Baku expands Middle Corridor logistics, curbs green power export hopes

Azerbaijan is advancing its Middle Corridor infrastructure through a spate of bilateral agreements with Turkmenistan, Kazakhstan, and Uzbekistan. The summer push centres on establishing a joint trans-Caspian cargo fleet, simplifying seaborne tariff regimes, and building an integrated logistics hub near Baku's port. Khurram Teshabayev, Uzbekistan's deputy trade minister, described the planned hub as "one of the key projects for developing [bilateral] transport and logistics infrastructure."

By linking this facility directly to Azerbaijan’s rail network, the goal is to slash transit times for Uzbek goods bound for European markets. The operational upgrades target the physical and bureaucratic bottlenecks that have historically constrained the Caspian route. "These initiatives will improve the efficiency of multimodal transport, make logistics chains more sustainable and reduce transport costs for exporters," Teshabayev said.

For shippers and commodities traders, reduced friction and lower freight costs translate directly into improved margins on east-to-west cargo. "The volume of cargo transportation along this route has been steadily growing, the range of exported products is expanding," he added.

The commercial payoff is already evident. Bilateral trade between Uzbekistan and Azerbaijan hit $80.1 million in the first quarter of 2026, surging 43% year-over-year. Both governments have anchored their ambitions to a target of $1 billion in annual trade turnover by 2030. Further streamlining the route, Kazakh and Azerbaijani officials will introduce a digital road transport permit system in 2027 to eliminate delay-inducing paperwork.

Energy export targets face reality check

While freight logistics are accelerating, the region's parallel ambition to serve as a green electricity bridge to Europe is faltering. A planned trans-Caspian power line was initially projected to export up to 5 gigawatts (GW) of wind- and solar-generated electricity from Uzbekistan and Kazakhstan to Azerbaijan and onward to Europe by 2030.

That target now appears highly optimistic. Both Central Asian states are currently grappling with domestic electricity deficits as they pursue rapid, power-thirsty economic expansion. While they are developing green energy initiatives, they are simultaneously building nuclear and coal-fired plants to satisfy local demand. This leaves a shrinking surplus of power available for international markets. Teshabayev warned that Uzbekistan’s electricity export capacity might only reach 2 GW, though he did not specify a timeframe for achieving even that reduced figure.

For European utilities and energy investors, the capacity downgrade suggests Central Asia will not be a reliable near-term solution for continental power diversification. Logistics operators stand to benefit from a faster trade route, but the highly touted flow of Central Asian green energy into Europe will likely fall well short of initial projections.