Foreign direct investment (FDI) - The Times Of Central Asia

Viewing results 1 - 6 of 9

Foreign Investment

Kyrgyzstan Sees Continued Growth in Foreign Direct Investment

Kyrgyzstan continues to show steady growth in attracting foreign direct investment (FDI), with figures exceeding pre-pandemic levels. According to the National Statistical Committee, FDI reached over $1 billion in 2024, and the positive momentum has continued into 2025. In the first quarter of 2025, Kyrgyzstan attracted $288.3 million in direct investment, up 44% compared to the same period in 2024. The National Statistical Committee categorizes investments as coming from either Commonwealth of Independent States (CIS) countries or non-CIS countries, with volumes from both sources remaining roughly comparable. Among non-CIS nations, China maintained its position as Kyrgyzstan’s largest investor, contributing $66.3 million during the first quarter. Among CIS countries, Russia led with $56 million, while Kazakhstan remained a key regional partner with nearly $50 million invested from January to March 2025. Other CIS countries contributed considerably smaller amounts. Turkey also continues to play a significant role, investing $62 million in Kyrgyzstan’s production sector. Other notable contributors include the Netherlands, with $23.8 million. Uzbekistan demonstrated marked growth, following the signing of a bilateral agreement on the demarcation of certain border areas and water resources. Uzbek investments reached more than $5 million in the first quarter of 2025, up sharply from $237,000 in all of 2024. India likewise recorded a surge in investment, increasing from $91,000 in 2024 to $1.9 million in the first three months of 2025, an almost 2,000% rise. Bishkek remains the country’s most attractive destination for foreign investment, drawing more than $525 million in 2024. The Chui region ranks second, driven by the expansion of factories and processing enterprises with foreign participation. The manufacturing sector continues to be the primary target for foreign investment, followed by financial intermediation and insurance. Additional capital is flowing into mineral extraction, trade, and equipment repair.

EU-Kazakhstan Coperation

EU–Kazakhstan Relations: Strategic Cooperation Amid Geopolitical Shifts

In a recent podcast discussion, EU Ambassador to Kazakhstan Aleška Simkić and Kazakhstan’s Ambassador to the EU and NATO, Roman Vassilenko, discussed the evolving relationship between the European Union and Kazakhstan and broader Central Asia. Their exchange offered insight into the shared strategic interests driving EU–Kazakhstan cooperation across trade, energy, critical raw materials, connectivity, and mobility. Trade and Investment: A Stable Foundation Trade and investment continue to underpin the relationship; the European Union remains Kazakhstan’s largest trading partner and top foreign investor. Bilateral trade reached $49.7 billion in 2024, with the majority comprising energy exports from Kazakhstan, highlighting its role as a key supplier to European markets. The EU collectively accounts for a significant share of Kazakhstan’s FDI, equal to €54.8 billion in 2022, representing approximately 50–55% of Kazakhstan’s total FDI. The Enhanced Partnership and Cooperation Agreement (EPCA), in effect since 2020, underpins the EU–Kazakhstan bilateral relationship, providing a legal framework for cooperation across 29 sectors. As noted by both ambassadors, it enables structured dialogue on trade, energy, governance, and sustainability. While political engagement has increased, both sides acknowledge that deeper implementation is needed to fully leverage the EPCA in line with the EU’s broader strategy for Central Asia. Roman Vassilenko acknowledged the recent momentum: “I think the relationship between Kazakhstan and the EU has strengthened tremendously over the past three and a half years. With a relatively new Commission in place in Brussels, and with the President of Kazakhstan committed to strengthening ties with the European Union as part of our balanced and pragmatic foreign policy, we are at a moment where we can truly advance, deepen, and strengthen our relations in many ways.” [caption id="attachment_34435" align="aligncenter" width="1431"] EU Ambassador to Kazakhstan, Aleška Simkić (left) with Kazakhstan’s Ambassador to the EU and NATO, Roman Vassilenko (right); Image: EU Delegation to Kazakhstan.[/caption] Energy and Raw Materials: Strategic Realignment While energy has long anchored EU–Kazakhstan ties, both ambassadors emphasized a shift toward broader, forward-looking cooperation. Ambassador Vassilenko identified critical raw materials and green hydrogen as emerging areas of strategic importance, offering Kazakhstan opportunities to diversify its economy while supporting the EU’s green transition. Kazakhstan, with its mineral wealth and renewable energy potential, is well-positioned to contribute to Europe’s supply chain resilience in clean technologies. The country’s abundant reserves of critical minerals—such as rare earths, copper, lithium, and cobalt—align with Europe’s need to diversify sources for its green transition. Coupled with growing investment in renewable energy and deepening cooperation with European partners, Kazakhstan stands out as a strategic supplier for clean-tech industries. Both envoys stressed the importance of moving from basic resource exports toward long-term industrial partnerships — including local processing, infrastructure development, and regulatory alignment — as a means of ensuring mutual benefit. Connectivity: The Middle Corridor and Infrastructure Links Connectivity also features prominently. The Trans-Caspian International Transport Route, or “Middle Corridor,” is increasingly viewed as a viable overland route connecting China to Europe via Kazakhstan. Cargo volumes have risen, and both the EU and regional stakeholders are investing in capacity...

Economy

China and Russia Remain Kyrgyzstan’s Largest Foreign Investors

The National Statistical Committee of Kyrgyzstan has released updated figures on foreign direct investment (FDI), revealing that China and Russia remained the country’s largest investors in 2024. According to the data published on April 15, Kyrgyzstan received $872.6 million in FDI in 2024, marking an increase from $844.9 million in 2023. China accounted for 23.9% of total FDI, followed by Russia with 22.7%, Turkey (10.2%), Luxembourg (8.8%), Kazakhstan (5.7%), the Netherlands (4.9%), and Azerbaijan (3.4%). The remaining 20.4% came from a mix of other countries. Compared to the previous year, Kyrgyzstan saw increased investment from Azerbaijan, Luxembourg, Germany, Turkey, the Netherlands, and Russia, while inflows from the UK, UAE, Kazakhstan, and China declined. Sector Breakdown The manufacturing sector attracted the largest share of foreign investment, receiving 33.2% of total FDI. This was followed by the financial sector (20.6%), wholesale and retail trade (18.7%), the mining industry (11.3%), and geological exploration (8.3%). Sharp Rise in Overall Investment The total volume of investments in fixed assets from all sources in the first quarter of 2025 reached 56.8 billion Kyrgyz som, reflecting a 90.6% increase year-on-year. This marks a significant acceleration compared to the 63.9% growth recorded during the same period in 2024. Officials attribute the sharp rise primarily to a 2.1-fold increase in domestic financing, while the volume of foreign investment in fixed assets during the same period decreased by 1.5 times compared to the first quarter of 2024.