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Trans-Afghan Rail Corridor

Kazakhstan, Uzbekistan, and UAE Study CASA Rail Route to Indian Ocean

Kazakhstan, Uzbekistan, and the United Arab Emirates have agreed to study a proposed railway corridor through Afghanistan to Pakistan’s seaports. The transport ministries of Kazakhstan and Uzbekistan and the UAE Ministry of Energy and Infrastructure signed a memorandum on the Central Asia-South Asia (CASA) project on September 30. They agreed to study its technical and economic feasibility and examine possible financing. The memorandum leaves the route and construction timetable open and provides no cost estimate. Kazakhstan and Uzbekistan are both landlocked, and Uzbekistan is one of only two countries worldwide that must cross at least two national borders to reach the open sea. Kazakh authorities estimate that CASA could eventually carry up to 10 million tons of freight a year toward Karachi and Gwadar. Uzbekistan is working with Afghanistan and Pakistan on a railway from Termez through central Afghanistan to Kharlachi on the Pakistani border. The three countries agreed in July 2025 to prepare a feasibility study. Estimates put the cost at around $7 billion, although some have been higher. Kazakhstan is involved in a separate proposal from Torghundi on the Turkmen border through Herat and Kandahar to Spin Boldak near Pakistan. In April 2025, Kazakhstan and Afghanistan signed a protocol of intent, with the Torghundi-Herat railway and a logistics center in Herat envisaged as an initial stage. A new 43-kilometer section of the Khaf-Herat railway connecting Afghanistan with Iran was inaugurated on September 28. Kazakhstan’s Integra Construction KZ helped build it, and Afghan authorities say work is under way on further links from Herat toward the Turkmen and Pakistani borders. A study by the Moscow-based Institute of World Economy and International Relations (IMEMO) found that Afghanistan’s Taliban-led authorities had signed more than 15 railway-related agreements by March 2026. By then, no new mainline track had entered service under those initiatives, and active projects represented less than 1% of the estimated cost of the announced plans. Dauren Ilesaliev, a professor at Tashkent State Transport University, points to the need for steady freight. “Having railway infrastructure does not guarantee that it will work,” Ilesaliev said. Countries along the route would also need to agree on a through-tariff. Kazakhstan’s trade with Afghanistan could provide some of that freight. Bilateral trade reached $581.1 million in January-July 2026, with Kazakh exports accounting for $572.9 million. Flour accounted for $215.6 million and wheat for $122 million of those exports. Kazakhstan has also explored prospective mineral deposits in Afghanistan’s Nuristan Province and is discussing exports of locally assembled vehicles. In an interview with Novastan, Uzbek analyst Aziza Mukhammedova said a corridor’s value to Afghanistan would depend on the jobs and investment it generates there, alongside transit freight. She also cited unresolved financing as a challenge. The UAE sits outside the proposed route, and the memorandum names neither an Emirati company nor a possible investment amount. If a trans-Afghan line is built, Uzbekistan’s China-Kyrgyzstan-Uzbekistan railway could form part of a rail route from China to Pakistan. For Kazakhstan, CASA would provide an Indian Ocean outlet alongside the...

Railway Digitalization

EBRD Provides €38.4 Million for Digital Transformation of Uzbekistan Railways

The European Bank for Reconstruction and Development (EBRD) will provide a loan of up to €38.4 million to O’zbekiston temir yo’llari (UTY), the country’s national railway operator, to digitalize transport management and improve cybersecurity. According to the EBRD, UTY owns and operates a 6,950-kilometer railway network and is responsible for up to 40% of freight transported in Uzbekistan. Some dispatching and scheduling work remains manual, as do parts of operational control. The financing will allow UTY to introduce modern digital traffic and transportation management systems and upgrade cybersecurity protections for its IT infrastructure. The EBRD said the changes should improve the safety and reliability of railway operations while allowing UTY to manage train movements and network capacity more efficiently and reduce costs. The planned cybersecurity measures will be aligned with international best practices. The Bank also links the project to the development of the Trans-Caspian Transport Corridor, also known as the Middle Corridor, which connects Central Asia with the South Caucasus and onward to Europe. Landlocked Uzbekistan connects to the corridor through neighboring countries before cargo crosses the Caspian Sea. The project is the EBRD’s first public-sector initiative of this kind in Uzbekistan and is specifically focused on the digital transformation of the national railway operator. As previously reported by The Times of Central Asia, the EBRD has also provided a loan of up to €20 million to Uzbek pharmaceutical manufacturers Samarkand England Eco-Medical and Bayan Medical to expand production. To date, the EBRD has invested almost $6.9 billion (€6 billion) in Uzbekistan through 210 projects, with most of the funds supporting private entrepreneurship. Uzbekistan has been the largest recipient of EBRD funding in Central Asia for each of the past six years.

Galkynysh Gas Field

Turkmenistan Expands Galkynysh Gas Field With $5.1 Billion Fourth Phase

Turkmenistan has renewed its focus on the $5.1 billion fourth phase of the Galkynysh gas field, with Gurbanguly Berdimuhamedov telling the Halk Maslahaty on September 23 that the expansion would increase gas production and boost the country’s export capacity. The CNPC-built project, launched in April, is expected to add ten billion cubic meters of commercial gas capacity a year. The fourth phase involves drilling production wells and building a commercial gas treatment facility. CNPC is also responsible for gas gathering and treatment systems, pipelines, and related infrastructure. Although CNPC is building the project, Turkmenistan is financing the expansion itself. In March, state-owned Türkmengaz was authorized to sign a turnkey design-and-construction contract with CNPC Amudarya Petroleum Company Ltd. Work on the fourth phase officially began on April 17. Galkynysh, in southeastern Turkmenistan, is one of the world’s largest gas fields and is central to Ashgabat’s plans to expand gas exports. China remains the main buyer of Turkmen gas, with supplies flowing through the Central Asia-China gas pipeline via Uzbekistan and Kazakhstan. Beijing imports around 30 billion cubic meters of Turkmen gas annually, so the planned additional capacity at Galkynysh would be roughly one-third of current annual supplies to China. Turkmenistan has not said how the additional ten billion cubic meters will be divided between domestic use and exports, or which export routes would carry any additional volumes. One potential outlet is TAPI, the planned Turkmenistan-Afghanistan-Pakistan-India pipeline, with a design capacity of 33 billion cubic meters per year. Construction of the 153-kilometer section from the Turkmen border toward Herat began in September 2024. By mid-September 2026, 122.3 kilometers of pipe had been welded and laid in Herat Province. As previously reported by The Times of Central Asia, construction of TAPI is advancing in Herat, while Turkmenistan is exploring supplying gas to the local Afghan market before the full pipeline reaches Pakistan and India. No timetable has been announced for extending the route beyond Herat.

Start-ups

Central Asian Startups Go Global

Startups with their roots in Central Asia are increasingly building businesses for customers in the United States, Europe, Asia, and the Middle East. International funds are investing hundreds of millions of dollars in these companies, founders are joining Y Combinator and other Silicon Valley programs, and some startups are moving their headquarters abroad while retaining development teams and ties to the region. Central Asian startups attracted a record $320 million in 2025. However, a large share of the funding was concentrated in just two deals: Higgsfield AI and Uzbekistan’s Uzum accounted for 61% of the total. Excluding them, the market amounted to $124.5 million, still 31% higher than in 2024. This points to two aspects of the current growth: venture capital in the region is already measured in hundreds of millions of dollars, but remains heavily concentrated in a handful of companies. Relatively small technology teams from Central Asia are incorporating in the United States, raising money from American investors, and selling products to global customers. Kazakh Roots, American Market So far, the trend is most visible in Kazakhstan. In 2025, venture investment in Kazakh startups reached $209 million, up from $71 million a year earlier, while the aggregate valuation of funded Kazakh startups stood at $2.16 billion. RISE Research also reported that U.S.-focused startups with Kazakh roots raised more than $214 million. One of the biggest examples is Higgsfield AI, whose co-founders include Uzbekistan-born Alex Mashrabov and Kazakhstan’s Yerzat Dulat. Based in San Francisco, the company develops AI tools for generating images and video. In August 2026, Higgsfield raised $400 million in a Series B round at a $5.4 billion valuation. The round was led by DST Global, with investors including Goldman Sachs Alternatives, Tribe Capital, Intel Capital, and other international funds. By then, the company had more than 30 million users. In September, Higgsfield said its technology was being used in campaigns for 390 Fortune 500 companies. Another route into the U.S. market runs through Y Combinator, one of Silicon Valley’s best-known startup accelerators. In 2025, three startups with Kazakhstani founders – Nozomio, Leaping AI, and Hillclimb – joined the program. Arlan Rakhmetzhanov’s Nozomio develops tools that help AI agents work with large software codebases. After Y Combinator, the company raised $6.2 million from CRV, BoxGroup, LocalGlobe, and other investors. Rakhmetzhanov began working on the project while still in school before moving its development to the United States. Leaping AI, whose co-founder and chief technology officer Arkadiy Telegin is from Kazakhstan, develops voice AI agents for businesses. The company went through Y Combinator, raised a $4.7 million seed round, and shifted its center of operations from Germany to San Francisco. Hillclimb, whose founders include Kazakhstan’s Ibrakhim Ustelbay, develops data and virtual environments for training AI models through reinforcement learning, in which an algorithm improves by receiving feedback on its actions. The U.S. market is also attracting startups outside Y Combinator. Kazakh entrepreneur Bakytzhan Dos is developing Nace.AI in the United States, a platform designed for complex enterprise workflows...

Pharmaceutical Manufacturing

Kyrgyzstan Plans $1 Billion Pharmaceutical Industrial Park

A $1 billion pharmaceutical industrial park is planned in Kyrgyzstan as the country seeks to expand domestic drug production in a market still dominated by imports. The National Investment Agency signed a memorandum on the project with 21st Century Biomedicine on September 29. The full-cycle complex is planned for a 20-hectare site and would be developed in three stages over six years. The park is expected to include a research center, drug-production facilities, a medical devices center, and a business incubator. Less is known about 21st Century Biomedicine itself. The company has little visible public profile, and no clear record of previous pharmaceutical projects appears in publicly available sources. Kyrgyz reports say Bishkek-based MedPharm Consulting will provide organizational, technical, and legal support for the development. The proposal comes amid growing Chinese interest in Kyrgyzstan’s pharmaceutical sector. In December 2024, the government approved an investment agreement for a Kyrgyz-Chinese pharmaceutical project led by Standard Pharm Group, with planned investment of more than $41 million. Chinese investors have since discussed further projects, including a pharmaceutical plant using locally grown medicinal herbs. Drug production at the proposed industrial park is planned to comply with the Eurasian Economic Union’s Good Manufacturing Practice standards, which set common requirements for pharmaceutical manufacturing and quality control across Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Meeting those standards would be one requirement for exporting medicines within the EAEU. According to the National Investment Agency, domestic production currently covers around 4% of Kyrgyzstan’s pharmaceutical needs. If the park is completed, the project is expected to raise the country’s pharmaceutical self-sufficiency to 25–30%. The proposed development is also expected to create 2,500–3,000 direct jobs and more than 10,000 indirect jobs. Kyrgyzstan remains heavily dependent on foreign medicines. In November 2025, a Health Ministry official said that imports accounted for around 97% of medicines sold in the country, with domestic producers supplying about 3%. The authorities are seeking to develop domestic production while also expanding infrastructure for storing and distributing medicines. In September, construction began in Bishkek on a state pharmaceutical warehouse and logistics complex for Kyrgyzpharmatsiya, the state enterprise responsible for centralized procurement of medicines and medical supplies for public healthcare institutions. The new facility, worth around $7.4 million, is intended to improve the storage and nationwide distribution of pharmaceuticals. For now, however, the proposed $1 billion pharmaceutical park remains at the memorandum stage.

AIIB

AIIB and Uzbekistan Agree on $5 Billion Infrastructure Project Pipeline

The Asian Infrastructure Investment Bank (AIIB) and Uzbekistan have agreed on a pipeline of potential infrastructure projects worth up to $5 billion for 2026-2029. The two sides also signed a $1.5 million grant agreement to help prepare a project to modernize the country’s electricity transmission network. The updated Multi-Year Rolling Pipeline (MYRP) was signed on the sidelines of the AIIB’s 11th Annual Meeting in Doha. The document identifies areas for potential financing through 2029. The $5 billion figure represents a pipeline of prospective investments, rather than loans already approved by the bank. Uzbekistan is a founding member of the AIIB and is the bank’s largest partner in Central Asia, accounting for 51% of its operations in the region, according to Uzbekistan’s Ministry of Investment, Industry and Trade. Tashkent is seeking to expand cooperation on cross-border transport, energy, and water projects, while bringing more private capital into infrastructure development. The AIIB also agreed to provide a $1.5 million grant to help prepare the electricity transmission project. The funding will support technical studies, assessments of investment needs and climate risks, and preparations for integrating new solar and wind power plants into the grid. The work will focus on the southern energy corridor between the Surkhandarya and Samarkand regions and on the Fergana Valley. The studies are intended to identify bottlenecks in the transmission network and options for increasing its capacity. Grid modernization is becoming one of the key challenges in Uzbekistan’s energy transition. The government says renewable energy accounted for around 30% of electricity generation in 2025 and aims to raise the share to 54% by 2030. Connecting additional generating capacity will require both an expansion of the high-voltage transmission network and improvements in its reliability. As previously reported by The Times of Central Asia, Uzbekistan plans to commission more than 17 GW of additional renewable energy capacity and build around 6,000 kilometers of high-voltage transmission lines by 2030. The expansion of green generation is becoming increasingly important as domestic gas production declines: Uzbekistan, once a net gas exporter, became a net importer in 2023.