Tajikistan Business Economy - The Times Of Central Asia

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Connectivity

EU Launches Platform to Mobilize Up to €2 Billion for Europe–Central Asia Connectivity

The European Commission launched a Connectivity Agenda Platform on June 23, 2026, and concluded statements of intent with international financial institutions expected to mobilize up to €2 billion ($2.3 billion) for transport, border-crossing and trade-facilitation projects across the Black Sea region and the South Caucasus. The initiative was unveiled at a high-level ministerial meeting in Brussels, hosted by European Commissioner for Enlargement Marta Kos, Commissioner for International Partnerships Jozef Síkela, and Commissioner for Sustainable Transport Apostolos Tzitzikostas. The meeting brought together transport ministers and senior officials from EU member states, as well as representatives from Armenia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Türkiye, Ukraine, and Uzbekistan, alongside international lenders, to advance connectivity projects under the EU’s Global Gateway strategy. The new platform is designed to coordinate investments and policy actions across transport, energy, digital connectivity, and trade. Participants also agreed to improve the operational efficiency of the Trans-Caspian Transport Corridor, a wider framework that includes the Trans-Caspian International Transport Route, or TITR, also known as the Middle Corridor. The route links China and Europe through Central Asia and the South Caucasus, offering an alternative to transport routes crossing Russia. The European Commission said the expected financing would support transport infrastructure, border-crossing modernization, and trade-facilitation projects aimed at improving freight movement across the corridor. “The Trans-Caspian Transport Corridor is becoming a vital bridge between Europe and Asia,” Síkela said, adding that the investments would help make the route faster, more reliable, and better integrated. Tzitzikostas said stronger transport links were critical for economic competitiveness and regional resilience. The platform’s launch came during Kazakh President Kassym-Jomart Tokayev’s official visit to Brussels, where he met with European Council President António Costa and European Commission President Ursula von der Leyen. In an EU–Kazakhstan joint statement, the leaders reaffirmed the strategic importance of the Trans-Caspian corridor and pledged deeper cooperation under the EU’s Global Gateway strategy. They also highlighted the EU’s role as Kazakhstan’s largest trade and investment partner and agreed to deepen cooperation in critical minerals, energy, transport, digitalization, and emerging technologies. Speaking at the Kazakhstan-EU roundtable in Brussels, Tokayev said Kazakhstan was investing heavily in infrastructure to position itself as a regional logistics hub connecting Europe, Central Asia, China, the Caucasus, and the Middle East. According to Tokayev, cargo volumes along the Middle Corridor have risen fivefold over the past six years, from 0.8 million tons to 4.1 million tons annually, with Kazakhstan targeting a capacity of 10 million tons. He said Kazakhstan has invested more than $35 billion in transport and logistics infrastructure over the past 15 years, with the Caspian ports of Aktau and Kuryk serving as major transit gateways. Tokayev also welcomed logistics agreements worth nearly $1 billion signed on June 23 by the Development Bank of Kazakhstan: one with the European Investment Bank, and a separate agreement with a banking syndicate including Commerzbank, JPMorgan Chase, and Standard Chartered, backed by guarantees from the Multilateral Investment Guarantee Agency (MIGA). A day earlier, Kazakhstan and European partners announced four transport-related agreements worth...

School Development Project

Tajikistan to Receive $20 Million Kuwait Fund Loan for Schools

Tajikistan will receive concessional financing equivalent to about $20 million from the Kuwait Fund for Arab Economic Development to implement an education-sector project. The funds will be used to build and equip schools in different regions of the country. According to Tajikistan’s Ministry of Finance, the agreement was signed in Vienna during a meeting between Finance Minister Faiziddin Qahhorzoda and Waleed Al-Bahar, acting director general of the Kuwait Fund for Arab Economic Development. The parties signed a loan agreement for the School Development project, under which the fund will provide Tajikistan with a concessional loan of 6 million Kuwaiti dinars, equivalent to about $20 million. Additional financing of $4.5 million will be provided by the Government of Tajikistan. According to the Finance Ministry, the authorities expect the project to expand educational infrastructure and improve the quality of general education as the number of schoolchildren grows. The program includes the construction of new facilities and the provision of equipment for schools in a number of cities and districts across the country. In recent years, Tajikistan has sought international concessional financing for social infrastructure, including education and healthcare. It has also drawn financing for public utilities.

Industrialization

Tajikistan Targets Industrial Growth as Share of GDP to Reach 30% by 2030

Tajikistan aims to increase industry’s share of gross domestic product to 30% by 2030 as part of its accelerated industrialization strategy, the State Committee on Investments and State Property Management said. The committee said the country has a strong raw materials base to support industrial development. According to the agency, Tajikistan has 10 of the 12 critical minerals most in demand for projects linked to the global green transition. More than 800 mineral and precious metal deposits have also been identified across the country, it said. The European Bank for Reconstruction and Development has also described Tajikistan as having more than 600 documented deposits of around 50 minerals, including silver, gold, lead, and zinc. The bank has said the country holds some of the largest antimony reserves in the region, though limited private investment has slowed development of the sector. Authorities say the focus is shifting beyond raw material extraction toward processing industries. Priority sectors include textiles, agricultural processing, construction materials, machine building, chemicals, and electrical equipment manufacturing. According to the committee, the strategy is designed to create investment opportunities across the full production cycle, from resource extraction to finished goods aimed at regional and international markets.

Aviation

Turkish Airlines to Fly Daily to Dushanbe

Turkish Airlines will increase flights between Istanbul and Dushanbe from five to seven days a week, according to Turkey’s ambassador in Tajikistan. “Starting on August 3, daily Dushanbe–Istanbul flights will be available, further strengthening connectivity between Turkey and Tajikistan,” Ambassador Umut Acar said on Facebook. The development comes amid signs of domestic growth in commercial aviation in Tajikistan, whose national carrier, Somon Air, said last month that it was expecting the delivery of new Boeing 737 MAX 8 aircraft in the next few months. In April, Shohin Airlines, a new private airline registered in Tajikistan, said it was in the final stage of acquiring four planes from the Airbus A320neo line of aircraft. In 2025, civil aviation authorities in Tajikistan lifted many market restrictions under a new government policy. The move was aimed at encouraging competition, leading to better prices for passengers, more efficient service, and route diversification.

Economic Growth

EBRD Names Tajikistan One of Central Asia’s Fastest-Growing Economies

Tajikistan continues to record one of the strongest economic growth rates in Central Asia, according to the European Bank for Reconstruction and Development (EBRD) in its June 2026 Regional Economic Prospects report. The EBRD estimates that Tajikistan’s economy grew by 8% year-on-year in the first quarter of 2026, supported by growth in trade, transport and communications, along with strong manufacturing growth and higher electricity generation. Fixed capital investment rose by 34.2% in the first quarter compared with the same period last year, one of the strongest performances in the region. For comparison, fixed capital investment in neighboring Kyrgyzstan rose by 25.5% during the same period, while Kazakhstan recorded growth of 6.4%. The bank attributed Tajikistan’s strong investment activity partly to public spending commitments, including the Rogun hydropower project, one of the country’s flagship infrastructure developments. Once completed, Rogun is expected to become a key part of Tajikistan’s power system and a major source of electricity exports to neighboring countries. The EBRD also noted strong growth in manufacturing, which increased by 29.6% year-on-year in January-March 2026. Electricity generation rose by 7.5%, while mining output contracted by 9.8%. Officials at Tajikistan’s State Committee on Investment and State Property Management said the figures reflect sustained interest in the country’s economy and create additional opportunities to attract domestic and foreign investors into priority sectors. Tajikistan has increasingly positioned itself as a regional energy hub, particularly through hydropower. As previously reported by The Times of Central Asia, the country has the largest hydropower potential in Central Asia. Tajikistan’s annual hydropower potential is estimated at 527 billion kilowatt-hours, while the country accounts for a large share of Central Asia’s water resources. Despite that, much of its hydropower capacity remains untapped. International industry estimates suggest that only around 4% of Tajikistan’s hydropower potential has been developed, leaving significant room for future investment and expansion.

Renewable Energy

Central Asia’s Renewable Energy Boom Faces Growing Grid Challenges

Central Asia is rapidly expanding its renewable energy sector, with solar power emerging as one of the key drivers of the region’s energy transition. However, a new report by the Eurasian Development Bank (EDB) warns that accelerated deployment of renewable energy, without matching investment in grid infrastructure, reserve capacity, storage systems, and market reforms, could increase systemic risks and raise overall electricity costs. The warning comes as electricity demand across Central Asia continues to grow steadily. The region’s population now exceeds 80 million, and power consumption is rising by 3% to 6% annually. According to the EDB, electricity demand could increase by nearly 40% by 2030, reaching 370 billion kilowatt-hours annually, up from approximately 270 billion kilowatt-hours today. Governments across the region have announced ambitious renewable energy targets for the coming decade. Uzbekistan plans to install more than 25 gigawatts of renewable energy capacity by 2030, including solar and wind generation. Kazakhstan aims to commission 8.4 gigawatts of renewable energy by 2035, while Kyrgyzstan plans to add 3.65 gigawatts of solar capacity and 400 megawatts of wind power over the same period. Tajikistan is targeting 2 gigawatts of solar and wind generation by 2030, while Turkmenistan has announced plans for 300 megawatts of solar power capacity. Yet the region’s transition toward cleaner energy sources presents a growing challenge: electricity demand is increasing faster than power systems are adapting to accommodate large volumes of variable renewable generation. Solar energy production peaks during daylight hours, creating fluctuations that conventional power systems must manage. In the morning, before solar panels begin generating at full capacity, electricity demand is largely met by hydropower plants and thermal generation fueled by coal or natural gas. As solar output rises during the day, conventional plants must reduce generation or temporarily shut down. After sunset, when electricity consumption remains high but solar production falls to zero, conventional generators must rapidly increase output to stabilize the system. These abrupt shifts create operational challenges and increase costs for grid operators. According to the EDB’s report, Power Sector of Central Asia: Modernization and Energy Transition, the main obstacles to integrating renewable energy are technical and institutional, not simply financial. If sudden drops in solar or wind generation caused by weather changes are not immediately offset, power systems risk instability and, in extreme cases, blackouts. As renewable capacity expands, grids require more flexible generation, larger reserve margins, energy storage systems, and more sophisticated operational management tools. The report notes that renewable generation is being introduced faster than supporting infrastructure can be developed. In many countries, transmission networks were not designed to accommodate a high share of variable energy sources. Weather forecasting systems also remain insufficiently accurate to support reliable real-time balancing of renewable output. Market reforms have lagged as well. Capacity markets, reserve markets, and tariff systems in several Central Asian countries have yet to evolve in ways that encourage investment in flexible backup generation and storage technologies. As a result, the report argues, the real system-wide cost of renewable energy may...