Georgia and Armenia at an Investment Crossroads: A border that is starting to

For most of the past three decades, the border between Georgia and Armenia was a place where trucks waited and business plans ended. Armenia had only two open land borders, with Georgia and Iran. Georgia was its main road to the Black Sea, to Russia and to Europe. Investors looked at the two countries separately, and usually looked at Georgia first. That picture is changing. Both economies have grown fast since 2022.

Georgia’s largest bank now owns Armenia’s largest lender. And on 28 October 2026, Armenia’s parliament ratified the framework agreement with the United States on the Trump Route for International Peace and Prosperity (TRIPP), a transport link across southern Armenia. Routes that were closed for a generation are now being negotiated on paper, with budgets and timetables.

None of this makes the South Caucasus a safe bet. The peace treaty with Azerbaijan is still unsigned, and the region’s trade is still exposed to Russia, Iran and the war in Ukraine. But for an investor based in Tbilisi, the question is no longer whether Georgia and Armenia will become more connected. It is who will be positioned when they do.

I write this as someone who has lived in Georgia for two decades and who has just finished a book on Armenia’s economy and its neighbors. The book follows the decisions of factory owners, freight operators, banks and investors on both sides of the border. Some of what I found surprised me.

Two fast-growing economies that still trade little

Both countries came out of the regional shocks of 2022 with unusually strong growth. According to Geostat, Georgia’s real GDP grew by 7.5% in 2025, after 9.7% in 2024, and nominal GDP reached about $38.1 billion, or $10,296 per person. Armenia’s statistical committee reported real growth of 7.2% in 2025, after 5.9% in 2024, led by construction (+20.2%) and services (+10.6%).

Author:
Dr. Gil Feiler

Yet the two neighbours still trade surprisingly little with each other. Georgian data put bilateral trade at $854 million in 2024: $618 million of Georgian exports and $237 million of imports from Armenia. Turnover was 24% lower than in 2023, mainly because re-exports linked to the war in Ukraine fell back and copper ore shipments dropped.

The more useful number is hidden inside that total. Georgia’s exports of its own goods to Armenia, excluding re-exports, reached a record $197 million in 2024, up from $166 million a year earlier. That is the trade that survives when the temporary flows disappear: goods made in Georgia and bought by Armenian households and firms. It is small, but it is growing on its own merits.

Armenia’s overall foreign trade fell 29% in 2025, as the re-export boom to Russia unwound. For an investor, this is a reminder to look past headline turnover and ask which flows depend on war and sanctions, and which depend on what each economy actually makes.

Capital is already crossing the border

While trade statistics move slowly, capital has moved faster. In 2024, Bank of Georgia Group, now Lion Finance Group, completed the purchase of Ameriabank for about $303.6 million in cash. The price was 0.65 times net asset value and 2.6 times 2023 earnings. Ameriabank was Armenia’s largest lender, with 19.6% of the country’s loans at the end of 2023 and 22.5% of loans to companies. The EBRD kept 10%.

It is the largest deal of its kind between the two countries that I know of, and it changed how both markets look from London. A Georgian group listed on the London Stock Exchange now earns a meaningful part of its profit in Armenia. Its managers have to understand Armenian borrowers, Armenian regulators and Armenian growth. The deal turned the border into a line inside one balance sheet.

The early results are encouraging. In the third quarter of 2026, Ameriabank’s loan book grew 38.1% year on year in constant currency, while Lion Finance Group’s quarterly profit rose 21% to GEL 661.9 million.

It is not the only example. Georgia Capital’s pharmacy business has also expanded into Armenia, store by store, learning the market one location at a time rather than through a single large purchase. And investment runs the other way too: Armenian entrepreneurs own hotels, factories, logistics firms and trading companies in Georgia, and Armenian families from Javakheti to Tbilisi are part of Georgia’s business life.

What these cases share is that the investors knew both sides. They had people on the ground, relationships with regulators and a reason to believe that the two economies would draw closer. The rest of the market has been slower to follow.

New routes, and what they would change for Georgia

The biggest variable for both countries is the map. The TRIPP framework ratified by Armenia’s parliament on 28 October 2026, by 63 votes to 32, covers a road and rail link through Syunik connecting mainland Azerbaijan with Nakhichevan, together with energy and communications lines. A joint Armenian-American development company would run it, with the United States holding 74% and Armenia 26% for an initial 49 years. Armenia says sovereignty, customs and border control stay in Armenian hands.

Much remains open. The peace treaty with Azerbaijan has not been signed. Baku wants Armenia to change its constitution first, and the ruling party lacks the two-thirds majority needed to put a new constitution to a referendum. The technical terms for Armenian transit through Azerbaijan have not yet been agreed.

On 10 November, Armenia’s justice minister said more than 95% of the draft constitution had been discussed, with publication expected later this month; thirteen opposition groups have announced a joint campaign against it.

Meanwhile, the route itself has moved a step forward. On 6 November 2026, the United States, Armenia and Azerbaijan launched trilateral technical planning groups on transport and electricity transmission to prepare the route’s next phases. No construction timetable has been announced.

For Georgia, an opening of the region cuts both ways. Today, a large share of Armenia’s land trade with Russia and Europe passes through Georgian roads, ports and the Upper Lars crossing. New routes through Azerbaijan, and eventually Turkey, would give Armenian exporters alternatives. Some transit business could leave Georgia.

But the larger effect is likely to be positive. A South Caucasus with open borders becomes one market of about 17 million people instead of three fragmented ones. Georgian banks, insurers, retailers, logistics firms and builders already know how to operate in a small, open economy. They are better placed than almost anyone to serve a larger regional market. Georgia’s ports and the Middle Corridor gain more from a stable neighbourhood than from a closed one.

The missing piece: no public fund for the region

Here is the gap that struck me most while writing the book. An international investor who believes in the South Caucasus has very few ways to act on that belief. He can buy shares of Lion Finance Group or Georgia Capital in London, or of TBC Bank. These are good companies, but each is a single bet, and most of their business is in Georgia. Armenia’s own stock exchange is small, with few listed companies and limited daily trading.

As far as I am aware, there is currently no public fund, listed or open to ordinary investors, that invests across Georgia and Armenia as one region. Emerging-market and frontier funds may hold a Georgian bank, but the South Caucasus is a rounding error in their portfolios. Private equity funds and development lenders such as the EBRD and the ADB are active, but their money is not open to the public, and their horizons are set elsewhere.

This matters because the opportunities are growing faster than the channels to reach them. Banking and insurance are consolidating across the border. Pharmacies, food and consumer brands are following the Georgian playbook into Armenia. Logistics, warehousing and cold storage will be needed on any new route. Hydropower and solar projects need long-term capital. Hotels, tourism and real estate in both countries draw visitors from the Gulf, Israel, Europe and the wider region.

A regional fund would do more than give investors access. It would bring governance standards, audited reporting and pricing to companies that today raise money mostly from banks and family networks. It would give Armenian and Georgian savers, and the diaspora, a way to invest at home in something more diversified than a single property. The absence of such a vehicle is a market failure, and also an opportunity.

What investors should watch

The risks are real, and they should be stated plainly. A peace process that stalls would freeze the new routes. Both economies remain exposed to Russia, as a market, a source of remittances and a political pressure. Some of the growth since 2022 came from re-exports and from people and capital leaving Russia, and part of that has already reversed. Georgia’s own politics and its relations with the European Union have become a concern for some foreign investors. And small markets mean that one large deal can move the statistics.

Iran has also signalled opposition: a senior adviser to its leadership warned that Tehran would respond if its security red lines on the route were crossed.