Armenia: Betting on a Logistics Crossroads Between Europe and Asia

Three million inhabitants, no access to the sea, and two of its four borders still closed: on paper, Armenia has nothing to suggest it could become a logistics hub. Yet this has been the ambition proclaimed by Yerevan, the capital, for several years, driven by closer ties with the European Union and Emmanuel Macron’s visit last May. “Armenia’s logistics sector is currently at a pivotal moment, caught between structural constraints and emerging opportunities,” summarizes George Akhalkatsi, who headed the European Bank for Reconstruction and Development (EBRD) office in Yerevan until this summer, before taking over its counterpart in Tunisia in September. The country’s geographic position, at the crossroads of Europe, the Middle East and Central Asia, is a natural asset—reinforced by initiatives such as the North-South Corridor and the government’s “Crossroads of Peace” program, launched in 2023 to reopen road and rail links with all four neighbors (Turkey, Azerbaijan, Georgia and Iran), which have been closed for decades. But the assessment remains unequivocal: local logistics suffers from an almost exclusive reliance on road transport, dependence on Iranian and Georgian ports, and customs procedures that are still far from international standards. “Armenia is not yet fully integrated into regional and global supply chains,” acknowledges George Akhalkatsi (who is himself Georgian), adding that this shortfall itself points to an opportunity.

This is precisely where most of the EBRD’s efforts have been focused in recent years. The bank has financed the construction of customs and logistics centers in Syunik and Yerevan, designed to turn fragmented procedures into a one-stop-shop system. “The objective is to significantly reduce customs clearance times, introduce a modern, digitized customs environment, and improve transparency for private operators,” explains George Akhalkatsi. These two sites are located along the North-South Corridor, intended to link India to Europe via Iran and the Caucasus. It should also be noted that the regional landscape is becoming more complex, and has grown even more crowded since the joint peace declaration signed in Washington in August 2025 by Armenia and Azerbaijan.

In addition to the North-South Corridor, the government’s “Crossroads of Peace” initiative coexists—and sometimes clashes—with two other projects: the Middle Corridor, driven by trade demand rather than a diplomatic initiative, which links Central Asia to Europe via the Caspian Sea while, for now, largely bypassing Armenia; and the TRIPP corridor, a public communications framework advanced by Washington following the August 2025 agreement, which provides for a link through Armenian territory between Azerbaijan and its Nakhchivan exclave. “For now, the question is how the Middle Corridor could pass through Armenian territory,” notes Johnny Melikyan, senior researcher at the Orbeli Center, an analysis platform close to the Armenian prime minister’s office, interviewed by specialist outlet Caucasus Watch.

When it comes to logistics real estate itself, George Akhalkatsi makes no secret of how low the market’s starting point is. “Logistics real estate—warehouses, distribution hubs, logistics parks—is a missing pillar, but one whose importance is gradually becoming clearer,” he observes. Armenia’s logistics model remained fragmented for a long time, with minimal modern warehousing capacity and limited integration into supply chains. The landscape is nevertheless beginning to change: growing trade and e-commerce volumes are creating nascent demand for modern facilities, while public investment in infrastructure, starting with customs centers, is laying the foundations for a future private market. “Armenia is gradually moving toward a more organized logistics real estate segment, particularly around key corridors and urban hubs such as Yerevan,” specifies our EBRD source.

To date, the most emblematic project of this ambition remains largely virtual: a “dry port” and an industrial free zone near Gyumri, the country’s second-largest city, intended to combine a container terminal, warehouses and an industrial park connected to rail, the airport and the North-South highway. Budgeted at $37 million in public funding and under study for more than three years, it is still seeking an operator and international investors—discussions are underway with the Asian Development Bank and several Gulf funds. Its potential is real but uncertain, as Shant Karabajak, an urban development expert quoted by Eurasianet , puts it: “Politically, the project is easy to sell, but its success will depend on the existence of sufficient freight volumes to make it economically viable.”

Against the backdrop of all these developments, closer institutional ties with the European Union are playing a structuring role. Since it entered into force in 2021, the Comprehensive and Enhanced Partnership Agreement (CEPA) has allowed 96% of Armenian products to enter the European market duty-free, which has become the country’s leading export outlet. “Armenia’s growing relationship with the EU is a structural driver of change,” says George Akhalkatsi, for whom the CEPA “helps bring Armenian regulations into line with European standards” and, ultimately, “strengthens Armenia’s role in supply chains connected to Europe.” The first EU-Armenia summit, held in Yerevan on May 5 alongside Emmanuel Macron’s visit, launched a connectivity partnership covering transport, energy and digital technology. In addition, Vinci and Razel-Bec signed a letter of intent to take part in the construction of the Bargushat tunnel, a section considered among the most complex on the North-South highway. For George Akhalkatsi, this sequence opens “a clear and growing window of opportunity” for French players in three areas in particular: logistics infrastructure development (engineering, concessions and design), the construction of parks and warehouses, and digital supply chain solutions. “Given French expertise in integrated logistics platforms and green infrastructure, there is strong potential for high-value partnerships,” he believes.

According to the Georgian expert, a mature Armenian market would, within 10 years, combine fully operational multimodal connectivity with digitized customs procedures and minimal clearance times. It would also mean a structured logistics real estate market, integration into regional corridors and a stronger presence of international operators. Three conditions would make this possible: continued infrastructure investment, regulatory and institutional modernization, and—the most uncertain condition—lasting geopolitical stability enabling borders to open. “If these elements come together, Armenia can move from being a peripheral country in supply chains to becoming a connector economy.” Armenia will still need to turn this diplomatic ambition into square meters of warehouse space.