Turkmenistan Business & Economy - The Times Of Central Asia

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Asian Development Bank

ADB Supports Turkmenistan’s Power Grid Modernization with $500 Million Project

The Asian Development Bank (ADB) has been working with Turkmenistan since 2018 to modernize the country’s electricity infrastructure, marking a milestone in cooperation, Business Turkmenistan reported on January 12. At the core of this partnership is the $500 million National Power Grid Development Strategy, the first initiative by an international financial institution in Turkmenistan’s energy sector. According to the ADB, the project aims to enhance the reliability of the national power network and bolster the country’s electricity export capacity. The project has financed the construction of approximately 1,400 kilometers of power transmission lines at 110, 220, and 500 kilovolts. In addition, 11 substations have been built across the regions of Akhal, Balkan, Dashoguz, and Lebap, as well as in Ashgabat. Technical assistance valued at $1.5 million was also provided through a grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific. The ADB reported that the project is already yielding measurable results. Electricity exports rose from 3.4 terawatt-hours in 2017 to 9.3 terawatt-hours in 2023, driven by increased transmission capacity and system stability. The State Electric Power Corporation Turkmenenergo, the ADB’s local partner, contributed $175 million to the project’s implementation. The ADB described its role as supporting sustainable economic growth and development across Asia and the Pacific through the provision of loans, grants, and technical assistance. Cooperation between the ADB and Turkmenistan has also expanded into other sectors. In September 2025, the ADB approved a $75 million loan and a $2 million grant from the Japan Fund to strengthen Turkmenistan’s nursing and midwifery workforce. The initiative marked the ADB’s first health sector project in the country.

Organization of Turkic States (OTS)

Kazakhstan Boosts Trade with Turkic States on Back of Rising Exports

Kazakhstan has significantly increased mutual trade volumes with member states of the Organization of Turkic States (OTS), primarily driven by a surge in exports. According to data from the first ten months of 2025, trade turnover with OTS countries rose by nearly 11%, Deputy Minister of National Economy Asan Darbaev announced at the Third General Assembly of the Union of Turkic Chambers of Commerce and Industry (TCCI) in Astana. The OTS includes Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan, Turkey, and Uzbekistan as full members. Hungary and Northern Cyprus hold observer status and contribute to deepening economic, cultural, and political cooperation across the Turkic world. “At the end of ten months of 2025, the volume of mutual trade between Kazakhstan and OTS countries reached approximately $10.4 billion, which is almost 11% higher than the same period last year,” Darbaev stated. He noted that this growth was largely due to a 16.6% increase in Kazakhstani exports to OTS member states, which totaled $7.6 billion. Imports from these countries to Kazakhstan amounted to $2.8 billion. The export surge was driven by increased shipments of copper and copper cathodes, crude oil, wheat, petroleum products, sunflower oil, and a range of metallurgical and agro-industrial goods. According to Darbaev, this indicates not only the continued strength of Kazakhstan’s raw materials sector but also the gradual diversification of exports with higher value-added products. Turkey, Uzbekistan, Kyrgyzstan, and Azerbaijan remain Kazakhstan’s principal trading partners within the OTS. Turkey leads with a trade turnover of $4.36 billion, followed by Uzbekistan at $3.88 billion. Trade with Kyrgyzstan reached $1.78 billion, while trade with Azerbaijan stood at approximately $390 million. During the assembly, Kazakhstan assumed the rotating chairmanship of the TCCI for the first time since the Union's establishment in 2019. The organization includes chambers of commerce and industry from Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, Turkmenistan, and Hungary. It serves as a key platform for advancing trade, industrial cooperation, investment, and technology exchange among member and observer states. Raimbek Batalov, chairman of the presidium of Kazakhstan’s National Chamber of Entrepreneurs “Atameken,” was appointed head of the TCCI for a one-year term. “The Turkic economic space today possesses all the prerequisites for a qualitative leap forward, scale, resources, an institutional foundation, and political will. Our shared goal is to convert this potential into sustainable production, investment, job creation, and improved living standards,” Batalov said. Delegates at the assembly identified priority areas for future cooperation, including the development of joint industrial projects, operationalization of the Turkic Investment Fund, reduction of trade and technical barriers, and enhanced transport and logistics connectivity. Previously, The Times of Central Asia reported that energy ministers from OTS countries had discussed key joint initiatives in December 2025 as part of ongoing regional collaboration.

Cryptocurrency

Turkmenistan Opens Door to Crypto Mining, Keeps Firm Grip on Exchanges

Turkmenistan has taken a rare step toward opening a tightly controlled economy by legalizing cryptocurrency mining and the operation of crypto exchanges under a new “Law on Virtual Assets”. First reported by The Times of Central Asia in early December 2025, the law came into effect on January 1, 2026, creating a state-run licensing system overseen by the Central Bank of Turkmenistan, while keeping strict limits on how crypto can be used inside the country. The legal change, signed by President Serdar Berdimuhamedov, brings “virtual assets” under civil law, meaning that crypto is treated as property, rather than money. Under the framework, cryptocurrencies are not recognized as legal tender and cannot be treated as a currency or security for domestic payments. As previously reported by The Times of Central Asia, the law covers the creation, storage, issuance, and circulation of virtual assets. It also states that the government is not responsible for losses incurred through crypto platforms or for drops in asset value. Mining rights are available to individual entrepreneurs and legal entities that register electronically with the central bank, and the law explicitly bans “hidden mining” that uses someone else’s computing resources without permission. For exchanges and related service providers, the licensing requirements are central. Licensed firms can offer exchange, transfer, storage, and management services, and conduct initial offerings, but they must follow customer identification rules aligned with anti-money-laundering controls. The law also places strict limits on who can operate crypto exchanges inside Turkmenistan. Individuals and legal entities registered in offshore jurisdictions are barred from establishing exchanges, and founders with offshore bank accounts are disqualified from obtaining licenses, reinforcing a framework designed to keep ownership and control within a tightly regulated domestic system. Advertising restrictions further underscore the government’s cautious approach. Crypto service providers are prohibited from making promises of profitability or offering inducements to attract customers. Promotional materials must include explicit warnings that virtual assets are not state-backed and may lose value, reflecting official concerns over speculation and consumer risk. The shift is widely seen as significant for one of the world’s most closed economies, though structural constraints remain. Turkmenistan’s heavily regulated internet environment poses a challenge for both trading platforms and large-scale exchange operations, particularly those requiring uninterrupted access to global networks. The move also fits within a broader effort to reduce reliance on gas exports by cautiously diversifying the economy. The commercial question now is whether legal clarity and access to low-cost electricity can outweigh these limitations. The model combines ultra-cheap energy with a license-driven regulatory system, a structure that may attract some miners while deterring firms that depend on flexible compliance regimes or unrestricted connectivity. Across Central Asia, governments have taken divergent approaches to regulating digital assets. Kazakhstan has experimented with special regulatory zones and later expanded oversight nationwide. Turkmenistan’s approach is more centralized, creating a narrow legal pathway that keeps regulatory authority concentrated with the state and the central bank. The government has signaled incremental openness in other areas, including the introduction of electronic...

Railways

Opinion: Prospects for Central Asia’s Access to Persian Gulf Infrastructure

The agreement signed on December 8, 2025, between Saudi Arabia and Qatar to construct a high-speed railway linking Riyadh and Doha marks a pivotal development in transport connectivity across the Persian Gulf. Beyond its bilateral implications, the project could have broader consequences for transregional logistics, particularly for Central Asia and Kazakhstan. The 785-km railway will pass through key cities in Saudi Arabia’s Eastern Province, including Dammam and Al-Hufuf, and will connect King Salman and Hamad International Airports. Trains are expected to reach speeds exceeding 300 km/h, reducing travel time between the two capitals to approximately two hours. The six-year project is projected by officials to boost the combined GDP of both countries by around $30 billion and create up to 30,000 jobs. The Gulf Railway and New Regional Connectivity The Riyadh-Doha line is a central element of the Gulf Railway initiative, which is seeking to establish a unified railway network among Gulf Cooperation Council (GCC) member states, Saudi Arabia, Qatar, the UAE, Bahrain, Kuwait, and Oman, with a target date of around 2030. Originally envisioned primarily as a freight system, the Gulf Railway is increasingly incorporating high-speed passenger services alongside freight, reflecting the region’s push for greater internal integration and reduced dependence on air travel. The Riyadh-Doha segment forms a vital axis between the Gulf’s political and financial hubs and is expected to link with Saudi, Emirati, and Omani infrastructure, laying the groundwork for a more integrated regional transport system. Beyond the Peninsula While the Gulf Railway’s scope is geographically confined to the Arabian Peninsula, meaningful integration with Eurasia would require additional connectivity, particularly via land and multimodal routes through Iran, Turkey, and the Caspian region. Among these, the overland corridor through Iran is especially significant, though constrained by sanctions, financing risks, and political uncertainty. Kazakhstan-Turkmenistan-Iran Corridor Unlike many conceptual infrastructure proposals, the Kazakhstan-Turkmenistan-Iran railway, operational since 2014, is already a functioning freight corridor. It provides Central Asian nations with direct access to Persian Gulf ports and Middle Eastern markets. For Kazakhstan, the route offers strategic diversification away from traditional corridors. While no formal plans exist to link GCC rail infrastructure directly with Central Asia, the emergence of high-capacity Gulf rail corridors reshapes the long-term connectivity landscape. A future interface could allow Astana overland access to Gulf markets, while enabling reciprocal flows from the Gulf into Central Asia, China, and Europe. President Kassym-Jomart Tokayev has previously described Iran as a “gateway” to Southeast Asia and Africa. Kazakhstan has also outlined plans to establish its own logistics terminal in the Iranian port of Shahid Rajai in Bandar Abbas, further enhancing its position in Gulf-Eurasia trade flows. Iran’s Evolving Role Historically, Iran’s role as a transit state has been hampered by international sanctions and regional tensions. However, the 2023 normalization of relations between Saudi Arabia and Iran, brokered by China, has altered the regional calculus. Although still fragile, this diplomatic thaw improves prospects for long-term infrastructure projects involving Iran as a critical transit link between the Persian Gulf and Eurasia. Alternatives and Their...

Tokyo Declaration

Japan and Central Asia Enter a New Era of Strategic Partnership

On December 20, the first summit of Central Asian and Japanese leaders (CA+JAD) was held in Tokyo. The Tokyo Declaration, an ambitious roadmap for future cooperation, was adopted during the summit. It aims to transform relations between Japan and the five Central Asian countries into a deep and multifaceted strategic partnership. New Paths for the Region Japan intends to invest about $20 billion in business projects across Central Asia over the next five years. Priority areas for cooperation include environmental initiatives, and the transition to carbon neutrality in the energy sector. Additional areas include developing supply chains for key minerals, disaster risk reduction, and earthquake preparedness. Projects in agriculture and logistics, particularly improvements along the Trans-Caspian International Transport Route, were also discussed. Other topics covered included launching direct flights between Japan and Central Asia, advancing cooperation in digital technologies and artificial intelligence, and expanding scholarships and training programs. Attendees included Japanese Prime Minister Sanae Takaichi; Kazakh President Kassym-Jomart Tokayev; Kyrgyz President Sadyr Japarov; Tajik President Emomali Rahmon; Turkmen President Serdar Berdimuhamedov; and Uzbek President Shavkat Mirziyoyev. The second Central Asia-Japan summit is scheduled to take place in Kazakhstan, in line with the agreed English alphabetical rotation. Turkmenistan: Petrochemical Cooperation President Serdar Berdymuhamedov met with representatives of major Japanese corporations, including Sumitomo, Toyo Engineering, Muroosystems, Itochu, Argonavt, Mitsubishi, Kawasaki Heavy Industries, and Tokyo Boeki Eurasia. He cited several successful Japanese-led projects in Turkmenistan, such as waste processing plants, a wastewater treatment initiative for industrial reuse, PET plastic recycling, and e-waste processing to reduce hazardous materials. New memorandums were signed between Turkmen and Japanese entities. Key among them: an agreement involving the state-owned concern Turkmenhimiya, Mitsubishi Heavy Industries, Mitsubishi Corporation, and Gap Inşaat on building a urea plant in the Balkan region with a capacity of 1.155 million tons per year. Turkmenhimiya also signed an agreement with Kawasaki Heavy Industries to extend maintenance for the Akhal gas-to-gasoline plant. In addition, a cooperation deal was reached with Toyo Engineering and Turkey’s Rönesans Endüstri for the second phase of the Kiyanly polymer plant. Other memoranda included partnerships between the Ministry of Automobile Transport of Turkmenistan and Sumitomo Corporation, TurkmenGas and Sumitomo Europe, and the Ministry of Communications and Mitsubishi Corporation Machinery, focusing on artificial intelligence and digital technologies. Agreements were also signed with media outlets, banks, and universities. Diplomatic ties between Japan and Turkmenistan were established in 1992. The Japanese Embassy opened in Ashgabat in 2005, and the Turkmen Embassy in Tokyo followed in 2013. Japan also plays a vital role in Turkmenistan’s export of polypropylene. Japanese firms Kawasaki and Sojits helped construct a fertilizer complex in the town of Mary, while Itochu and Day Nippon were involved in modernizing the national railway’s IT systems. Kyrgyzstan: Energy and Education Ties President Sadyr Japarov oversaw the signing of bilateral agreements spanning exports, energy, healthcare, education, tourism, agribusiness, and digital development. Agreements included a roadmap between Kyrgyzstan’s Ministry of Energy and MurooSystems for a small hydropower plant on the Chon-Kemin River and various education-related memorandums with...

Cotton

Turkmenistan Considers Cotton Exports to Kyrgyzstan

Turkmenistan is exploring the possibility of exporting cotton to Kyrgyzstan as part of a broader effort to jointly develop the textile industry, according to Danil Ibrayev, a member of the presidium of the Eurasian Economic Union (EAEU) Business Council and President of the Kyrgyz Union of Industrialists and Entrepreneurs. He shared the update during an interview with Birinchi Radio. Ibrayev noted that both countries are currently discussing practical mechanisms for supplying Turkmen cotton to Kyrgyz enterprises, where it would be processed into finished textile products. These products could then be sold domestically or exported, including to other EAEU member states. “Turkmenistan produces large volumes of cotton. We are now discussing how to organize its delivery to Kyrgyzstan and develop textile production here,” Ibrayev said. The initiative aligns with Kyrgyzstan’s strategy to revitalize its light industry by securing stable sources of raw materials. Turkmenistan, meanwhile, is seeking to diversify export routes for its agricultural commodities, with cotton remaining a vital component of its economy. Experts cited by local media suggest that such cooperation could deepen industrial integration within Central Asia and reduce dependence on textile imports from outside the region. With growing demand for locally produced goods and the expansion of import substitution policies, regional partnerships are gaining strategic significance. Last year, Kyrgyz officials emphasized the government's commitment to expanding domestic textile production and actively sourcing raw materials from neighboring states. Cotton processing was identified as one of the quickest pathways to job creation and increased exports through value-added manufacturing.