BAKU, Azerbaijan, August 26. The full
development of the Middle Corridor will require not only physical
infrastructure but also a developed financial infrastructure
capable of attracting private investment, PMCG President Alex
Aleksishvili said.
Aleksishvili made the remarks at the 10th CAREC Think Tank
Development Forum in Tashkent, according to consulting company
PMCG.
According to World Bank estimates, cited by Aleksishvili, trade
volumes along the corridor could triple by 2030 and transport times
could be cut in half with the right investments and efficiency
improvements.
Trade between Azerbaijan, Georgia and Kazakhstan is expected to
increase by 37%, while their trade with the European Union could
rise by 28%.
Growth in trade flows will create demand not only for major
transport infrastructure, but also for related facilities,
Aleksishvili said.
“Rail infrastructure will require terminals, rolling stock and
warehousing capacity, while ports will need logistics and
processing facilities. Energy networks will require new capacity to
support generation and industry. The development of digital
connectivity, in turn, will drive demand for technology and data
infrastructure,” he said.
Aleksishvili stressed that many of these investments cannot be
financed solely through traditional bank lending.
Financial systems in Central Asia and the South Caucasus remain
largely dependent on bank financing, he said.
“The problem is therefore not only a lack of capital, but also
insufficient access to appropriate forms of financing,”
Aleksishvili said.
Private equity, mezzanine financing, private debt and hybrid
financial instruments could help bridge the gap, he said.
“These instruments can provide longer-term and more flexible
financing for companies planning expansion, investing in fixed
assets or implementing projects with a higher level of risk,” the
PMCG president said.
