European Bank for Reconstruction and Development (EBRD)

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Investments

EBRD Invested Over $100 Million in Tajikistan’s Economy in 2025

The European Bank for Reconstruction and Development (EBRD) invested nearly $103 million in Tajikistan’s economy in 2025, signing 19 agreements over the course of the year. The funding targeted key sectors including energy, transport, municipal infrastructure, and private sector development. According to the bank, 83% of its 2025 loan portfolio in Tajikistan supported sustainable infrastructure projects. Another 14% of resources were channelled through local banks to finance small and medium-sized enterprises (SMEs), women’s and youth entrepreneurship initiatives, and programs focused on climate adaptation and resource efficiency. The public sector received the majority of financing, accounting for 83% of the EBRD’s annual activity in the country. Of the total lending volume, approximately 58% was directed toward green economy development. One of the year’s largest initiatives was a financing package of up to €43 million for the state-owned power distribution company, Shabakahoi Taqsimoti Barq. The package includes an EBRD sovereign loan of up to €28 million and a €15 million grant from the European Union. These funds are being used to modernize electricity metering and billing systems across nine cities in the Khatlon and Sughd regions. Significant investment also went into road infrastructure. An EBRD sovereign loan of up to €38 million, combined with an $86.7 million grant from the Asian Development Bank, will fund the reconstruction of the Danghara-Guliston highway. The route connects the north and south of the Khatlon region, which produces over half of Tajikistan’s agricultural output and is home to more than one-third of the population. A major energy milestone was achieved in 2025 with the completion of the Kayrokkum hydropower plant’s modernization. The plant’s installed capacity increased from 126 MW to 174 MW after all six units were brought online. Serving around 500,000 people in the Sughd region, the project, initiated in 2019, was financed with $196 million arranged by the EBRD. The bank also issued three sovereign loans totaling over €12 million for water supply system upgrades in Kulyab and Yavan, and for the modernization of Dushanbe’s centralized heating system. Alongside infrastructure projects, the EBRD expanded its support for the private sector. In 2025, more than 500 small enterprises across Tajikistan received various forms of assistance from the bank.

Heating

EBRD to Allocate $6 Million for Modernization of Dushanbe’s Heat Supply System

The European Bank for Reconstruction and Development (EBRD) will provide $6 million to Tajikistan for the implementation of the “Heat Supply in Dushanbe” project. The decision was approved by parliament on December 12. According to MP Nigina Sharifzoda, the financing will comprise a $3 million grant and a $3 million loan. The funds will be used to reconstruct and expand the capital’s central heating infrastructure. The project includes the modernization of Dushanbe’s heating networks, with the aim of ensuring reliable heat supply during the winter months. By 2028, over 500,000 residents are expected to benefit from stable heating services. This initiative is part of an ongoing program. The initial credit line has been in place since 2021, and the current stage was formalized as an additional credit agreement. The document was signed on October 6 between the Ministry of Finance, the Dushanbe mayor’s office, the state-owned Dushanbe Heat Network company, and the EBRD. First Deputy Minister of Finance Yusuf Majidi noted that the project is intended not only to modernize infrastructure but also to address long-standing systemic issues in the sector. Currently, more than 43% of Dushanbe’s residential buildings, schools, kindergartens, hospitals, and businesses are connected to centralized hot water supply. By the 2025-2026 heating season, an estimated 3,300 facilities are expected to be integrated into the system. Despite progress, challenges remain. Residents in several districts continue to report inadequate heating. A recent inspection by the Energy Supervision Agency revealed that in some heating stations, the temperature of the heat carrier was just 55°C, well below the standard 75°C. Separately, the EBRD, in partnership with the European Union, has announced another major initiative: the modernization of Tajikistan’s electricity distribution infrastructure, with €43 million allocated for the project.

Environment

Tajikistan Struggles to Fund Cleanup of Soviet-Era Uranium Waste

Tajikistan continues to grapple with the extensive environmental legacy of the Soviet-era uranium industry. Tens of millions of tons of radioactive waste still pose serious risks to human health and the environment. Addressing this legacy will require hundreds of millions of dollars and sustained international support. Uranium mining in Tajikistan began in the 1940s in areas including Taboshar, Adrasman, and nearby settlements. After mining operations were shut down, the country was left with abandoned mines, underground tunnels, and extensive tailings ponds containing more than 55 million tons of radioactive waste across an area exceeding 170 hectares. In 2023, partial rehabilitation work was completed in Taboshar, where 7.6 million tons of waste, representing 17.5 percent of the total, were remediated. The Tajik government has agreed to continue cooperation with Russia, which is expected to allocate approximately $17 million for the reclamation of selected facilities. However, the most hazardous areas remain unaddressed. These include early-stage Taboshar tailings ponds, underground workings, and the Degmai complex. International consultants Wismut GmbH, WISUTEC GmbH, and GEOS estimate that restoring the Taboshar facilities will require approximately $9.5 million, while reclamation of the Degmai tailings pond is expected to cost about $27 million. All of these sites are included in the International Atomic Energy Agency master plan and have been designated as funding priorities. Progress remains slow, largely due to limited financial resources. Despite some external support, current funding levels fall far short of what is required. To date, only 17 percent of contaminated sites have been decontaminated. The European Bank for Reconstruction and Development special environmental rehabilitation account for Central Asia has yet to become fully operational. In 2025, the government approved a national rehabilitation program covering the 2025 to 2030 period. The plan includes legislative updates, project design, implementation, and ongoing monitoring. Preliminary estimates suggest Tajikistan will need more than $110 million by 2030 to complete its remediation objectives. Given the scale of the required investment, international financing remains essential. Tajikistan is working to transform its uranium legacy into a manageable and transparent project, but without sustained international partnership, the challenge is unlikely to be resolved.

energy saving

EBRD and EU Allocate €43 Million to Modernize Tajikistan’s Power Grid

The European Bank for Reconstruction and Development (EBRD) and the European Union have announced a joint initiative to enhance the reliability and transparency of Tajikistan’s electricity distribution system. Under the agreement, a €43 million financing package will support the state-owned electricity distributor Shabakahoi Taqsimoti Barq (STB). The funding aims to reduce technical losses and improve efficiency by upgrading essential infrastructure. The “Energy Loss Reduction” project was officially signed on December 4 at Tajikistan’s Ministry of Finance. The agreement was endorsed by Minister of Finance Faiziddin Kahhorzoda and the EBRD’s permanent representative in Tajikistan, Holger Wiefel. The project is backed by €28 million in sovereign loans from the EBRD and €15 million in EU grants via the Asia-Pacific Investment Fund. Funds will be directed toward upgrading billing systems and installing new electricity metering equipment in nine cities across the Sughd and Khatlon regions. These areas are among the most affected by outdated infrastructure, which contributes to technical power losses, inaccurate metering, and the reduced financial viability of STB. The modernization program includes digitizing STB’s core operations and implementing cybersecurity measures to safeguard the national power grid. Technical assistance from both the EU and EBRD will support the rollout of these reforms. A key component of the initiative is human capital development. Specialized training programs on sustainable technologies and modern energy sector skills will be offered, with a focus on youth and women. This is intended to enhance the qualifications of local professionals and strengthen the regional labor market. The EBRD remains one of Tajikistan’s most significant international investors. To date, the bank has invested more than €1 billion across 188 projects in various sectors. The new energy initiative reflects the continued strategic role of international partners in supporting the modernization of Tajikistan’s critical infrastructure.

Entrepreneurship

Kazakhstan Aims to Double Output of Existing Medium-Sized Enterprises

Kazakhstan’s Ministry of National Economy, in partnership with the European Bank for Reconstruction and Development (EBRD), is developing a strategy to help existing medium-sized enterprises increase their production capacity two to threefold. The initiative is part of the “Improving the Investment Attractiveness of Medium-Sized Businesses” program. Deputy Minister of National Economy Yerlan Sagnaev announced the initiative at a press conference hosted by the Central Communications Service. According to Sagnaev, companies will receive state-backed support in the form of diagnostic assessments and customized development plans. “Today, medium-sized businesses are primarily concentrated in the manufacturing sector, which currently accounts for about 12% of total SME output. Yet there remains significant untapped potential for growth, as much as two to three times the current level,” he said. Sagnaev noted that the most active sectors include metallurgy, light industry, construction materials, mechanical engineering, and chemicals. The state plans to prioritize these industries, including through joint programs with the EBRD. According to ministry data, small and medium-sized enterprises (SMEs) now contribute 39.8% to Kazakhstan’s GDP. In the first half of 2025, the sector’s total output reached $82.6 billion, representing a 25% increase. Employment in the SME segment rose by 3.9% to 4.4 million people, with trade, industry, construction, transport, and agriculture driving the highest growth. However, challenges persist. A recent Business Climate rating by the “Atameken” National Chamber of Entrepreneurs shows that while 35.4% of small businesses plan to expand, only 10.1% are interested in launching new projects. Requests for government support remain modest at 18.8%, and 6.2% of respondents are considering staff cuts or closures. Timur Zharkenov, Deputy Chairman of the Atameken Board, highlighted the most pressing concerns for medium-sized businesses: a high tax burden (28.1%), labor shortages (16.2%), and inconsistent support from local authorities for investment initiatives. In autumn 2025, domestic manufacturers reported a decline in orders and a rise in production costs, reinforcing the urgency of state support and the need to improve operational efficiency.

Hydropower

Tajikistan Completes Modernization of Kairakkum Hydropower Plant

On November 20, Tajik President Emomali Rahmon officially inaugurated three newly modernized hydroelectric units at the Kairakkum Hydropower Plant (HPP) in Guliston, located in the northern Sughd region. Situated on the Syr Darya River, the Kairakkum HPP comprises six hydroelectric units, the last of which was commissioned in 1957. Over nearly seven decades of operation, the plant’s equipment had become outdated, leading to a decline in generation capacity. The facility currently provides electricity to approximately 500,000 residents in Sughd province. A modernization project for the aging plant began in August 2019. The first three upgraded units were brought online in September 2024. With the completion of the remaining three units, all six have now been fully renovated. [caption id="attachment_39735" align="aligncenter" width="1024"] Image: president.tj[/caption] Each upgraded unit now has a capacity of 29 MW, bringing the plant’s total capacity from 126 MW to 174 MW, an increase of 60 MW. As a result, annual electricity generation has risen from 650 million kWh to 900 million kWh. The modernization was backed by a $196 million financing package led by the European Bank for Reconstruction and Development (EBRD), which included: An $88 million EBRD loan A $37 million loan from the European Investment Bank A $50 million loan and grant from the Green Climate Fund A $21 million loan and grant from the Climate Investment Funds (CIF), directed to state-owned utility Barki Tojik. Tajikistan, which possesses vast hydropower potential but suffers from chronic energy shortages, has prioritized hydropower projects in recent years. Chief among them is the ongoing construction of the massive Rogun Dam and hydropower plant. These initiatives aim not only to address domestic supply issues but also to establish Tajikistan as a regional electricity exporter.