TBLISI, Georgia (AFP) — Georgia on Monday announced plans to build a new deep-water Black Sea port in a US$2.5-billion project that aims to boost trade between China and Europe along the historic Silk Road route.

Prime Minister Giorgi Kvirikashvili said the ex-Soviet country had awarded the contract to build the port to a joint venture called Anaklia Development Consortium, made up of Georgia’s TBC Holding and US-based Conti International.

“The project will bring tremendous opportunities for Georgia and the entire region, making the new Silk Road concept fully operational,” Kvirikashvili told journalists.

Under President Xi Jinping, China has launched a multibillion US dollar drive to revive its strategic Silk Road trade routes on land and sea, to increase its footprint from central Asia to Europe.

Georgia aims to create a regional transport hub on the Black Sea’s east coast, competing with Turkish ports for cargo ships carrying Chinese goods for Europe.

The new port will serve large ships that cannot dock at the ex-Soviet country’s existing ports and instead go to Turkey to reload cargo onto smaller vessels.

The Georgian government will contribute US$100 million, while the rest will be financed by the ADC consortium.

Construction work is due to start late this year and is set to take three years, the ADC consortium said in a statement.

The port will be able to process 100 million tons of cargo annually and could generate 0.5 per cent of Georgia’s GDP by 2025, ADC said.

The Georgian premier said the project will include a 600-hectare industrial park with minimal taxation, calling this “a breath of fresh air for the Georgian economy”.

The port will be built at the village of Anaklia, which is strategically located on the shortest transit route from China to Europe.

“The project fits with the new concept of the ancient Silk Road proclaimed by the Chinese government: One Belt One Road,” the chairman of Georgia’s TBC Holding, Mamuka Khazaradze, told

AFP.

The ‘One Belt One Road’ route accounts for 26 per cent of Chinese foreign trade and is a focal point for US$40 billion in Chinese infrastructure investments through its Silk Road Development Fund.

Georgia, a Caucasus nation of 4.6 million, is seeking to capitalise on the revitalised trade route, building upon the free trade agreement it signed with the European Union in 2014.