EBRD Provides $250 Million Loan to Upgrade Uzbekistan’s Irrigation Pumps

The European Bank for Reconstruction and Development (EBRD) has approved a sovereign loan of up to $250 million (€240 million) to support the modernization of 110 irrigation pumping stations across Uzbekistan. The funding, allocated to the Ministry of Water Resources, will enable the installation of modern, energy-efficient pumps in 10 regions. According to the EBRD, the project is expected to reduce electricity consumption by approximately 251,000 megawatt-hours (MWh) annually and cut CO₂-equivalent emissions by more than 117,000 tons per year. The financing will also cover refurbishment of related infrastructure and the installation of rooftop solar panels at select stations. This initiative is a core part of Uzbekistan’s national irrigation modernization program, which aims to reduce electricity consumption across the irrigation system by 25%. The program also includes the deployment of water-saving technologies that will reach nearly half of the country’s irrigated farmland. Currently, Uzbekistan operates over 1,600 irrigation pumping stations, an energy-intensive network crucial for the country’s agricultural sector. Recognizing the need for improved efficiency, the water management sector has declared 2025 the "Year of Enhancing Pumping Station Efficiency." In recent years, the country has invested $1 billion in upgrading major stations such as Karshi, Amu-Bukhara, and Amu-Zang. However, the degradation of smaller and mid-sized stations has continued to drive up irrigation water costs. Efforts to conserve water are also underway. By concreting 550 kilometers of canals and ditches, water supply to 200,000 hectares of farmland has been stabilized, saving an estimated 450 million cubic meters of water annually. In 2025, Uzbekistan plans to concrete an additional 18,000 kilometers of main canals nationwide.

EBRD Downgrades Kazakhstan’s 2025 GDP Forecast

The European Bank for Reconstruction and Development (EBRD) has revised its 2025 GDP growth forecast for Kazakhstan downward, from 5.2% to 4.9%. The adjustment was published in the bank’s May regional economic outlook. According to the EBRD, the downward revision is largely due to Kazakhstan’s GDP growth in the first quarter being driven primarily by higher oil output at the Tengiz field. While this expansion has supported short-term growth, the bank questions the sustainability of oil production as a long-term driver, particularly under current OPEC+ production limits. Oil Output and Constraints Tengizchevroil (TCO), the operator of the country’s largest oil field, increased daily production at Tengiz to a record 870,000 barrels in January 2025, up 45% from the 2024 average. Output climbed further to 950,000 barrels in March, before dipping slightly to an average of 884,000 barrels per day in early April. Industry projections suggest production may eventually reach one million barrels per day. However, the EBRD cautions that such gains may be constrained by Kazakhstan’s obligations under the OPEC+ agreement. In addition to concerns about oil production, the bank notes the risk of declining demand for Kazakh oil and metals, key exports, especially from China, one of Kazakhstan’s main trading partners. Inflation and Domestic Demand Rising inflation presents another significant challenge. Consumer prices rose 8.9% in January, 9.4% in February, and hit 10% in March, the highest level since November 2023. In April, inflation climbed further to 10.7%, raising concerns about the erosion of domestic purchasing power. Broader Economic Indicators Despite the EBRD’s revised forecast, the Ministry of National Economy reported on May 12 that Kazakhstan’s GDP grew by 6% in the first four months of 2025. For the January-March period, growth was recorded at 5.8%, supported by a range of sectors: transport (22.4%), trade (7%), agriculture (3.9%), and communications (2.6%). Growth in the transport sector was driven by an increase in freight volumes via rail and pipeline, accounting for 20.5% and 19.6% of sectoral output, respectively. Wholesale trade expanded by 7.4%, and retail trade by 6.1%. Outlook As previously reported by The Times of Central Asia, several analysts view ongoing volatility in global markets as indicative of a looming “perfect storm” for Kazakhstan’s economy. This sentiment is echoed in the EBRD’s cautious outlook, highlighting a convergence of external and internal pressures on the country's economic stability.