Financing Agreement for China-Kyrgyzstan-Uzbekistan Railway Project Signed in Bishkek
On December 16, a loan agreement was signed in Bishkek to finance the construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway, an ambitious regional transport project intended to bolster connectivity across Central and South Asia. According to the Kyrgyz government, the agreement was concluded between China-Kyrgyzstan-Uzbekistan Railway Company LLC, a joint venture formed by the three participating countries and a syndicate of Chinese banks, including the China Development Bank and Eximbank. The CKU railway has been discussed for more than two decades, but repeatedly stalled over financing, route selection, and technical concerns. Momentum increased after 2022 as China sought alternative westbound transport corridors and Central Asian states looked to diversify trade routes and reduce reliance on existing transit pathways. The total cost of the railway project is estimated at $4.7 billion. Half of that amount, approximately $2.3 billion, will be provided as a 35-year loan from China to the joint project company, which will be responsible for repayment. The remaining $2.3 billion will be contributed to the company’s authorized capital: China will cover 51%, while Kyrgyzstan and Uzbekistan will each provide 24.5%. The CKU railway is a strategically significant infrastructure initiative spanning 523 kilometers. Construction officially began on December 27, 2024, in Kyrgyzstan’s Jalal-Abad region. Once completed, the railway will link Kashgar in China with Torugart, Makmal, and Jalal-Abad in Kyrgyzstan, and continue on to Andijan in Uzbekistan. A cargo transshipment station and logistics hub are planned in Makmal. The railway is expected to handle up to 15 million tons of cargo annually. Despite its strategic appeal, the project has raised concerns about debt exposure, particularly for Kyrgyzstan, which already relies heavily on Chinese financing. Officials say the joint-venture structure and long loan maturity will limit fiscal risks, though critics argue projected cargo volumes will need to be met for the railway to be financially sustainable. Currently, neither Kyrgyzstan nor Uzbekistan has a direct rail link with China; the only such connection in Central Asia runs through Kazakhstan. For Uzbekistan, the railway is expected to shorten transit times to Chinese markets and expand export capacity for industrial and agricultural goods. Officials in Tashkent have argued that the CKU route could reduce delivery times by several days compared with existing rail corridors. The CKU railway is among the most technically complex projects in the region. It includes the construction of 50 bridges and 29 tunnels, totaling 120 kilometers in length, meaning roughly 40% of the route will consist of bridges and tunnels. The Kyrgyz section alone will cover 304 kilometers. On December 5, Chairman of the Kyrgyz Cabinet of Ministers Adylbek Kasymaliev visited the construction site of one of the tunnels in the Jalal-Abad region to inspect progress. According to government sources, work has begun on 18 of the 29 planned tunnels and 17 of the 50 bridges. The project currently involves 5,695 pieces of machinery and over 5,000 workers. For Kyrgyzstan, the CKU railway represents the largest infrastructure project in the country’s history. Authorities view the project as a chance to transform...
