI selected the families that were facing the greatest difficulties and living in the most inadequate surroundings.
  • Many of the R/IDPs had not been exposed to an emerging market economy and the associated responsibility for income generation. Any entrepreneurship had been actively discouraged in Soviet times and so a training and capacity building program was required.

Lessons Learned

  • It became clear that the R/IDPs favoured their permanent housing to be constructed away from where they lived in makeshift accommodation. This allowed them to plan psychologically and emotionally for their future, and they showed greater inclination to improve their lives than those who remained where they had lived in temporary shelter.
  • Having previously determined the optimum size of settlements, it was apparent that the size of settlements should be decided on a site-by-site basis. Different community groups had different requirements, and flexibility was necessary.
  • In order to ensure project success, R/IDPs had to be involved in the selection of the land for their new site. Reasonable deadlines had to be set for the construction work (such as installing pit latrines), and the meeting of immediate infrastructure needs had to be initiated as quickly as possible.
  • The choice of construction materials (i.e. limestone) was important to ensure a sense of semi-permanency.



In December 2000, RI conducted a cross-sectional survey in 4 districts of Azerbaijan to evaluate the impact of its Integrated Community Shelter Programme, analysing the improvements in quality of life for participating families in comparison to similar R/IDP populations currently living in the same districts which had not participated in the resettlement project.



The project has been implemented in 13 districts with a total of 2,105 shelters built for refugees and IDPs. In coordination with MADAD, RI currently manages 10 Community Information Resource Centres across Azerbaijan.

RI’s approach has been adopted by the UNHCR shelter programmes in Azerbaijan and has made up the basis for the national government’s 2005 housing programme which has built larger scale settlements across the country.



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