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EBRD’s Transformative Investments in Kyrgyzstan: An Interview With Hüseyin Özhan, Managing Director for Central Asia

The European Bank for Reconstruction and Development (EBRD), established in 1991, has been working in the Kyrgyz Republic since 1992 and has invested in over 250 projects amounting to over €1 billion. TCA sat down with Hüseyin Özhan to discuss the bank’s operations in Kyrgyzstan. TCA: Could you briefly introduce the EBRD and its main objectives within Kyrgyzstan? Özhan: The European Bank for Reconstruction and Development (EBRD) is owned by 73 shareholders as well as the EU and the EIB and has been operating in Kyrgyzstan for over 30 years. During this time, we have invested in more than 250 projects, surpassing €1 billion in total investments across the country. As an international financial institution, our operations in Kyrgyzstan are guided by a country strategy jointly prepared by the EBRD and local stakeholders and approved by the Bank’s Board of Directors. This year marks a significant milestone, as we have approved a new five-year country strategy outlining our priorities in Kyrgyzstan. We focus on fostering private sector growth and enhancing competition and also invest in infrastructure and sovereign-guaranteed projects. These efforts position the EBRD as one of the most influential international players in Kyrgyzstan. TCA: You mention the bank recently approved its new five-year strategy for Kyrgyzstan; could you share what this plan entails? Özhan: Our country's strategies are built on diagnostics conducted to identify transition gaps. These strategies align with the EBRD’s Strategic and Capital Framework and the Bank’s medium-term strategy and combine elements of the reform agenda and investment needs. The new strategy for Kyrgyzstan focuses on three key priorities: private sector development and competitiveness, the green economic transition with an emphasis on decarbonization and energy efficiency, and improved connectivity across the country. These priorities align closely with Kyrgyzstan’s recent reform agenda and development goals, which aim to enhance competitiveness, attract foreign investment, boost trade, and strengthen the country’s regional relevance. Decarbonization and resource efficiency are particularly critical, as Kyrgyzstan is significantly impacted by regional water scarcity. This makes sustainable water management a central focus, with numerous projects planned to support sustainable development in this sector. Additionally, developing the private sector, particularly local businesses, is vital. The EBRD works closely with the government in this regard, not only by providing funding but also through initiatives like “risk-sharing networks” and advisory programs for small businesses. These efforts help enhance productivity, relevance, and competitiveness, ensuring that Kyrgyzstan’s private sector is well-equipped to thrive in the market. TCA: How does EBRD’s mission differ from other development banks or financial institutions in the region? Özhan: Our institution has a slightly different approach to delivering our work and fostering transition in Kyrgyzstan. Unlike some other international financial institutions (IFIs) that provide budget support, the EBRD operates on a project-by-project basis and channels most of its resources to support good private-sector initiatives. A recent example of project finance is the signing of water projects in three cities in Kyrgyzstan. These sovereign lending agreements, signed with the Ministry of Finance, aim to modernize regional water...

Finance Banking Economic Cooperation International event International Finance

EDB Conference in Almaty to Focus on Sustainable Development in Central Asia

The Eurasian Development Bank (EDB) will host its annual conference, titled “Promoting Sustainable Development in Central Asia,” on December 6 in Almaty, Kazakhstan. The EDB, an international financial institution focused on fostering economic cooperation and development across Eurasia, counts Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan among its member countries. Kazakhstan alone accounts for nearly 60% of the Bank’s investment portfolio, reflecting its pivotal role in regional development efforts. The conference will focus on the EDB’s most pressing priorities for 2024, including the urgent need for sustainable and rapid economic growth to alleviate poverty in Central Asia. Discussions will address the persistent challenges of transport connectivity, which are particularly acute for the landlocked countries of the region. Additionally, the event will explore the integrated development of the water, energy, and food nexus, which the EDB views as essential for ensuring the region’s security, peace, and sustainable development. Participants will also examine trade facilitation, investment strategies, and innovative solutions for infrastructure development. These topics are considered crucial for advancing the region’s economic prospects and improving the quality of life for its citizens. The conference will host representatives from leading international organizations, including the World Bank, the Islamic Development Bank (IsDB) and its Institute, the World Food Programme, and the UN Development Programme. Other participants include the Development Bank of Kazakhstan, the UN Economic and Social Commission for Asia and the Pacific (ESCAP), and the UN Climate Technology Centre & Network (CTCN), alongside government officials and regional stakeholders. This annual event is expected to provide a platform for actionable discussions, fostering collaboration among key players and paving the way for sustainable economic development in Central Asia.

Banking Finance ADB small and medium businesses International Finance

ADB Issues First Bond Denominated in Kyrgyzstan’s Currency

The Asian Development Bank (ADB) has raised about $5 million from its first bond issued in Kyrgyzstan’s currency, the som. Arranged by Standard Chartered Bank and fully subscribed by Record Currency Management, the 3-year bond issue carries a 10.5% coupon and mitigates currency risk for an ADB project in Kyrgyzstan. The project supports micro and small enterprises (MSEs), with at least 40% of the loan channeled to women-led or owned MSEs. The project is delivered through the local Kompanion Bank, which has a strong presence in rural areas and experience supporting women entrepreneurs nationwide. ADB Assistant Treasurer Jonathan Grosvenor commented: “ADB’s maiden Kyrgyz Som bond further expands our local currency footprint and builds on our efforts to deliver foreign exchange risk mitigation solutions in all of ADB’s developing member countries.” Since Kyrgyzstan joined the ADB in 1994, the bank has committed $2.6 billion in public sector loans, grants, and technical assistance to the country.

Finance EBRD Banking Solar Energy

EBRD and EU Support Solar Power Project in Uzbekistan

The European Bank for Reconstruction and Development (EBRD) is providing funds to construct a solar power plant in Uzbekistan’s Khorezm region. The EBRD’s financial package of up to $54.6 million (€50.5 million) will be provided to Sarimay Solar, a special-purpose company fully owned by Voltalia, an international energy producer and service provider based in France. The package will consist of a senior loan of up to $44.8 million (€41.5 million) and a special facility of €9 million, which will support Sarimay Solar during construction. The project will benefit from an unfunded guarantee covering a senior loan tranche of $7 million (€6.5 million) provided by the European Union’s European Fund for Sustainable Development Plus. The financing will help Sarimay Solar construct and operate a 100 MWac (126MWdc) greenfield solar photovoltaic plant, contributing to Uzbekistan’s aim of further decreasing its reliance on carbon-intensive thermal power generation and developing up to 25 GW of solar and wind capacity by 2030. Once operational, the plant is expected to generate up to 252 GWh of electricity yearly and reduce annual CO2 emissions by more than 141,000 tons. For the fourth year in a row, Uzbekistan has been the leading recipient of EBRD funding in Central Asia. The Bank has invested around €4.9 billion in 167 projects across the country, most of which support private entrepreneurship.

Green economy Infrastructure Development International investment International Finance Corporation Finance Banking

IFC Increases Investments in Central Asia

The International Finance Corporation (IFC), a member of the World Bank Group, says it committed $1.04 billion in Central Asia in the fiscal year 2024, which started on July 1, 2023, and ended on June 30, 2024. The funds comprised over $400 million in long-term financing from IFC’s account, $600 million in mobilization, and $35 million in short-term trade and supply-chain finance to facilitate trade flows. The funds, coupled with advisory support, aimed to increase private sector participation, create jobs, boost financial inclusion, bolster infrastructure, and support the region’s green transition. Priority sectors included finance, capital markets, renewable energy, agriculture, and infrastructure. Over the last fiscal year, IFC-supported projects in the Central Asian region created about 35,000 jobs, including more than 13,000 for women. Strengthening local financial markets is among its key objectives. To that end, the IFC invested $228 million in 10 financial institutions in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, with up to half earmarked for women entrepreneurs and rural enterprises. The IFC also supported local financial institutions in growing their micro, small, and medium enterprises (MSME) businesses, advancing climate finance and digital transformation, and issuing the first-ever sustainability, social, and green bonds. The IFC and the World Bank financed a new solar plant with the country’s first battery energy storage system to support Uzbekistan's green transition and climate action. The plant is expected to provide electricity access to approximately 75,000 households in the Bukhara region. In Tajikistan, the IFC invested in the country’s first green bond, issued by Eskhata Bank. The bond will support climate-smart projects and MSMEs undertaking environmental projects. In Kazakhstan and Kyrgyzstan, in addition to investments to increase financial inclusion, the IFC has been evaluating new advisory and investment opportunities, including PPPs in areas such as drinking water supply, renewable energy (including geothermal solutions for heating and cooling), railway projects as part of the Middle Corridor, and the first municipal green bonds in Central Asia. The IFC also supports Kazakhstan's accelerated methane mitigation efforts, which align with the Global Methane Pledge. Wiebke Schloemer, the IFC’s Director for Türkiye and Central Asia, reiterated its commitment to the region: “Over the past 20 years, the region has seen substantial development, with an average annual growth rate of 6.2 percent. Central Asia must leverage the green transition to boost private investment, strengthen connectivity, and reduce resource dependency to continue this growth. The IFC aims to address these goals and continue to deliver solutions where we are needed most — from increasing access to finance for farmers and women entrepreneurs to creating jobs to continue to help countries transition to net zero.”

Finance Infrastructure Development EBRD Banking Healthcare Public health

EBRD Supports Healthcare and Municipal Transport Projects in Kazakhstan

The European Bank for Reconstruction and Development (EBRD) has supported Kazakhstan's first healthcare sector public-private partnership (PPP) project, and provided finance for a tram fleet renewal program in the Kazakh city of Pavlodar. The EBRD arranged a €365 million financing package provided by six financial institutions to construct and operate a 630-bed multidisciplinary hospital in Kokshetau, northern Kazakhstan. The financing, including the EBRD’s €105 million loan, will be provided to a Kazakhstan-based subsidiary of Rönesans Holding of Turkey. The project will be co-financed through parallel loans totaling up to €260 million provided by the Asian Infrastructure Investment Bank (AIIB), the German investment corporation DEG, the Islamic Corporation for the Development of the Private Sector (ICD), Proparco, a subsidiary of Agence Française de Développement, and the Development Bank of Kazakhstan (DBK). This first PPP in the healthcare sector of Kazakhstan and Central Asia will be a greenfield development of a 110,000 m2 facility, which will provide services to more than 730,000 people living in the city of Kokshetau and the broader region of Akmola. According to the PPP agreement, the private partner will be responsible for maintaining the facility and running a digital hospital information management system. At the same time, Turar Healthcare, a state-owned, non-profit national healthcare operator, will provide medical services. EBRD President Odile Renaud-Basso, who was visiting Kazakhstan, commented: “The EBRD is pleased to join forces with our longstanding client Rönesans Holding to launch the first healthcare sector PPP in Kazakhstan and the region. PPPs are recognized as one of the most effective forms of long-term contractual relationships between the public and private sectors. They will help provide sustainable healthcare solutions, introduce new technologies, and improve the quality of medical services.” The EBRD has also announced support for a tram fleet modernization program in the north-eastern Kazakh city of Pavlodar. The EBRD’s loan of up to €10 million to Pavlodar tram management company will help the company acquire up to 25 energy-efficient trams. A €4 million loan from the Clean Technology Fund will co-finance the project. The tram company handles almost 40 percent of passenger traffic in the city, with a population of more than 360,000. Yet nearly 60 percent of the company’s fleet was commissioned in the 1970s and 1980s and requires urgent renewal. New battery-powered trams will have an autonomous driving range of up to 20 km, which means they can continue operating during electricity outages. The EBRD has invested €10 billion in 328 projects in Kazakhstan, most of which support private entrepreneurship.