Almost 40-year long conflict in the South Caucasus has prevented the regional countries from addressing many important regional issues in different sectors, from economic development to environmental protection. With the emergence of peace and positive momentum in negotiations, various international actors have begun to pay closer attention to these previously neglected challenges. Among them, the management of water resources, often referred to as water diplomacy, has gained increasing importance.
In this context, water diplomacy between Armenia and Azerbaijan is particularly significant, as both countries depend on interconnected water systems that cross national borders. Rivers such as the Kur and the Araks link the two states not only geographically but also economically and environmentally. These shared water sources are essential for drinking water supply, agricultural irrigation and energy production, especially hydropower. As a result, the way these resources are managed has direct consequences for the well-being and development of both societies. Especially that anticipated industrial development, particularly, United States’ intention to support creation of data centres both in Armenia and Azerbaijan will require not only energy but also huge amount of water resources. And given the growing role of AI technologies in all spheres of life these intentions might form long standing trend.
The importance of water diplomacy becomes even clearer when considering the growing vulnerability of the South Caucasus to water scarcity. Despite assumptions that the region has abundant water resources, it is in fact highly exposed to shortages, uneven distribution and poor management. By 2040, the region is expected to face acute water shortages, and climate change is predicted to increase floods and droughts. This makes effective water governance a pressing issue. States need to focus on adaptation measures for droughts, floods and water quality problems, taking into account climate change trends. At the same time, several factors complicate cooperation between Armenia and Azerbaijan.
The legal framework for water cooperation among countries remains limited. Besides, the “Convention on the Protection and Use of Transboundary Watercourses and International Lakes” provides a main legal framework, but from regional countries only Azerbaijan is a participant. Օne of the primary challenges is the long-standing political conflict between the two countries. Decades of tension have made it difficult to establish trust and engage in meaningful collaboration. Political disagreements often affect technical areas, such as water management, preventing the development of joint frameworks and agreements. Another major issue concerns the control of water infrastructure. Dams and reservoirs located in one territory can influence water availability in other areas. A notable example is the Sarsang Reservoir. Control over such infrastructure is not merely a technical matter but also a strategic one, as it can affect agriculture, livelihoods and even regional security. There are also water security concerns, as both Armenia and Azerbaijan are wary of potential shortages and fear that the other side could restrict access to resources. Refusing to resolve water supply issues could itself become a source of political tension in the future.
The roots of these challenges can be traced back to the collapse of the Soviet Union. During the Soviet era, water resources in the region were centrally managed and internal borders did not pose significant obstacles. After independence, however, the Kur-Araks river basin became a transboundary system shared by multiple countries, including Armenia, Azerbaijan and Georgia. This transformation introduced new complexities, as each state began to pursue its own national interests.
Azerbaijan, in particular, faces significant water insecurity. A large portion of its water resources originates outside its borders, making it heavily dependent on upstream countries. This dependence has shaped its policies and contributed to tensions with its neighbors. At the same time, Armenia has also experienced challenges related to water management, particularly following territorial changes that affected its access to certain water sources. Turkiye, as the most upstream country, also has an influence on these waters, making its involvement essential, along with Iran and Georgia.
Despite these difficulties, there are opportunities for cooperation. The shared nature of water resources means that countries may have a common interest in ensuring their sustainable use. International actors such as the EU, the USA and UN agencies can support efforts to improve water quality, prevent pollution and strengthen institutional capacity.
Practical steps could gradually begin with initial discussions around the idea on joint water quality monitoring systems and coordinated data sharing. In this context, NGOs, professional networks and expert platforms might play a helpful role by offering recommendations and creating spaces for dialogue, which could later inform and support potential government-level engagement.
Developing a shared strategy for emergency situations, such as floods, droughts or pollution incidents, could also help improve preparedness and reduce risks for all communities. Such efforts may also contribute to gradual trust-building between the countries. Public awareness also plays a key role, as informed societies are more likely to support collaborative environmental solutions rather than adversarial narratives.
At the same time, improving national systems remains essential as both Armenia and Azerbaijan face serious water management challenges, including inefficient use of water resources, aging infrastructure, climate-related risks such as droughts and gaps in governance and coordination. In many cases, data on water availability, usage and quality is incomplete or not well integrated, which makes it harder for local authorities to plan effectively. International experience shows that data centers can also create environmental risks. As mentioned above, large facilities may consume millions of liters of water daily for cooling, which can place additional pressure on local water resources and potentially worsen drought conditions.
Addressing these issues requires not only technical upgrades but also stronger, more transparent management systems. One practical step would be to establish integrated water information systems in each country. These would act as central platforms that collect and organize data from rivers, reservoirs, weather stations and water networks, helping authorities better understand and manage resources. Combined with simple digital tools and monitoring technologies, such systems could support better planning, reduce water losses and improve responses to shortages or floods. Alongside this, both countries could invest in modernizing infrastructure, introducing basic monitoring technologies and strengthening institutional coordination.
Thus, water diplomacy between Armenia and Azerbaijan is complex due to political tensions, but it remains essential for achieving stability and sustainable development, as water insecurity affects all parties. If managed properly, shared water resources can become a source of cooperation rather than conflict. Even in times of tension, water has the potential to serve as a tool for peace.
Although the issue of water resources has not yet become one of the main topics in official negotiations, it is actively discussed within expert and academic circles and continues to attract international attention. It is important for Armenia to develop a clear strategy on this issue, supported by qualified specialists and concrete proposals. Ultimately, all countries in the region will suffer from water shortages, and sooner or later, coordinated solutions and actions will become necessary.
Varduhi Harutyunyan
Following list of publication could be suggested for additional reading to those interested in the issue:
[1] UN initiatives on water cooperation in the South Caucasus and potential areas of focus, UN Europe and ACentral Asia
[2] Water Sector Political Economy Analysis (Pea) For USAID/Armenia Improved Water Management Program, January 2024
[3] Water (In)security in the South Caucasus: The Case of the Aras River and its Challenges, The Hague Research Institute for Eastern Europe, South Caucasus and Central Asia
[4] Data Centers and Water Consumption, Environmental and Energy Study Institute
https://www.eesi.org/articles/view/data-centers-and-water-consumption?utm_source=chatgpt.com
[5] Linking Women, Water and Peace: Promoting Women in Water Diplomacy South Caucasus