Europe looks East: Azerbaijan’s Middle Corridor moment Khazar Akhundov’s take on new Eurasian trade map

With armed conflicts continuing in many parts of the world, the transport potential of Azerbaijan and the Central Asian countries has taken on even greater importance for the European Union. In August this year, the EU launched a new transport connectivity platform aimed at linking Europe with Central Asia via the Black Sea and the South Caucasus. Together with international financial institutions, Brussels plans to attract billions of dollars in investment to expand connectivity and modernise the infrastructure of the Middle Corridor, primarily by supporting the development of the Europe-Caucasus-Asia Transport Corridor (TRACECA).

The geopolitical crisis surrounding Ukraine, which led to a sanctions confrontation between the West and Russia and effectively brought cargo transit along the Northern Corridor to a halt, has acted as a catalyst, fundamentally reshaping the Eurasian transit and logistics map.

The situation has been further aggravated by the continuing conflict between the United States and Iran, which has resulted in the prolonged closure of the Strait of Hormuz, as well as recurring threats to shipping in the Red Sea, specifically in the Bab el-Mandeb Strait.

Delays in the transportation of hydrocarbon resources along these routes are particularly painful for Europe, which is facing another energy crisis. Against this backdrop, combined land-and-sea Trans-Caspian routes have acquired particular significance for Brussels.

These routes are regarded as among the most optimal options for transporting goods from China to Europe, as well as in the reverse direction, from the European Union and Türkiye to the countries of Central Asia and onward to China.

The Trans-Caspian routes, where Azerbaijan’s position is essentially unrivalled, are today the fastest, most resilient and safest means of transporting energy resources, fuel, chemical, mineral and agricultural commodities, as well as containerised cargo, from China to Türkiye and the EU countries.

It should be recalled that Azerbaijan is a key participant in the Europe-Caucasus-Asia international transport corridor (TRACECA), initiated by the European Union three decades ago. Freight transhipment along this route has experienced periods of growth and decline, but has never been completely interrupted.

Brussels and Baku are also interested in cooperation on both the Trans-Caspian International Transport Route (TITR), established in 2018-2019, and the Lapis Lazuli route. In addition, together with Bucharest, Tbilisi and Ashgabat, Azerbaijan is involved in the development of the prospective Black Sea-Caspian Sea transport artery.

According to World Bank forecasts, freight traffic along the Middle Corridor could reach 11 million tonnes by 2030. This is encouraging Azerbaijan and its Central Asian partners to consistently expand the corridor’s transport and logistics infrastructure, particularly the transhipment capacity of Caspian ports, which continue to face congestion when freight volumes rise sharply due to force majeure circumstances.

High concentrations of trucks and rail convoys are frequently observed at the ports of Aktau and Alat, as well as at Georgian seaports. The resulting “bottleneck” effect is preventing a rapid increase in cargo handling and transhipment volumes.

The problem was particularly pronounced in the summer of 2022 and recurred in April 2026 as a result of the war in the Middle East.

According to estimates by the Eurasian Development Bank (EDB), 114 transport projects with a combined value of more than $71.75 billion are being implemented or planned across the Central Asian countries alone to overcome bottlenecks and improve transport connectivity. For example, major infrastructure projects worth more than $6 billion were completed in the region last year. The largest share of investment, $42.8 billion, is being directed towards the development of sections of the TRACECA and Trans-Caspian International Transport Route (TITR) corridors, with Kazakhstan accounting for more than 45% of the total value of the projects.

It is worth recalling that, in an effort to expand multimodal container transportation, Baku and Astana are implementing a 2022-2027 Roadmap for the coordinated removal of bottlenecks and the development of the TITR. The project participants are investing hundreds of millions of dollars in port and railway infrastructure, acquiring additional vessels and expanding the rail rolling stock fleet.

A major driver of integration was the signing by Uzbekistan and other participating countries of an agreement on a single TRACECA transit permit in May 2026. As part of broader efforts to digitalise logistics, the participating countries are also introducing an electronic permit (e-Permit) system, which transfers the entire documentation process into digital form. These measures have helped reduce the standard transit time for cargo from China along the Middle Corridor from 18 days in 2024 to 15 days at present.

European countries have a strong interest in making full use of this potential. As early as the beginning of 2019, the European Commission (EC) announced its participation in transport projects in Azerbaijan worth a total of €1.1 billion under the “Indicative Action Plan for Investment in TEN-T”, prepared by the EU jointly with the World Bank.

In subsequent years, the European Union announced the allocation of $10 billion to develop port and railway infrastructure along the Middle Corridor across the wider Caspian region, support the introduction of digital solutions to ensure the seamless movement of cargo, and strengthen container and ferry fleets.

The EC’s long-term plans include expanding cooperation with Eastern European and Asian TRACECA member states within the Trans-European Transport Network, including the creation of a South-Eastern Axis aimed at increasing multimodal transport and bringing the TEN-T network into greater convergence with the infrastructure potential of the Trans-Caspian International Transport Route (TITR).

Some of these plans are now taking concrete shape. In mid-August, the European Union launched a new transport connectivity platform designed to link Europe with Central Asia and, together with international financial institutions, plans to mobilise around €2 billion for infrastructure development in the Black Sea region and the South Caucasus.

In turn, EU Commissioner for Enlargement Marta Kos said that freight traffic along the Trans-Caspian route could increase fivefold over the next 15 years, noting that Kazakhstan and Azerbaijan are the corridor’s main participants.

At the same time, Azerbaijan continues to invest hundreds of millions of dollars in budget funds in the development of logistics and transport infrastructure. In particular, by 2030, under the second phase of the development of the Baku International Sea Trade Port (BISTP), its capacity is planned to be increased to 25 million tonnes of cargo throughput and 500,000 TEU. The container terminal at BISTP currently has a capacity of 150,000 TEU, which is expected to increase to 260,000 TEU over the next two years.

Construction of a fertiliser terminal with an annual transhipment capacity of 2.5 million tonnes is currently nearing completion at the port. A project has also been developed for the construction of a grain terminal and a TIR park in the port area.

Meanwhile, in 2024, Azerbaijan completed the modernisation of the 184-kilometre Georgian section of the Baku-Tbilisi-Kars (BTK) railway, investing more than $100 million in the project. As a result, the capacity of the railway line increased from 1 million to 5 million tonnes of cargo per year.

At the same time, Azerbaijan is actively cooperating with the European Commission and the European Bank for Reconstruction and Development (EBRD), which provide advisory, technical and financial support for the development of logistics and TITR infrastructure and supported the energy-efficiency projects of Azerbaijan Railways (ADY) in 2017-2021.

Baku is also cooperating with the European Investment Bank (EIB), which recently completed an advisory project aimed at improving the efficiency and safety of ADY’s railway infrastructure. Particular attention has been given to improving safety at railway crossings along the key 503-kilometre Baku-Beyuk Kesik line, which is recognised as a component of the TEN-T network. The line connects the capital and the Baku port with Georgia’s railway network and provides access to the Black Sea.

These initiatives are being implemented through the EIB-JASPERS advisory programme under the EPIC grant-funded technical assistance framework for countries seeking to improve transport connectivity.