Capital and Asset Market for Georgia`s Transit Routes

2026-09-02

In general, the main function of the exchange is to organize the market so that many buyers and sellers can find each other, determine the price transparently and execute the transaction safely. In other words, the exchange is an organized market that connects demand and supply and creates a market price from them.

6 main functions of the exchange

1. Connecting buyers and sellers

The exchange creates a single space where participants can find each other.

2. Price formation

If many buyers are trying to buy and there is little supply, the price increases. If there is more supply, the price decreases. That is, the exchange creates the market price.

3. Transparency

Participants can see at what price and in what volume transactions are taking place. This reduces informational advantage and hidden prices.

4. Liquidity

The owner of the asset should be able to sell it when he needs a buyer. The more participants there are, the more liquid the market is.

5. Standardization

The exchange sets the rules: what is sold, in what units, what quality, how the transaction is concluded and how the settlement is made.

6. Trust and security

The exchange infrastructure and the associated clearing and settlement systems reduce counterparty risk — that is, the risk that the other party will not fulfill the agreement.

That is why there are different types of exchanges

Commodity - oil, grain, metal, etc.

Stock - shares and bonds of companies.

Energy - electricity, gas and other energy products.

Forex - currencies.

Futures/derivatives - future delivery or price contracts.

Logistics - demand and supply of cargo transportation and transportation capacity.

And here comes an important point:

The exchange does not always trade physical goods. It can trade rights, securities, contracts, or future income.

For example, a factory is not “sold” on a stock exchange — a share of the company that owns the factory is sold.

The most interesting question:

If the Georgian transit corridor is an “economic resource,” what exactly should be the standardized unit that the exchange will bring to the market?

If we answer this question correctly, we can already determine whether Georgia really needs a “transit exchange” and what it should look like.

Georgian Transit Exchange (Concept)

Its main idea would be:

The flow of cargo passing through Georgia → real economic asset → investment product → capital → new infrastructure → more cargo.

In other words, a self-reinforcing cycle is created.

1. What would the exchange finance?

● Ports and harbors

● Rail infrastructure

● Logistics centers

● Customs/warehouse complexes

● Container terminals

● Truck fleets

● Cold chain infrastructure

● Energy facilities serving the corridor

● Digital logistics platforms

● Insurance and finance companies

● Infrastructure for new transit routes.

2. What would be “traded” on the exchange?

Here’s the interesting part.

A. Shares

For example, a logistics center was built for $100 million. The company that owns it can place, say, 30% on the stock exchange:

Logistics Hub Georgia PLC → 30% shares → investors

The company receives capital for expansion by selling shares, and the investor (shareholder) receives a share in the future profits of the asset.

B. Infrastructure bonds

For example: “Anaklia Terminal 10-year bond”

The investor provides the project with $100 million (i.e. by selling bonds to individuals and legal entities).

The project pays, for example, a fixed interest income and returns the principal after 10 years. This is especially important for projects where revenues are relatively predictable.

C. Transit infrastructure funds

This may be the most powerful tool. For example:

Georgia Transit Infrastructure Fund

The fund raises $500 million and invests in:

● Ports

● Rail terminals

● Warehouses

● Logistics parks

● Container infrastructure.

A typical investor no longer needs to evaluate a separate port or terminal — he buys a share of the fund.

3. And the most interesting — “Transit Revenue Securities”

A completely new instrument can be created here. Let’s say a specific freight corridor generates certain taxes and fees per year. A special investment instrument can be created, the income of which is tied to the cash flows generated from the use of the corridor.

For example: Middle Corridor Revenue Note

The investor finances the infrastructure and in return receives income from the cash flows generated by the project/asset. This is very similar to the project finance + capital markets model.

4. The exchange would have a second “layer” — a logistics exchange

Here, a completely different type of trade begins.

For example:

Cargo: China → Georgia → Europe

Carrier: Free container

Railway: Free capacity

Warehouse: 5,000 m² of free space

Terminal: 200 TEU free capacity

All of this could become the subject of a real-time market offer.

So:

The stock exchange finances the infrastructure.

The logistics exchange uses this infrastructure.

These two systems reinforce each other.

5. How would it work in real life?

Let's say Georgia needs a new 500,000 TEU logistics terminal.

Project cost:

$300 million

Financing model:

$80 million — founders’ capital

$70 million — bank loan

$100 million — infrastructure bonds

$50 million — investment fund

The terminal starts operating.

Then: cargo → terminal → service fee → income → investor.

At the same time, if the company is successful, the value of its shares increases. Thus, the physical flow of transit is transformed into a financial asset.

6. Why might this be particularly interesting for Georgia?

Because Georgia’s main resource is not just territory. It is:

Geography + port + railway + roads + energy + customs + financial system + international trade.

If we perceive all this only as infrastructure, Georgia receives transit fees.

If we add to this the capital market, we can get:

Transit fees + financial services + investments + asset appreciation + banking/insurance revenues.

In other words, Georgia is trying to become not just a “bridge”, but a “bridge financial center”.

7. Final architecture

The “Georgian Transit Exchange” should not only be a place where company shares are traded.

It should be an institution that connects the real economic assets of the transit corridor — cargo flows, infrastructure, capacity and future revenues — with private capital.

In this model, Georgia can try to create a regional hub where Central Asia - Caspian Sea - Caucasus - Black Sea - Europe corridor projects will not only pass through, but will also be financed, insured, traded and valued.

Why does an exchange exist at all?

It helps:

■ Companies — to raise money

■ People — to invest and make a profit

■ The economy — to develop

If we look at this concept at the level of a state strategy, the next step is already very interesting: what should the specific business model of such an exchange look like — who owns it, who regulates it, what licenses are needed, and what products should be launched on day one.

Zurab Maghradze, DBA