Kyrgyzstan Business & Economy - The Times Of Central Asia

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Oil Refinery

Kyrgyzstan Signs $25 Million Deal for Kochkor-Ata Oil Refinery

Kyrgyzstan has signed a $25 million investment agreement for a new oil refinery in Kochkor-Ata, in the southern Jalal-Abad Region, as the country seeks to expand domestic production and reduce its heavy dependence on imported fuel. The agreement between the Cabinet of Ministers and Central Asian Energy LLC covers the construction and operation of the refinery. It was signed on July 20 by Minister of Economy and Commerce Bakyt Sydykov and the company’s general director, Shao Peipei. The plant is expected to have a planned annual output of 450,000 tons of petroleum products and create at least 300 jobs. The agreement stipulates that Kyrgyz citizens should account for at least 90% of its workforce. Sydykov said the project would support industrial development, create jobs, introduce modern technology, and strengthen Kyrgyzstan’s energy security. Shao said the company would invest $25 million under the agreement. The investor said the plant would produce gasoline and diesel in the K-5 and K-6 environmental classes, as well as bitumen and motor oils. The reference to K-6 is unclear because current Eurasian Economic Union fuel regulations classify motor fuels only through K-5. The Ministry of Economy and Commerce said construction was already underway and that the project’s first phase was expected to enter operation by the end of 2026. The ministry did not disclose the source of crude oil or explain whether the $25 million represents the refinery’s full cost, the investment covered by the agreement, or funding for its initial phase. The agreement comes as Kyrgyzstan faces renewed pressure from disruptions in the Russian fuel market. Deputy Energy Minister Nasipbek Kerimov said in early July that Kyrgyzstan consumes approximately two million tons of fuel and lubricants annually and receives almost 95% of that volume from Russia. He said Russian deliveries had declined slightly but that the country still had sufficient reserves. Russia has tightened fuel exports after Ukrainian drone attacks forced several major refineries to halt or reduce production. Gasoline output fell to about 65% of seasonal demand, according to Reuters calculations published on July 10. Kyrgyzstan receives Russian petroleum products duty-free under annual indicative balances within the Eurasian Economic Union. The disruption has highlighted the risks of relying overwhelmingly on one supplier. Kyrgyzstan is also modernizing its two largest existing refineries. The Kyrgyz Petroleum Company refinery in Manas, formerly Jalal-Abad, can process 500,000 tons of crude oil annually. It is undergoing a $410 million modernization project that is expected to be completed by the end of 2027. The upgraded plant is intended to produce AI-92 and AI-95 gasoline meeting K-4 and K-5 Eurasian Economic Union standards. The Junda refinery in Kara-Balta has an annual processing capacity of 800,000 tons. A $193.75 million modernization project is scheduled for completion by July 31, 2026. The work is intended to increase refining depth, improve efficiency, and expand domestic fuel production. Whether the new refinery reduces import dependence will depend largely on where it obtains crude oil. Kyrgyzstan’s limited domestic production means the plant could still rely on...

External Debt

The Central Asia Debt Divide: Why the Region’s Borrowing Risks Are Not the Same

Central Asia’s biggest debtor is not necessarily its most vulnerable. Kazakhstan accounts for roughly two-thirds of the region’s external liabilities, but much of that debt sits on corporate balance sheets rather than the government’s. Tajikistan owes a fraction of the amount, yet remains at high risk of debt distress. The contrast highlights the Central Asia debt divide. Kyrgyzstan and Tajikistan rely more heavily on sovereign and concessional borrowing, while Uzbekistan’s external liabilities are now split almost evenly between the public and corporate sectors. Based on the latest available figures from national authorities and international financial institutions, the combined external debt of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan approached $275 billion in early 2026. Turkmenistan has not been included in the estimate because the country does not publish comprehensive official external debt statistics that can be directly compared with those of its regional neighbors. The total is an approximate calculation compiled from national statistics rather than a regional aggregate published by a single institution. The countries also release their debt data for different reporting dates and use different classifications, requiring caution when making direct comparisons. Total external debt includes obligations owed to non-residents by governments, central banks, commercial banks, private companies, and, in some countries, local subsidiaries of foreign corporations. Government external debt is a narrower measure covering liabilities that are directly serviced or guaranteed by the state. China remains an important bilateral creditor, particularly in Kyrgyzstan and Tajikistan, while multilateral institutions provide much of the region’s infrastructure and public-sector financing. Kyrgyzstan: Rising Debt, but a Broader Creditor Base Kyrgyzstan’s public debt has risen alongside increased infrastructure spending and domestic borrowing, although its creditor base has become more diversified. A smaller share is now owed to a single bilateral lender, while multilateral financing and the domestic securities market have grown in importance. According to the Kyrgyz Ministry of Finance’s public debt data, the country’s total public debt stood at approximately $8.94 billion as of May 31, 2026, including around $6.1 billion in external obligations. The debt debate has also become part of President Sadyr Japarov’s broader economic narrative. In an interview with the Kabar national news agency published on October 8, 2025, Japarov said his government was continuing to borrow but argued that new loans were being directed toward commercial projects expected to repay their own financing rather than place an additional burden on the state budget. He also said Kyrgyzstan intended to repay its older debts by 2035. The International Monetary Fund said in its 2026 Article IV consultation that Kyrgyzstan had recorded strong economic growth for a fourth consecutive year, giving the authorities an opportunity to strengthen fiscal buffers and accelerate structural reforms. It also warned that the outlook remained exposed to significant downside risks. Kazakhstan: A Large External Debt, but a Different Risk Profile Kazakhstan accounts for the largest share of Central Asia’s external debt, but its headline figure can be misleading. Unlike several of its neighbors, the country’s external liabilities are dominated by corporate and intercompany borrowing rather...

Fuel Supply

Kyrgyzstan Fuel Crisis: Bishkek Relaxes Fuel Import Rules to Ease Supply Pressures

Kyrgyzstan has relaxed fuel import rules and extended restrictions on exports as it seeks to mitigate growing pressure on its domestic fuel market amid disruption to Russia’s refining sector. Under a July 13 resolution, the Kyrgyz Cabinet of Ministers suspended, until April 1, 2027, provisions of a 2019 government decree restricting the import of oil and petroleum products by road. The exemption had previously been due to expire on September 30, 2026. The change allows fuel to be delivered into Kyrgyzstan by road tanker, giving importers greater flexibility to obtain supplies through alternative routes. Other requirements governing fuel imports, including transportation safety rules and accompanying documentation, remain in force. The measure comes as Russia, the source of more than 90% of Kyrgyzstan’s imported petroleum products, has imposed temporary restrictions on gasoline exports after Ukrainian drone attacks reduced production at several Russian refineries. At the same time, the Cabinet amended the country’s export rules for petroleum products. The current export ban on crude oil, gasoline, diesel fuel, and other petroleum products transported by road or rail will now remain in effect until Kyrgyzstan’s domestic fuel demand is fully satisfied or until the EAEU’s common oil and petroleum products market becomes operational. According to the government, the changes are intended to stabilize the domestic fuel market and ensure adequate supplies for consumers. The latest measures add to a series of steps taken by Bishkek to address mounting fuel supply challenges. As previously reported by The Times of Central Asia, Kyrgyzstan is also seeking to increase domestic production of the country’s most widely used AI-92 gasoline by upgrading surplus stocks of lower-octane AI-80 fuel. Earlier this month, the government also eased its temporary fuel price controls after shortages emerged. Emergency price regulation introduced on May 25 established benchmark import prices of $860 per metric ton for AI-92 gasoline, $940 for AI-95 gasoline, $950 for diesel fuel, and $575 for liquefied petroleum gas. However, under a separate July 7 resolution signed by Chairman of the Cabinet of Ministers Adylbek Kasymaliev, AI-95 gasoline was removed from the list of socially significant goods subject to state price regulation, and retail price caps were abolished. The government said the changes were necessary to restore uninterrupted fuel supplies after AI-95 gasoline temporarily disappeared from filling stations in Bishkek.

Civil Aviation

Kyrgyzstan to Launch Direct Flight Between Bishkek and Urumqi

Kyrgyzstan’s Aero Nomad Airlines will launch a new direct route between Bishkek and Urumqi, the capital of China’s Xinjiang Uygur Autonomous Region, further expanding air connectivity between the two neighboring countries. According to the airline, the inaugural flight is scheduled for August 3 and will be operated using an Airbus A320 aircraft. The airline said the route would support trade and investment and encourage tourism and cultural exchanges between Kyrgyzstan and China. Xinjiang already has established air connections with Kyrgyzstan. In November 2025, China Southern Airlines resumed direct flights between Urumqi and Osh, Kyrgyzstan’s second-largest city. Earlier this year, Airports of Kyrgyzstan JSC also announced the launch of a new route between Osh and Kashgar, another major city in Xinjiang, to be operated by Chengdu Airlines. Xinjiang serves as Kyrgyzstan’s principal gateway to China. Most bilateral trade passes through the region via the Torugart and Irkeshtam border crossings, the two fully operational road links between the countries. According to Chinese Ambassador to Kyrgyzstan Liu Jiangping, bilateral trade reached a record $27.2 billion in 2025, representing a 20% increase compared with the previous year. Growing commercial ties have also been supported by institutional cooperation. In June 2024, the Kyrgyzstan-China Trade and Economic Cooperation Center opened in Urumqi, Xinjiang, to facilitate business contacts, promote investment opportunities, and support joint projects between companies from both countries. Kashgar is the Chinese starting point of the China-Kyrgyzstan-Uzbekistan railway, one of the region’s largest infrastructure projects. The planned line would connect western China with Central Asia. The Bishkek-Urumqi service adds another transport link between Kyrgyzstan and China as bilateral trade grows and work continues on the railway.

AI-92 Gasoline

Kyrgyzstan Seeks to Boost AI-92 Gasoline Production as Fuel Supply Pressures Persist

Kyrgyzstan is seeking to increase domestic production of AI-92 gasoline by upgrading surplus low-octane AI-80 fuel. The country continues to face rising fuel prices and supply uncertainty because it relies heavily on imports from Russia. Kyrgyz Petroleum Company (KPC) has issued a tender for chemical additives needed to produce AI-92 gasoline from AI-80 fuel. The company operates an oil refinery in Manas, formerly Jalal-Abad, in southern Kyrgyzstan. The facility can process 500,000 tons of crude oil annually. The refinery mainly produces AI-80 gasoline. Domestic demand for this grade has virtually disappeared, leaving significant stockpiles. Earlier this year, the government authorized exports of domestically produced AI-80 gasoline and diesel fuel to Tajikistan and Afghanistan. The move comes as Kyrgyzstan faces growing pressure from disruptions in the Russian fuel market. Russia supplies more than 90% of Kyrgyzstan’s imported petroleum products. It has imposed temporary restrictions on gasoline exports after Ukrainian drone attacks on oil-processing facilities reduced refinery output. Kyrgyzstan imports approximately 1.2 million tons of petroleum products annually. Domestic refineries currently satisfy only about 5% of national demand, while total annual fuel consumption is estimated at 1.6 million tons. KPC’s refinery is undergoing a $410 million modernization project designed to reduce the country’s dependence on imported fuel. SPEC Engineering, based in the United States, is carrying out the work. External investors are providing $200 million, and Kyrgyzstan’s government is contributing $110 million. Kyrgyzneftegaz, KPC’s parent company, is providing the remaining $100 million. When the project is completed at the end of 2027, the refinery is expected to begin producing AI-92 and AI-95 gasoline that meets K-4 and K-5 Eurasian Economic Union environmental standards. At the launch of the project in September 2024, President Sadyr Japarov said the refinery met only 6.5% of Kyrgyzstan’s demand for high-quality gasoline and diesel fuel. He said its share would rise to 32% after the upgrade. The Manas refinery is one of Kyrgyzstan’s two largest refining facilities. The other is the Junda refinery in Kara-Balta, also known as the Zhongda refinery. It is being upgraded, with completion scheduled for August 2026. As previously reported by The Times of Central Asia, Kyrgyzstan has recently eased its temporary fuel price controls in an effort to stabilize supplies. The government introduced emergency regulation of fuel prices on May 25. Benchmark import prices were set at $860 per ton for AI-92 gasoline and $940 per ton for AI-95 gasoline. The benchmarks for diesel fuel and liquefied petroleum gas were $950 and $575 per ton, respectively. However, a resolution signed on July 7 by Chairman of the Cabinet of Ministers Adylbek Kasymaliev removed AI-95 gasoline from the list of socially significant goods subject to state price regulation. It also abolished the caps on retail fuel prices set earlier. The government said the changes were intended to ensure uninterrupted fuel supplies after AI-95 temporarily disappeared from filling stations in Bishkek.

Almaty-Issyk-Kul Flights

Direct Flights Between Almaty and Lake Issyk-Kul Resume

Kyrgyzstan’s state-owned Asman Airlines will resume seasonal direct flights between Almaty, Kazakhstan’s largest city, and Lake Issyk-Kul, Kyrgyzstan’s leading summer tourist destination. One-hour flights will begin on July 10 and arrive at Issyk-Kul International Airport in the village of Tamchy on the lake’s northern shore. The service will operate twice a week, on Mondays and Fridays, in partnership with tour operator Kompas, Asman Airlines’ official partner in Kazakhstan. Round-trip fares start at $120. Asman Airlines currently operates three Dash 8 Q400 aircraft, Canadian-made short-haul turboprop planes capable of carrying up to 80 passengers over distances of up to 2,000 kilometers. The aircraft are used on domestic routes across Kyrgyzstan after the airline recently restored air links between Bishkek and several remote regional centers. Lake Issyk-Kul remains one of the most popular summer destinations for tourists from across Central Asia, particularly residents of Almaty looking for short weekend trips. The Almaty-Tamchy route is expected to make travel easier for visitors from southern Kazakhstan by significantly reducing travel time during the peak holiday season. By road, the journey from Almaty to Issyk-Kul currently covers more than 460 kilometers via Bishkek and usually takes around eight hours. Efforts to shorten the overland route are continuing. As previously reported by The Times of Central Asia, Kazakhstan and Kyrgyzstan have been advancing a long-discussed highway project intended to directly connect Almaty with Issyk-Kul. Although the two locations are only about 80 kilometers apart in a straight line, mountain ranges force travelers to make a long detour through the Kyrgyz capital. Issyk-Kul has also become more accessible to travelers from Kazakhstan’s capital. According to Kazakhstan’s Ministry of Transport, FlyArystan began regular flights between Astana and Issyk-Kul on July 3. The flights operate twice a week, on Mondays and Fridays, using an Airbus A320. On July 8, Asman Airlines also launched a seasonal direct service between Tashkent, Uzbekistan’s capital, and Lake Issyk-Kul.