Asian Development Bank - The Times Of Central Asia

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Economic Growth

Central Asia Growth Forecasts Remain Strong in Latest ADB Outlook

Four of Central Asia’s five economies are expected to grow faster in 2026 than developing Asia and the Pacific as a whole, according to the Asian Development Bank’s September Asian Development Outlook. ADB forecasts growth of 5% across developing Asia and the Pacific this year, compared with 8.9% in Kyrgyzstan, 7% in Uzbekistan and Tajikistan, and 6.3% in Turkmenistan. Kazakhstan is the exception, with growth forecast at 4.8%. Kyrgyzstan is growing faster than its neighbors but is also facing the highest inflation among the five countries. ADB forecasts inflation at 11.2% this year and 8.5% next year. Growth continues to be supported by domestic demand and sustained investment, while ADB says import dependence and electricity-generation shortfalls are contributing to inflationary pressures. For Uzbekistan, ADB forecasts gross domestic product growth of 7% and inflation of 6.7% in 2026. In 2027, the figures are expected to be 6.8% and 5%, respectively. Stronger-than-expected economic activity prompted ADB to upgrade Uzbekistan’s 2026 growth forecast in its September outlook. Tajikistan is also forecast to grow by 7% in 2026, with inflation at 4.5%. Growth is expected to slow to 6.8% in 2027, while inflation is forecast to edge up to 4.7%. ADB lowered its 2026 growth projection in September, saying the escalation of Russia’s war in Ukraine had disrupted fuel imports and constrained near-term economic activity. Kazakhstan, the region’s largest economy, is growing more slowly than its neighbors. ADB expects growth of 4.8% this year and 4.5% next year, with inflation forecast at 10.4% and 9.5%, respectively. The bank left its growth and inflation forecasts unchanged from its previous outlook, with inflation expected to ease only gradually. For Turkmenistan, ADB forecasts growth of 6.3% in 2026 and 6.2% in 2027, with inflation at 6% in both years. The country’s economic indicators remain more difficult to compare with those of its neighbors because of limited access to reliable and detailed economic data. Its economy also remains heavily dependent on natural gas exports, with China its main gas market. Central Asia’s growth figures look strong against the Asian backdrop, but ADB is warning of energy and climate risks across developing Asia and the Pacific. Prolonged disruption to global energy markets could keep oil and gas prices elevated and volatile. For energy importers, that means higher fuel costs and additional inflationary pressure, while hydrocarbon exporters may benefit from higher prices but remain vulnerable to disruption in production and export routes. Another risk is a very strong El Niño, which ADB expects to persist through the first quarter of 2027. Extreme weather could reduce agricultural production and push up food prices, while a decline in hydropower generation could increase demand for other energy sources. For Kyrgyzstan and Tajikistan, where hydropower supplies most electricity, weather and water availability add another layer of vulnerability. The differences between forecasts for the region remain substantial. In August, The Times of Central Asia compared projections from international financial institutions. The Eurasian Development Bank (EDB) forecast 2026 growth of 10.2% for Kyrgyzstan, 8.3% for Tajikistan,...

Water Management

Tajikistan and ADB Discuss Modernization of Tajik Sea Reservoir

Tajikistan is planning a major modernization of the Tajik Sea reservoir, known until 2016 as the Kayrakkum Reservoir. The project is a strategic water initiative for the country and the wider Central Asian region. Prospects for the project were discussed during a meeting between Tajikistan’s officials and representatives of the Asian Development Bank (ADB) in Ulaanbaatar, according to the Tajik state news agency Khovar. According to Tajikistan’s Ministry of Energy and Water Resources, the talks involved Presidential Economic Adviser Ne’matullo Hikmatullozoda, Energy and Water Resources Minister Daler Juma, ADB Director General for Central and West Asia Leah Gutierrez, and Regional Head of Regional Cooperation and Integration Asad Aleem. The meeting focused on the “Efficient Management of Water Resources of the Bahri Tojik Reservoir” project. Hikmatullozoda described the initiative as one of Tajikistan’s key infrastructure priorities, aimed at adapting to climate change and addressing transboundary water challenges. The work would reinforce the reservoir’s protective dams to reduce flood risks and modernize its pumping stations. It also covers upgrades to irrigation, drainage, and collector systems, along with a digital monitoring system used to control and track water infrastructure. Officials said the project is expected to improve water resource management under changing climate conditions. It is also intended to make irrigation supplies more reliable and expand hydropower generation capacity. A preliminary feasibility study has already been prepared with ADB support. The Tajik Sea is located in Tajikistan’s Sughd Region on the Syr Darya River. The reservoir was created following the construction of a dam and hydropower station to regulate the river’s flow, with filling beginning in the 1950s. Today, the Tajik Sea remains one of the country’s largest reservoirs and an important site for energy production and irrigation. The adjacent Kayrakkum Hydropower Plant generates electricity, while the reservoir supplies water for agriculture across the region.

Asian Development Bank

ADB Annual Meeting in Samarkand Unveils Major Energy, Climate, and Development Initiatives

The Asian Development Bank’s (ADB) 59th Annual Meeting concluded in the historic Uzbek city of Samarkand after four days of discussions focused on energy connectivity, climate financing, and economic resilience across Asia and the Pacific. Held from May 3 to 6, the gathering brought together government officials, development institutions, economists, and private sector representatives at a time of growing geopolitical and economic uncertainty. It marked the second time Uzbekistan has hosted the ADB Annual Meeting, following the 43rd edition in Tashkent in 2010. A central announcement at the meeting was the unveiling of a broader $70 billion regional infrastructure program aimed at accelerating energy and digital connectivity across Asia and the Pacific. The initiative is structured around two major pillars: a $50 billion Pan-Asia Power Grid Initiative focused on cross-border electricity systems, and a $20 billion digital connectivity component aimed at strengthening broadband and data infrastructure across the region. Together, these programmes are intended to reduce energy costs, improve reliability, and deepen regional economic integration. The Pan-Asia Power Grid Initiative (PAGI) In his address to delegates, ADB President Masato Kanda noted that PAGI seeks to support more interconnected and resilient infrastructure systems. "To survive and thrive in this new era, we must build deeply connected and resilient systems," he said, adding that stronger regional grids and digital networks can help countries manage rising energy demand whilst also accelerating the transition to cleaner power sources. The initiative seeks to integrate around 20 gigawatts of renewable energy capacity and the develop enough transmission infrastructure to expand electricity access for up to 200 million people. ADB officials said the bank would use its role as a regional convener to bring together governments, regulators, and private investors to overcome barriers that often slow regional infrastructure projects. The bank pointed to earlier success stories, including the Bangladesh-India power grid interconnection and the Monsoon Wind Power Project in Laos, as examples of cross-border cooperation supported through blended finance mechanisms. [caption id="attachment_37211" align="aligncenter" width="1536"] Image: TCA, Stephen M. Bland[/caption] Climate and Food Security Concerns Climate and environmental financing also featured prominently during the Samarkand meetings. On May 5, the ADB announced that the German government had joined the bank’s Nature Solutions Finance Hub with €5.5 million ($6.5 million) in grant co-financing, some of which has been earmarked for sorely needed watershed rehabilitation in Uzbekistan. The discussions also reflected growing concern over global food security and supply chain vulnerabilities linked to the ongoing war in Iran. Qingfeng Zhang, Senior Director of ADB’s Agriculture, Food, Nature, and Rural Development Sector Office, warned that disruptions around the Strait of Hormuz were increasing the cost of everything from energy to insurance, freight to fertilizer – placing additional pressure on food systems across Asia and the Pacific, including Central Asia. Unlike the shock caused by Russia’s invasion of Ukraine, which directly disrupted grain and fertilizer exports, Zhang said the current crisis was affecting agriculture primarily through higher operating and transportation costs. The Strait of Hormuz handles roughly one-quarter of global seaborne oil...

Tajikistan to Gain Access to Concessional ADB Loans Starting in 2027

Tajikistan will gain access to concessional loans from the Asian Development Bank (ADB) beginning in 2027, in addition to the grants it already receives, according to Lea Gutierrez, Director General of ADB’s Central and West Asia Department. Currently, Tajikistan receives support exclusively through grant mechanisms provided by the Asian Development Fund. That status is set to change next year. “Starting in 2027, Tajikistan will be classified as an IDA gap country, which means access to concessional lending,” Gutierrez said. The designation applies to countries transitioning from reliance solely on grants to eligibility for low-interest financing. The move is expected to provide Tajikistan with additional financial tools for implementing state programs and infrastructure projects. ADB officials stressed that the bank will continue seeking additional grant resources for Tajikistan, particularly through climate-related and regional financing programs. At the same time, the bank warned of mounting economic risks facing the country. ADB forecasts that inflation in Tajikistan will remain elevated, driven in part by rising utility tariffs. External pressures are also contributing to inflationary risks, including higher global commodity prices, rising logistics costs, and the effects of instability in the Middle East. According to the bank, these factors could affect both food prices and agricultural production. More broadly, ADB estimates that the economies of Central and West Asia grew by 4.6% in 2025, although inflationary pressures across the region remain significant. Among the key risks identified by analysts are rising energy costs, disruptions to trade and logistics, and persistent global uncertainty. Against this backdrop, countries in the region are being advised to maintain cautious macroeconomic policies, continue structural reforms, and support the most vulnerable segments of the population.

ADB’s 59th Annual Meeting

Uzbekistan Showcases $147 Billion Economy at 59th ADB Meeting in Samarkand

The 59th Annual Meeting of the Board of Governors of the Asian Development Bank officially opened on May 4 in Samarkand, bringing together more than 4,000 participants from over 100 countries. Held under the theme “Crossroads of Progress: Advancing the Region’s Connected Future,” the forum has given Uzbekistan a high-profile platform to promote its reforms, regional connectivity plans, and ambitions in green energy and artificial intelligence. The agenda covers digital and green transformation, climate resilience, supply chain development, and food security. The meeting also gives Central Asia a chance to present itself as a more active player in regional infrastructure, energy, and trade planning. President Shavkat Mirziyoyev addressed the forum, highlighting Uzbekistan’s recent economic reforms and development trajectory. He said the country has attracted $150 billion in foreign investment in recent years, while exports of goods and services have tripled and the economy has expanded from $50 billion to $147 billion. “Most importantly, our reforms have focused primarily on improving the daily lives of every single family and individual,” Mirziyoyev said, noting that poverty levels have declined significantly, from nearly 35% to 5.8%. He added that Uzbekistan’s economy grew by 8.7% in the first quarter despite global economic challenges. The president also emphasized the role of international financial institutions, noting that Uzbekistan’s joint project portfolio with the ADB has reached nearly $16 billion. He expressed appreciation for cooperation with organizations, including the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development. Particular attention was given to digital transformation and artificial intelligence. Uzbekistan has launched initiatives, including the creation of an AI Hub, the expansion of data centers, and training programs aimed at developing technological expertise. “The use of open AI models is also required in areas that are most essential to the population’s primary needs,” Mirziyoyev said. Green energy and transport connectivity were also central topics. Uzbekistan has already commissioned 5,600 megawatts of renewable energy capacity and aims to increase the share of renewables to 54% by 2030. The president also highlighted major infrastructure projects, including the China-Kyrgyzstan-Uzbekistan railway, which is expected to reduce cargo delivery times and strengthen regional transit links. In addition, proposals were put forward to develop a regional “Digital Customs and Logistics Alliance,” expand cooperation in critical minerals, and launch initiatives such as the “Green Belt of Central Asia” and a “Central Asia Tourist Ring.”

Asian Development Bank

ADB Issues Disaster Relief Bonds to Support Kyrgyzstan and Tajikistan

The Asian Development Bank (ADB) said on May 3 that it had issued its first Disaster Relief Bonds (DRBs), also known as catastrophe bonds, to help Kyrgyzstan and Tajikistan respond to earthquakes and floods. The bonds are part of ADB’s Risk-Layered Disaster Relief Finance Program, which seeks to reduce the financial impact of natural disasters and climate-related shocks. Both Kyrgyzstan and Tajikistan are highly vulnerable to such events but have limited fiscal capacity and risk transfer mechanisms to respond effectively. “With this inaugural sovereign catastrophe bond, our developing member countries in Central Asia gain rapid, committed financing when disaster hits, so they can build back faster. This bond will pave the way for future issuances, and over time deepen investor engagement in this dynamic region,” said ADB Vice-President for Finance and Risk Management Roberta Casali. The DRBs are designed to provide rapid liquidity following severe earthquake or flood events. Once a qualifying disaster occurs, funds will be disbursed through national social protection systems to support affected populations, particularly the most vulnerable. ADB issued separate three-year bonds worth $80 million each for the two countries. Both instruments carry a coupon composed of the compounded Secured Overnight Financing Rate (SOFR), plus a funding margin of 4 basis points and a risk margin of 600 basis points. The bonds were priced at par and are set to mature on May 30, 2029. The offerings attracted broad investor interest. For the Kyrgyzstan tranche, 64% of the bonds were placed in Europe and 36% in the Americas. By investor type, 37% went to specialized insurance-linked securities funds, 32% to insurance and reinsurance companies, and 31% to fund managers. For the Tajikistan tranche, 60% of the bonds were placed in Europe and 40% in the Americas. By investor type, 36% went to insurance-linked securities funds, 33% to insurance and reinsurance firms, and 31% to fund managers. “We are delighted by the strong response from the global investor community, whose support has further enabled the transfer of sovereign disaster risk from the public to the private sector,” said Jordan Brown, Managing Director for Asia Pacific at Aon Securities, which acted as dealer, initial purchaser, and sole bookrunner for the transaction. ADB approved the $56.4 million Risk-Layered Disaster Relief Finance Program in November 2025.