Infrastructure Investment, Debt, Capacity Utilization and the Changing Commercial Geography of China–Europe Trade

Trade Facilitation Network (TFN) Research Team Under the supervision of Muhammad Anwar Founder & Chairman, Trade Facilitation Network

Executive Summary

The Middle Corridor is evolving from a transport alternative into one of Eurasia’s most significant emerging infrastructure programmes.

Across the countries connecting China and Europe, billions of dollars are being invested in railways, highways, Caspian ports, vessels, container terminals and border infrastructure. Financing is being provided by governments, state-owned enterprises, China, multilateral development banks, European institutions, commercial lenders and private investors.

This research identifies a minimum project-level capital base exceeding US$12 billion from projects for which sufficiently comparable financial information has been established. This comprises more than approximately US$1.6 billion of selected authenticated and convertible historical investment and approximately US$10.4 billion of committed or under-implementation projects.

This is not the total historical cost of the Middle Corridor. Major legacy infrastructure and several new projects remain outside this figure where cost, attribution or overlap cannot yet be established reliably.

Five major new projects alone exceed US$10 billion:

China–Kyrgyzstan–Uzbekistan Railway — US$4.70 billion

Kazakhstan TRACE Jezkazgan–Karagandy — US$1.53 billion

Kazakhstan Mointy–Kyzylzhar Railway — US$1.41 billion

Georgia TC-GATE — more than US$750 million

Eastern Türkiye Middle Corridor Railway — US$1.615 billion

However, capital expenditure alone does not establish financial sustainability.

Traffic on the Trans-Caspian International Transport Route has grown rapidly, reaching approximately 4.5 million tonnes in 2024, compared with less than one million tonnes only several years earlier.

Against approximately 6 million tonnes of stated current corridor capacity, this suggests an indicative system-level utilization rate of approximately 75 percent.

Asset-level evidence, however, reveals a considerably more complex picture.

Kuryk Port handled approximately 1.96 million tonnes in 2024 against roughly 6 million tonnes of current capacity, equivalent to approximately 33 percent utilization.

Baku’s overall tonnage throughput was approximately 7.6 million tonnes against roughly 15 million tonnes of capacity, or approximately 51 percent.

By contrast, Aktau’s existing container infrastructure handled approximately 58,563 TEU in 2024 against around 70,000 TEU of pre-expansion container capacity, equivalent to approximately 84 percent utilization.

At the same time, Aktau Port was commercially profitable, reporting approximately KZT 11.38 billion in revenue, KZT 3.40 billion in EBITDA and KZT 3.28 billion in net profit in 2024.

Georgian Railway similarly reported positive EBITDA and net profit.

The evidence therefore does not support a generalized conclusion that the Middle Corridor is financially unsustainable or simply overbuilt.

Nor does rapid corridor-wide traffic growth demonstrate that every additional infrastructure project is financially justified.

Instead, a more important question emerges:

Is new capital being directed toward the actual economic bottleneck, at the appropriate time, and can the resulting infrastructure generate sufficient commercial or economic value relative to the financial obligations undertaken to create it?

This research therefore proposes that Middle Corridor policy move progressively from a capacity-expansion model toward a capital-productivity model.

The objective should not be to build the greatest amount of infrastructure.

It should be to obtain the greatest economic and commercial value from the infrastructure that is built.

PART I — GEOPOLITICS, GEOGRAPHY AND CAPITAL

1. From Physical Geography to Effective Commercial Geography

The shortest physical route is not necessarily the route that international commerce can use most easily.

International freight depends on distance, but also on banking, insurance, customs procedures, border efficiency, documentation, political relations, sanctions compliance and commercial risk.

Russia historically provided the principal railway connection between China and Europe. Iran offers another geographically attractive southern route.

However, geopolitical developments have changed the commercial calculation.

Sanctions imposed by individual countries or groups of allied states should not be confused with universally binding international restrictions. Nevertheless, unilateral and coordinated sanctions can produce commercial effects far beyond the jurisdictions formally imposing them.

Secondary-sanctions exposure, correspondent banking relationships, dollar clearing, insurance and reinsurance arrangements, technology restrictions and access to major markets can influence decisions by banks, insurers, carriers and cargo owners in third countries.

A transport corridor may therefore remain physically open and legally available while becoming commercially more difficult to use.

This produces what this research describes as:

Effective Commercial Geography

Physical geography identifies the routes that exist.

Effective Commercial Geography identifies the routes that banks, insurers, carriers, cargo owners and compliance departments are practically willing and able to use.

This distinction helps explain the increasing strategic importance of the Trans-Caspian Middle Corridor.

2. The Economics of Geopolitical Redundancy

The Middle Corridor provides something that international trade increasingly values:

route redundancy.

Redundancy has economic value.

Alternative transport capacity can protect trade against war, sanctions, border closures, political disputes, maritime disruption and other shocks.

However, redundancy also has a cost.

Railways must be financed.

Ports require capital.

Ships must be acquired.

Terminals must be operated.

Roads and border systems must be maintained.

Financial obligations can remain for decades after the geopolitical circumstances that originally encouraged investment have changed.

This creates a fundamental asymmetry:

Cargo is mobile. Infrastructure is fixed. Financial obligations endure.

Cargo can change routes rapidly.

Infrastructure cannot.

The central economic issue is therefore not whether redundancy has value.

It is:

How much redundancy is economically justified, what infrastructure is required to provide it, who finances that infrastructure, and how are its benefits and financial risks distributed?

3. Defining the Financial Geography

This research focuses on infrastructure and financial obligations arising in the transit economies between China and Europe.

The analytical geography therefore includes, where relevant:

Kyrgyzstan

Uzbekistan

Kazakhstan

the Caspian maritime system

Azerbaijan

Georgia

Türkiye

and connecting branches that materially form part of the same transport architecture.

China’s domestic investment in Xinjiang and other internal transport infrastructure can influence cargo generation and corridor capacity.

It is not, however, an international infrastructure-financing obligation carried by a transit economy.

Chinese capital invested or lent outside China is different and forms part of the financial architecture examined here.

PART II — HOW MUCH CAPITAL IS BEING COMMITTED?

4. The Existing Capital Base

The Middle Corridor did not begin with the current geopolitical cycle.

Important infrastructure was already being developed long before the latest investment wave.

Baku–Tbilisi–Kars Railway

The State Oil Fund of Azerbaijan records approximately:

US$745.9 million

allocated through the BTK financing mechanism.

A further investment exceeding approximately:

US$100 million

has subsequently been associated with increasing BTK capacity.

The US$745.9 million figure represents the authenticated SOFAZ financing allocation rather than the complete tri-country historical construction cost.

Georgian Railway Modernization

Georgian Railway reports a project value of approximately:

GEL 1 billion

The modernization increased nominal railway capacity from approximately:

27 million tonnes → 48 million tonnes annually.

Kuryk Ferry Complex

Kazakhstan invested approximately:

KZT 97.7 billion

in developing the Kuryk ferry complex.

Current government information places operational capacity at approximately:

6 million tonnes annually

including railway and automobile terminal capacity.

Aktau Container Hub

Reported investment is approximately:

KZT 47.6 billion

with container capacity being expanded toward approximately:

240,000 TEU annually.

Chinese Port Lianyungang Group participates as an investor.

Poti Multimodal Terminal

Kazakh capital has also moved farther west along the corridor.

A Kazakhstan-backed multimodal terminal launched at Poti, Georgia, represents:

more than US$30 million of investment

and approximately:

120,000 TEU of annual capacity.

Poti illustrates an important development: Middle Corridor infrastructure ownership and investment increasingly cross national boundaries.

The corridor is becoming not only an interconnected transport system but also a cross-invested financial system.

5. The New Investment Wave

China–Kyrgyzstan–Uzbekistan Railway

Total project value:

US$4.70 billion

Approximately:

US$2.3 billion

is being financed through a 35-year Chinese-bank loan to the joint project company.

Approximately another US$2.3 billion is equity.

The approximate equity allocation is:

China — US$1.173 billion

Kyrgyzstan — US$563.5 million

Uzbekistan — US$563.5 million

The Kyrgyz government states that the joint project company is responsible for repaying the loan.

The debt should therefore not automatically be characterized as Kyrgyz sovereign debt without evidence of sovereign guarantees or other contingent public obligations.

Kazakhstan TRACE — Jezkazgan–Karagandy

Total project cost:

US$1.53 billion

including:

World Bank — US$650 million

AIIB — US$650 million

counterpart financing — approximately US$230 million.

This is principally public economic infrastructure rather than a standalone commercial transport enterprise.

Mointy–Kyzylzhar Railway

Underlying commercial financing:

US$1.41 billion

supported by:

IBRD guarantee — US$846 million

AIIB co-guarantee — US$564 million.

These guarantees support the same US$1.41 billion financing.

They must not be added to the underlying loan as separate investment.

Georgia TC-GATE

Total programme value:

more than US$750 million

including:

US$372 million

of World Bank financing alongside additional international co-financing.

Eastern Türkiye Middle Corridor Railway

Total project cost:

US$1.61521 billion

comprising:

IBRD — US$660.00 million

Türkiye — US$454.51 million

AIIB — US$250.00 million

Islamic Development Bank — US$250.70 million.

The project is expected to increase freight capacity on the relevant railway section from approximately:

0.75 million tonnes → 20 million tonnes annually.

Aktau Port Modernization

Total project cost:

€55 million

including:

EBRD loan — up to €35 million

EU capital grant — up to €10 million

plus counterpart financing.

Horadiz–Aghband / Zangezur

Azerbaijan has allocated at least:

AZN 312.7 million

for construction of the Horadiz–Aghband railway.

This is an authenticated allocation rather than the complete cost of the wider Zangezur/Nakhchivan transport system.

6. A Minimum US$10 Billion New-Project Base

Five major authenticated projects alone produce:

CKU — US$4.700bn

TRACE — US$1.530bn

Mointy–Kyzylzhar — US$1.410bn

TC-GATE — >US$0.750bn

Eastern Türkiye — US$1.615bn

Combined:

more than US$10 billion

This excludes several additional rail, road, maritime and terminal investments.

It should therefore be understood as a minimum authenticated project base, not the total cost of the Middle Corridor.

7. The €18.5 Billion Investment Requirement

The EBRD-led study commissioned with EU support identified approximately:

€18.5 billion

of priority hard-infrastructure investment requirements across the five Central Asian countries.

It identified 33 priority hard-infrastructure needs covering areas such as railways, roads, rolling stock, ports, border crossings and logistics facilities.

Importantly, the study also found that many corridor constraints concern soft connectivity rather than simply insufficient physical infrastructure.

These include:

digitalization;

documentation;

interoperability;

tariffs;

border procedures;

market access;

and institutional coordination.

This leads to an important policy point:

Not every transport bottleneck requires another railway, road, terminal or port. Some require better utilization and coordination of infrastructure already available.

8. The €10 Billion Mobilisation Must Not Be Added Again

European and international financial institutions subsequently announced approximately:

€10 billion

of mobilisation for sustainable transport connectivity in Central Asia.

The €18.5 billion and €10 billion figures measure different things.

Broadly:

€18.5bn = identified investment requirement

while:

€10bn = financing/investment mobilisation toward that requirement.

Individual projects may also fall within these envelopes.

Therefore:

€18.5bn + €10bn + all individual projects is not a valid investment calculation.

PART III — CAPACITY AND ACTUAL USE

9. Traffic Has Grown Rapidly

Official Kazakhstan reporting shows strong Middle Corridor freight growth.

Traffic increased from approximately:

0.84 million tonnes in 2021

to:

1.70 million tonnes in 2022

2.76 million tonnes in 2023

and:

4.50 million tonnes in 2024.

Against approximately 6 million tonnes of stated current corridor capacity, indicative utilization increased from around:

14% in 2021

to:

75% in 2024.

This represents substantial growth.

The Middle Corridor cannot reasonably be characterized as a transport system without demand.

The more difficult question concerns whether demand will continue growing rapidly enough to utilize the much larger next generation of infrastructure.

10. Corridor Utilization Is Not Asset Utilization

A 75 percent corridor-level figure does not mean that every railway, port and terminal operates at 75 percent utilization.

Asset-level evidence shows major differences.

Kuryk

2024 throughput:

1.958 million tonnes

against approximately:

6 million tonnes capacity

Indicative utilization:

32.6%

Baku

2024 throughput:

approximately 7.6 million tonnes

against approximately:

15 million tonnes capacity

Indicative utilization:

approximately 51%

Aktau Container Interface

2024 container throughput:

58,563 TEU

against approximately:

70,000 TEU of pre-expansion capacity

Indicative utilization:

approximately 84%

The contrast is fundamental.

The same corridor can contain:

a near-capacity container interface;

a moderately utilized port;

and:

another port with substantial spare tonnage capacity.

Consequently, neither of the following statements is sufficiently accurate:

“The Middle Corridor is full.”

or:

“The Middle Corridor is underutilized.”

The network contains both bottlenecks and unused capacity.

11. The Bottleneck Determines Effective Capacity

Individual capacities cannot be added together.

A railway capable of carrying 48 million tonnes does not create 48 million tonnes of China–Europe corridor capacity if a Caspian interface or downstream railway can process only a fraction of that volume.

Therefore:

Effective End-to-End Capacity ≈ Capacity of the Binding Commercial Constraint

This is the capacity that matters for investment planning.

12. Container Expansion Creates a Timing Question

Aktau’s expansion illustrates the issue.

Pre-expansion capacity:

approximately 70,000 TEU

2024 throughput:

58,563 TEU

Utilization:

approximately 84%.

Expanding capacity toward approximately:

240,000 TEU

clearly addresses the risk of a container bottleneck.

However, once that capacity is installed, the same 2024 traffic would initially represent only:

approximately 24% utilization.

To reach:

50% utilization requires 120,000 TEU

75% requires 180,000 TEU

100% requires 240,000 TEU.

The investment question is therefore not simply whether additional capacity is required.

It is:

How quickly will additional demand arrive to monetize that capacity?

PART IV — FROM CAPACITY TO FINANCIAL SUSTAINABILITY

13. Capacity Does Not Repay Investment — Revenue Does

Physical utilization is only the first financial test.

The next is:

Annual Revenue

Relevant Traffic × Net Revenue Retained per Tonne/TEU

against:

Annual Financial Requirement

O&M + Maintenance + Interest + Principal Repayment + Capital Renewal

producing:

Financial Surplus or Shortfall

Revenue − Operating Requirement − Financing Requirement

Where financing terms are not publicly disclosed, annual debt service should not be invented.

Instead, the research records the known financial exposure.

14. Aktau: A Commercial Case Study

Aktau Port’s 2024 reporting provides unusually useful evidence.

Revenue:

KZT 11.377 billion

EBITDA:

KZT 3.401 billion

Net profit:

KZT 3.284 billion

Approximate EBITDA margin:

29.9%

Approximate net profit margin:

28.9%

The existing port operation was therefore profitable before the major new container and berth-expansion investments reached full operation.

This materially changes the financial interpretation of new investment.

The question is not whether new infrastructure is being added to rescue a persistently loss-making port.

It is whether the incremental return from expansion justifies the incremental capital.

15. Aktau’s Existing Debt-Service Evidence

Two Development Bank of Kazakhstan loans associated with the port’s northern expansion carried approximately:

7% fixed annual interest

in tenge.

During 2024, the port made approximately:

KZT 1.042 billion

of loan payments, comprising principal and interest-related payments.

Compared with approximately KZT 3.401 billion in EBITDA, a simple coverage comparison gives:

approximately 3.3 times

EBITDA relative to the disclosed loan payments.

This is not a formal debt-service coverage ratio, but it indicates that operating earnings materially exceeded the identified annual payments on these loans.

Current evidence therefore does not establish that Aktau’s existing financing burden is being transferred to the public through operating losses.

16. Georgian Railway: Spare Capacity Does Not Mean Financial Loss

Georgian Railway provides another important case.

In 2024, it reported approximately:

GEL 648.3 million in revenue

and:

GEL 220.6 million in adjusted EBITDA.

In 2025:

Revenue — approximately GEL 612.4 million

Adjusted EBITDA — approximately GEL 192.0 million

Net profit — approximately GEL 152.7 million.

The railway therefore remained profitable at the enterprise level.

This is an important warning against equating unused physical capacity with financial failure.

However:

Company profitability is not the same as Middle Corridor profitability.

Georgian Railway also serves domestic, regional, passenger and other international traffic.

The entire company’s income cannot be attributed to China–Europe transit.

17. Multipurpose Infrastructure Requires Attribution

For a multipurpose railway, the correct financial concept is:

Corridor-Attributable Capital

Total Investment × Middle-Corridor-Attributable Share

rather than:

Total Project Cost ÷ China–Europe Traffic

The same principle applies particularly to Türkiye and Kazakhstan.

Infrastructure may simultaneously generate:

domestic freight revenue;

regional trade;

passenger benefits;

operating savings;

industrial development;

and international transit revenue.

All economically relevant uses must be recognized.

18. CKU: The Largest Future Commercial Test

The CKU Railway provides perhaps the most important future cash-flow test.

Total project value:

US$4.7 billion

Debt:

approximately US$2.3 billion

Equity:

approximately US$2.3 billion

Loan maturity:

35 years

The relevant commercial question is:

Can the joint railway company generate sufficient cash flow to service approximately US$2.3 billion of debt while producing an acceptable return on approximately US$2.3 billion of equity?

The interest rate and complete amortization schedule are not yet sufficiently established for this research to calculate actual annual debt service.

However, a mathematical floor can be established.

If US$2.3 billion of principal were repaid evenly over 35 years with zero interest:

US$65.7 million per year

would be required simply to recover principal.

This is not estimated debt service.

It is a theoretical minimum.

Actual financing requirements must be higher once interest and the actual repayment structure are included.

19. CKU Break-Even Sensitivity

Using the zero-interest principal-recovery floor alone:

If the railway generated a net cash contribution of:

US$10/tonne → 6.57m tonnes required

US$20/tonne → 3.29m tonnes

US$30/tonne → 2.19m tonnes

US$40/tonne → 1.64m tonnes

US$50/tonne → 1.31m tonnes.

These are sensitivity calculations, not traffic forecasts.

They exclude:

interest;

O&M;

maintenance;

renewals;

working capital;

tax;

and:

return on equity.

Actual commercial break-even traffic would therefore be higher.

The calculation nevertheless demonstrates the core financial principle:

The decisive variable is not tonnes alone. It is net cash generated per tonne relative to the capital structure.

20. Public Roads Require a Different Test

The US$1.53 billion TRACE highway investment cannot appropriately be assessed through:

tariff × freight tonnes.

A public highway can generate economic returns through:

reduced travel time;

lower vehicle operating costs;

lower accident costs;

regional development;

trade expansion;

and improved market access.

Its correct test is therefore:

Economic Return + Fiscal Debt-Service Capacity

rather than standalone commercial profitability.

This distinction is essential when discussing public financial burden.

PART V — WHO ULTIMATELY CARRIES THE RISK?

21. US$12 Billion of Capital Is Not US$12 Billion of Public Debt

The identified capital base contains fundamentally different financing instruments.

These include:

grants;

equity;

project-company debt;

SOE borrowing;

sovereign borrowing;

commercial lending;

MDB lending;

government counterpart funding;

and:

guarantees.

These instruments create different financial exposures.

For example, approximately half of CKU’s project capital is equity.

The €55 million Aktau modernization programme includes an EU grant.

Mointy–Kyzylzhar’s MDB guarantees support underlying financing and must not be counted as additional investment.

Therefore:

Project value cannot automatically be equated with public debt.

22. When Does Underutilization Become a Public Burden?

An underutilized asset does not automatically impose a cost on citizens.

Foreign equity may absorb lower returns.

A project company may carry its own commercial risk.

A grant may create no conventional repayment obligation.

The public-policy concern becomes more direct where insufficient project revenue produces:

sovereign debt service;

SOE operating losses;

budgetary subsidies;

government recapitalization;

called guarantees;

publicly supported refinancing;

or:

cross-subsidization through higher charges on domestic users.

Therefore:

Infrastructure underutilization becomes a public-policy concern when the financial cost of unused capacity migrates from the commercial project to the public balance sheet or domestic users.

23. User Charges Are Also Part of the Financial Architecture

Public exposure is not limited to budgetary subsidies.

Infrastructure costs can also migrate through transport tariffs.

Kazakhstan has pursued increases in regulated railway network and locomotive-traction tariffs.

Such increases may be necessary to ensure financially sustainable railway operations.

However, they also illustrate that the ultimate economic burden of infrastructure can reach:

exporters;

importers;

manufacturers;

logistics companies;

and eventually consumers.

The relevant question is therefore not only:

Who borrowed the money?

It is also:

Who ultimately pays for the infrastructure through taxes, tariffs, freight charges or commercial returns?

PART VI — FROM CAPACITY EXPANSION TO CAPITAL PRODUCTIVITY

24. Three Different Financial Models

Middle Corridor infrastructure should be separated into at least three categories.

Commercial Infrastructure

Ports, terminals, vessels and project-company railways.

Financial test:

Revenue − O&M − Financing Cost

Examples include Aktau, Kuryk, Poti and eventually CKU.

Multipurpose State-Owned Commercial Infrastructure

National railway networks serving multiple markets.

Financial test:

Incremental Revenue + Operating Savings − Incremental Financing and O&M

Examples include Georgian Railway and KTZ.

Public Economic Infrastructure

Roads and other assets whose justification rests substantially on broader economic benefits.

Financial test:

Economic Return + Fiscal Sustainability

TRACE is an example.

Applying one profitability test to all three would produce misleading conclusions.

25. Physical Utilization and Financial Monetisation

The research therefore distinguishes:

Physical Capacity Utilization

Actual Traffic ÷ Installed Capacity

from:

Capacity Monetisation

the ability of utilized capacity to generate sufficient operating cash or economic value relative to the financial obligation associated with the asset.

Where sufficiently comparable audited information exists, a useful financial indicator is:

Capacity Monetisation Ratio

Net Operating Cash Generated ÷ Annual Financial Requirement

A ratio above 1.0 would indicate that defined operating cash is sufficient to meet the identified annual financial requirement.

A ratio below 1.0 would indicate a financing gap requiring support from another source.

The ratio should only be calculated where audited and comparable cash-flow and financing information are available.

26. Investment Should Follow the Economic Bottleneck

The evidence now points toward one of the central findings of this research.

The Middle Corridor can simultaneously contain:

highly utilized infrastructure;

moderately utilized infrastructure;

large unused capacity;

and:

physical or institutional bottlenecks.

Consequently:

Investment should follow the economic bottleneck, not merely the political importance of the corridor.

Additional physical capacity creates limited value if the binding constraint lies elsewhere.

The constraint may instead be:

vessel availability;

border processing;

railway scheduling;

customs procedures;

documentation;

insurance;

banking;

tariff coordination;

interoperability;

or another downstream transport interface.

Before capital is committed to additional physical capacity, these alternatives should be tested.

27. A Capital-Productivity Model

The next phase of Middle Corridor development should therefore place greater emphasis on:

Capital Productivity

defined in this research as:

The economic and financial value generated from each unit of corridor-related capital committed.

Governments and financiers should monitor not only:

kilometres constructed;

berths added;

vessels purchased;

terminals built;

and announced capacity;

but also:

actual throughput;

asset utilization;

revenue;

operating cash generation;

maintenance costs;

debt service;

incremental transit traffic;

and:

domestic economic value captured.

The most successful corridor will not necessarily be the one that builds the most infrastructure.

It will be the one that obtains the greatest economic productivity from the infrastructure it builds.

CONCLUSION

The Middle Corridor has moved beyond the stage of geopolitical concept.

It is becoming a major Eurasian capital programme.

Traffic has grown rapidly.

Some infrastructure bottlenecks are real.

Alternative Eurasian connectivity has genuine strategic value.

Sanctions, geopolitical risk and disruption elsewhere have strengthened the case for transport redundancy.

However, the scale of investment now changes the policy question.

The Middle Corridor should no longer be evaluated primarily by kilometres of railway constructed, port capacity announced or billions of dollars mobilized.

It should increasingly be evaluated through the relationship between:

Capital, Capacity, Cargo and Cash Flow.

The evidence assembled in this research does not establish that the Middle Corridor is overbuilt.

Nor does it establish that participating countries are carrying unsustainable financial burdens.

Such conclusions would go beyond the available evidence.

Instead, the research establishes a more nuanced picture.

Overall traffic has grown strongly.

Some existing assets are commercially profitable.

Some infrastructure possesses considerable spare capacity.

Other interfaces have approached their previous capacity limits.

Billions of dollars of additional infrastructure are now being constructed ahead of anticipated future demand.

The central issue is therefore not simply whether more capacity is required.

It is:

Where is additional capacity required, when will it be required, what traffic will use it, what value will it generate, and who carries the financial risk if projected demand does not materialize?

This question becomes particularly important because the fundamental asymmetry remains:

Cargo is mobile. Infrastructure is fixed. Financial obligations endure.

Cargo can respond rapidly to freight rates, sanctions, war, insurance conditions, border closures and political relations.

A railway remains where it was constructed.

A port cannot relocate.

A long-term financing obligation remains until it is repaid, refinanced, restructured or absorbed.

The appropriate policy objective is therefore not to discourage Middle Corridor investment.

It is to ensure that:

new infrastructure addresses demonstrable bottlenecks;

existing capacity is optimized before unnecessary duplication;

trade facilitation accompanies physical investment;

financial obligations are transparent;

multipurpose infrastructure is evaluated according to all its economic uses;

and:

persistent unused capacity does not unnecessarily migrate into a burden on public finances or domestic transport users.

The ultimate measure of success will not be how much capital Eurasia mobilizes for the Middle Corridor.

It will be:

how efficiently that capital converts geopolitical resilience into commercially competitive transport, productive infrastructure and sustainable economic value.

ANNEX I

FINANCIAL ARCHITECTURE OF THE MIDDLE CORRIDOR

A. Purpose

This annex consolidates the principal authenticated investments identified by the research into a common analytical framework.

It separates:

Already Invested / Operational

Committed / Under Implementation

and:

Projected / Pipeline

while distinguishing project value from loans, equity, grants and guarantees.

Currency conversions are analytical equivalents. Original currencies remain the primary project values, particularly where expenditure occurred across several years.

B. Already Invested / Operational

Baku–Tbilisi–Kars Railway

SOFAZ financing allocation:

US$745.9m

Subsequent capacity investment:

>US$100m

Minimum identified:

>US$845.9m

Georgian Railway Modernization

Reported project value:

~GEL1.0bn

Analytical USD equivalent:

~US$368m

Capacity:

27m → 48m tonnes/year

Kuryk Ferry Complex

Investment:

KZT97.7bn

Project-period analytical equivalent:

~US$300m

Current operational capacity:

~6m tonnes/year

Approximate historical capital per annual tonne of installed capacity:

~US$50

Aktau Container Hub

Investment:

KZT47.6bn

Analytical equivalent:

~US$91m

Target capacity:

~240,000 TEU/year

Approximate capital per annual TEU of capacity:

~US$380

Poti Multimodal Terminal

Investment:

>US$30m

Capacity:

~120,000 TEU/year

Minimum capital intensity:

>US$250 per annual TEU

Minimum Identifiable Already-Invested Base

Using the authenticated and convertible investments above:

>US$1.63 billion

This is a minimum identified base rather than the historical cost of the entire Middle Corridor.

C. Committed / Under Implementation

CKU Railway

Total:

US$4.70bn

Debt:

~US$2.30bn

Equity:

~US$2.30bn

Loan maturity:

35 years

Kazakhstan TRACE

Total:

US$1.53bn

World Bank:

US$650m

AIIB:

US$650m

Counterpart:

~US$230m

Mointy–Kyzylzhar

Underlying financing:

US$1.41bn

IBRD guarantee:

US$846m

AIIB co-guarantee:

US$564m

Guarantees are not added again to project value.

Georgia TC-GATE

Total:

>US$750m

World Bank financing:

US$372m

with additional international co-financing.

Eastern Türkiye Middle Corridor Railway

Total:

US$1.61521bn

IBRD:

US$660m

Türkiye:

US$454.51m

AIIB:

US$250m

IsDB:

US$250.70m

Aktau Port Modernization

Total:

€55m

Analytical equivalent:

~US$62m

EBRD loan:

€35m

EU grant:

€10m

balance through counterpart financing.

Horadiz–Aghband

Authenticated allocation:

AZN312.7m

Analytical equivalent:

~US$184m

This is not the complete cost of the wider Zangezur system.

Kazakhstan Caspian Vessel Programme

Reported programme:

KZT74.3bn

Analytical equivalent:

approximately US$140–145m

The programme remains subject to reconciliation with separately announced vessels to avoid double counting.

Minimum Identifiable Committed Base

Principal authenticated committed/under-implementation projects:

approximately US$10.4 billion

D. Combined Identified Capital

Already invested:

>US$1.63bn

Committed/under implementation:

~US$10.4bn

Combined minimum identifiable capital:

>US$12 billion

This is not the total cost of the Middle Corridor and should not be described as such.

E. Projected / Pipeline

Kuryk Multifunctional Development

Phase I:

~US$300m

Longer-term development:

up to ~US$1.1bn

Projected Phase I capacity includes approximately:

180,000 TEU

180,000 vehicles

and:

2–3m tonnes of bulk cargo annually.

Alat/Baku Port Phase II

Current Phase I capacity:

~15m tonnes + 100,000 TEU

Future Phase II:

~25m tonnes + 500,000 TEU

Project cost remains open pending sufficiently authenticated financial information.

Wider Zangezur/Nakhchivan Development

Additional investment is expected beyond the authenticated Horadiz–Aghband allocation.

Full cost remains open.

F. Umbrella Figures — Not Additive

Central Asian priority infrastructure requirement:

€18.5bn

European/international mobilisation:

~€10bn

These amounts should not be added to one another and then added again to individual projects.

They measure different stages of the investment process and overlap.

G. Financial Exposure

The identified US$12bn-plus capital base contains:

equity

grants

project-company debt

SOE debt

sovereign financing

commercial financing

MDB financing

guarantees

and:

government counterpart expenditure.

Consequently:

US$12bn of identified capital ≠ US$12bn of public debt.

The financial burden must be traced project by project.

ANNEX II

FROM CAPITAL TO CASH FLOW

A. Asset-Level Utilization

Kuryk Port — 2024

Capacity:

~6.0m tonnes

Throughput:

1.958m tonnes

Utilization:

32.6%

Unused nominal capacity:

~67.4%

Historical capital equivalent:

~US$300m

Capital per annual tonne of installed capacity:

~US$50

Capital relative to 2024 actual throughput:

~US$153 per tonne handled

These are capital-productivity indicators, not freight tariffs.

Baku Port — 2024

Capacity:

~15m tonnes

Throughput:

~7.6m tonnes

Indicative utilization:

~50.7%

Aktau Containers — 2024

Pre-expansion capacity:

~70,000 TEU

Actual:

58,563 TEU

Indicative utilization:

~83.7%

Future capacity:

~240,000 TEU

2024 traffic against future capacity:

~24.4%

Traffic required for future capacity utilization:

50% → 120,000 TEU

75% → 180,000 TEU

100% → 240,000 TEU

B. Aktau Commercial Performance

2024:

Revenue — KZT11.377bn

EBITDA — KZT3.401bn

Net profit — KZT3.284bn

EBITDA margin:

~29.9%

Net profit margin:

~28.9%

Reported payments on two DBK loans:

~KZT1.042bn

Simple EBITDA/payment comparison:

~3.3×

The comparison is not a formal DSCR, but it demonstrates positive operating earnings relative to the identified loan payments.

C. Georgian Railway

2024:

Revenue — ~GEL648.3m

Adjusted EBITDA — ~GEL220.6m

2025:

Revenue — ~GEL612.4m

Adjusted EBITDA — ~GEL192.0m

Net profit — ~GEL152.7m

Enterprise-level profitability is therefore positive.

However, these results cannot be attributed entirely to Middle Corridor traffic.

D. CKU Minimum Financial Threshold

Debt:

~US$2.3bn

Maturity:

35 years

Zero-interest principal-recovery floor:

~US$65.7m/year

Illustrative net-cash sensitivities:

US$10/tonne → 6.57m tonnes

US$20/tonne → 3.29m tonnes

US$30/tonne → 2.19m tonnes

US$40/tonne → 1.64m tonnes

US$50/tonne → 1.31m tonnes

These are not forecasts or actual debt-service requirements.

They exclude interest, O&M, maintenance, capital renewal, tax, working capital and equity return.

E. Financial Tests by Asset Type

Commercial Infrastructure

Examples:

ports;

terminals;

vessels;

project-company railways.

Test:

Revenue − O&M − Financing Cost

Multipurpose Commercial Networks

Examples:

KTZ;

Georgian Railway;

Türkiye’s railway network.

Test:

Incremental Revenue + Operating Savings − Incremental Financing/O&M

Public Economic Infrastructure

Example:

TRACE highway.

Test:

Economic Return + Fiscal Sustainability

Direct commercial break-even is not an appropriate standalone measure.

F. Public-Exposure Test

Where project revenue is insufficient, the research should identify whether the shortfall is absorbed through:

private equity loss;

SOE resources;

sovereign debt service;

budget subsidy;

government recapitalization;

called guarantee;

refinancing;

or:

higher charges on transport users.

Only after tracing this chain can underutilization properly be connected with public financial burden.

G. Capital-Productivity Test

For every major future project, five questions should be answered:

1. What precise bottleneck is being removed?

2. What additional traffic will use the capacity?

3. What additional commercial or economic value will that traffic generate?

4. What financing obligation is being undertaken?

5. Who carries the shortfall if projected traffic or economic benefits do not materialize?

This provides a more effective investment discipline than comparing project cost with corridor tonnage alone.

FINAL RESEARCH FINDING

The Middle Corridor is not one financial project.

It is a chain of commercially different assets financed through commercially different instruments and serving different combinations of transit, regional and domestic demand.

Some assets are already profitable.

Some possess substantial unused capacity.

Some interfaces are approaching their existing limits.

Some investments are justified by wider economic returns rather than direct freight income.

Some of the largest projects have yet to begin generating revenue.

The appropriate policy question is therefore neither:

“Is the Middle Corridor successful?”

nor:

“Is the Middle Corridor overbuilt?”

The more rigorous question is:

Does each additional investment remove a genuine economic constraint and create sufficient commercial, strategic or wider economic value relative to the capital and financial risk undertaken?

If that discipline is maintained, geopolitical diversification and economic sustainability can reinforce one another.

If it is not, strategic redundancy can gradually become expensive unused capacity.

The distinction will ultimately be determined not by the amount of infrastructure constructed, but by the productivity of the capital invested in it.

Trade Facilitation Network (TFN) Research Team

Under the supervision of Muhammad Anwar Founder & Chairman Trade Facilitation Network