Asian Development Bank - The Times Of Central Asia

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Economic Growth

ADB Forecasts Steady Economic Growth for Tajikistan Through 2026

The Asian Development Bank (ADB) projects that Tajikistan will sustain strong economic growth over the next two years, according to the bank’s Asian Development Outlook 2025 released in April. Robust Growth Ahead Tajikistan’s gross domestic product is forecast to grow by 7.4% in 2025 and 6.8% in 2026. This growth is expected to be fueled by significant investments in the energy and industrial sectors, solid domestic demand, and an increasingly dynamic private sector. While these figures mark a slight decline from the impressive 8.4% GDP growth recorded in 2024, one of the highest in the region, the ADB highlights the need for deeper structural reforms. In particular, digital transformation and the expansion of e-governance are deemed critical to ensuring long-term, sustainable development. Digital Transformation: Opportunities and Hurdles ADB’s Resident Representative in Tajikistan, Ko Sakamoto, emphasized the strategic importance of digitalization. “We welcome the government’s prioritization of digital transformation as a key driver of development. We stand ready to support efforts to overcome persistent barriers, including a lack of investment,” he said. Despite widespread mobile phone usage, Tajikistan ranks 139th globally in mobile internet speed. However, digital engagement is on the rise: in the first half of 2024, the number of registered digital wallets hit 10.4 million, and non-cash transactions rose 16.2% year-on-year. ADB experts recommend that Tajikistan focus on developing a robust digital infrastructure to broaden access to public services. The widespread integration of digital technologies in governance and business is seen as vital to industrial modernization and improving overall quality of life. Inflation, meanwhile, is projected at 5.0% in 2025 and 5.8% in 2026. Key inflationary pressures include rising consumer lending, salary increases for public sector employees, and higher utility tariffs. Continued Partnership and Support The Asian Development Bank, a major multilateral financial institution supporting sustainable and inclusive development across Asia and the Pacific, has been working with Tajikistan since 1998. Over that time, the country has received more than $2.7 billion in assistance, including $2.2 billion in grants. These funds have supported vital infrastructure projects in transportation and energy, as well as climate resilience and social development programs. Established in 1966, ADB has 69 member countries, 49 of which are from the region. The bank continues to be one of Tajikistan’s principal development partners, offering innovative financing tools and strategic cooperation to enhance economic sustainability and improve livelihoods.

Renewable energy

Azerbaijan, Kazakhstan, and Uzbekistan Partner on Caspian Green Energy Corridor

Azerbaijan, Kazakhstan, and Uzbekistan have signed a landmark agreement with the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) to advance a regional renewable energy initiative known as the Caspian Green Energy Corridor. The Memorandum of Understanding (MoU), signed on April 5 in Baku, outlines plans for a feasibility study to assess the project's potential. The primary objective is to establish a robust legal and institutional framework that will facilitate cross-border electricity trade among the three countries, particularly from renewable sources. The Caspian Green Energy Corridor is part of ADB’s broader regional strategy to promote clean energy and enhance multilateral cooperation. The initiative aims to interconnect the energy systems of Azerbaijan, Kazakhstan, and Uzbekistan, enabling them to share and distribute renewable electricity more efficiently. “This agreement lays the foundation for deeper cooperation and shows our shared commitment to building a clean energy future,” said Yevgeniy Zhukov, ADB Director General for Central and West Asia. A key ambition of the project is to develop a green energy supply route from the Caspian region to Europe via the Black Sea Cable. The corridor is expected to improve energy security, reduce carbon emissions, and support economic development across the region. The initiative is also backed by the Central Asia Regional Economic Cooperation (CAREC) Program, which brings together 11 countries and several development partners to promote regional integration and reduce poverty through economic collaboration.

Hydropower

ADB Considers $500 Million Support for Tajikistan’s Rogun Hydropower Plant

The Asian Development Bank (ADB) will continue supporting Tajikistan’s Rogun Hydropower Plant (HPP) project in 2025, the bank’s new country manager, Ko Sakamoto, announced on February 25. Speaking to reporters, Sakamoto emphasized that Rogun HPP is a top priority for the Tajik government, highlighting its significance for Tajikistan’s energy independence, regional stability and climate change mitigation. The ADB has been invited to join a consortium of financial institutions financing the project. Tajikistan has requested $500 million in assistance, and the bank is currently reviewing the proposal. “ADB will continue to support the project and share updates as negotiations progress,” Sakamoto said. In 2024, ADB provided $220 million in assistance to Tajikistan, funding six projects across agriculture, energy, health, public administration and transport. ADB plans to approve four new projects in 2025, including an initiative on digital agriculture aimed at boosting food security. The bank is developing a five-year strategy that will align with Tajikistan’s long-term development goals. It will support glacier protection efforts, as Tajikistan leads regional climate initiatives. An international glacier conservation conference is scheduled for May in Dushanbe. As Tajikistan works toward greater energy security, Rogun remains central to its economic and environmental strategy. ADB’s continued involvement signals strong international backing for the project, which has the potential to transform Tajikistan into a key regional energy exporter. If approved, the $500 million in funding would mark a significant step toward completing one of Central Asia’s most ambitious hydropower projects.

Water Management

ADB to Help Uzbekistan Introduce Smart Water Management

The Asian Development Bank (ADB) has approved a $125 million loan to support Uzbekistan’s government in modernizing water management, improving water security, and expanding access to safe and reliable water. Advancing Smart Water Management ADB’s Climate-Smart Water Management Improvement Project will assist Joint Stock Company Uzsuvtaminot, the country’s national water utility, and its regional branches in enhancing water infrastructure and efficiency. Key initiatives include: Completing the nationwide installation of bulk flow metering and telemetry systems at major water sources. Conducting a comprehensive asset inventory and geographic mapping of all water supply and wastewater infrastructure, covering approximately 4 million customer connections. Implementing climate-smart, IT-based utility management systems, including training programs for national water utility staff. Upgrading customer service centers with new financial management software, ensuring transparent financial statements aligned with international standards. Addressing Water Security Challenges ADB Country Director for Uzbekistan Kanokpan Lao-Araya emphasized the urgency of improving water management in the face of climate change and inefficient usage. “Uzbekistan’s water resources are under acute threat from climate change and inefficient usage. ADB’s project introduces smart water management systems to improve water usage, reduce energy consumption, and increase operational efficiency to lower Uzbekistan’s carbon footprint,” she stated. ADB’s Ongoing Support for Uzbekistan Since Uzbekistan joined ADB in 1995, the bank has committed $14.3 billion in public sector loans, grants, and technical assistance to support the country’s development.

Finance

ADB To Provide Uzbekistan With $300 Million To Support Microfinance

The Asian Development Bank (ADB) will provide the government of Uzbekistan with $300 million to support unbanked or underbanked micro-enterprises. The funds will aim to improve access to finance for micro and small businesses, primarily focusing on supporting women entrepreneurs, which ADB Director General for Central and West Asia, Eugene Zhukov, says will be an essential step towards the country's economic development and job creation. Kanokpan Lao-Araya, Director of ADB's Resident Mission in Uzbekistan, said the loan will help improve the quality of life of entrepreneurs and provide them with new financial opportunities. State-owned commercial banks primarily control Uzbekistan's financial sector, and microfinance organizations occupy only 0.5% of the system. According to Global Findex data for 2021, only 44% of Uzbekistan's adult population has accounts with formal financial institutions, well below the Central Asian average of 58%. The lack of commercial microfinance has led to a severe credit gap, especially among small businesses. Support from the ADB aims to close this gap and develop an inclusive financial system to contribute to the country's sustainable economic growth. The Asian Development Bank was founded in 1966 and has 68 member countries. Uzbekistan joined the ADB in 1995, since which time the bank has provided the country with loans, grants, and technical assistance worth $12.5 billion.

ADB

ADB to Finance Upgrade of Barskoon–Karakol Section of Issyk-Kul Ring Road in Kyrgyzstan

The Asian Development Bank (ADB) announced on September 19 that it had approved $109.5 million in financing to renovate the highway around Lake Issyk-Kul. The lake is one of the most popular tourist destinations in Kyrgyzstan, and a strategic location that connects to neighboring Central Asian countries. ADB’s Issyk-Kul Ring Road Improvement Project will construct 75.2 kilometers of the road traversing the Barskoon to Karakol section of the Issyk-Kul Ring Road, which connects the Central Asia Regional Economic Cooperation (CAREC) Corridor 1. The project will widen the two-lane roadway to four lanes to meet increasing traffic demand, while incorporating climate-adaptation measures into the road design and construction materials. Rest areas, bus stops, streetlights, and safer access for pedestrians will also be constructed. The ADB funding comprises an $87 million concessional loan and a $22.5 million grant from the Asian Development Fund. ADB Principal Transport Specialist Oyunchimeg Erdene commented: “The Barskoon–Karakol road section [on the southern shore of Lake Issyk-Kul] is the remaining portion of the Issyk-Kul Ring Road for improvement. Completing this will mean eliminating congestion and boosting tourism that will support the growth of businesses in the area.” Kyrgyzstan’s Deputy Minister of Transport, Beknazar Bazaraliev, earlier said that the rehabilitation of the Issyk-Kul Ring Road is to be completed in 2028. The rehabilitation of the 440 km long Issyk-Kul Ring Road was divided into several parts and is financed by the government and international financial organizations.