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Investments Kazakhstan Economy Foreign Investment

Kazakhstan Aims to Nearly Triple Investment in the Economy by 2029

Kazakhstan plans to significantly increase investment in its economy over the next five years, aiming to nearly triple current levels. However, officials from the Ministry of National Economy acknowledge that the primary challenge lies not in securing additional funds but in the shortage of high-quality investment projects. Shortage of Viable Projects At a recent meeting of the Expert Council under the Ministry of National Economy, Deputy Minister Arman Kasenov stated that the ratio of domestic investment to GDP currently stands at a modest 14-15%, a figure he described as objectively low. “To achieve higher rates of economic growth, investments need to increase 2.75 times, from $40 billion in 2024 to $103 billion by 2029,” Kasenov stated. To help reach this target, the government plans to allocate KZT 1 trillion (approximately $2 billion) through the state holding company Baiterek to stimulate business lending. This amount is expected to catalyze additional credit lines totaling KZT 8 trillion (around $15.9 billion). Still, Kasenov stressed that financing alone is not enough. “The real issue is the lack of quality projects,” Kasenov said. “This problem has been flagged by international development finance institutions. When we talk about increasing investment from $40 billion to $103 billion, it’s not just about capital, it's about where and how that capital is deployed.” Targeting High-Return Sectors To ensure impactful investment, the Kazakh government is prioritizing support for highly productive and export-oriented projects. These are concentrated in key sectors such as metallurgy, oil and gas, petrochemicals, and agriculture. Rustam Karagoyshin, the head of Baiterek Holding, outlined the financing model for investment projects, which consists of 60% market funding and 40% state-backed lending. In 2025, Baiterek plans to disburse a total of KZT 8 trillion in project financing, with KZT 3.75 trillion (around $7.4 billion) provided in the national currency. “Our main objective is to unify lending rates at 12.6% for end consumers. Standardizing rates will enable second-tier banks to participate across nearly all sectors where Baiterek operates today,” Karagoyshin said. Foreign Investment Outlook As The Times of Central Asia previously reported, Kazakhstan is looking to attract more foreign direct investment following a notable decline in 2023. Amid growing concerns about resource nationalism, the government is eager to position itself as a stable and attractive destination for international capital.

Bilateral Relations Foreign Investment Bilateral Cooperation State Visit Sadyr Japarov

Kyrgyzstan Raises First Sovereign Bond to Mitigate China’s Growing Influence

On February 4, Kyrgyz president Sadyr Japarov embarked on a four-day state visit to China, visiting Beijing and the northern city of Harbin for the opening ceremony of the 2025 Asian Winter Games. The visit comes against a backdrop of increasing engagement between Bishkek and Beijing. Temur Umarov, a fellow at the Carnegie Russia Eurasia Center, says that certain groups within the government are worried about an overreliance on China. “This is the problem of the current political leadership,” Umarov says. “They want to do more with China … they want to have more investment from China, but they have this debt that they inherited from the previous administrations.” Indeed, 36.7% of Kyrgyzstan’s foreign debt is now owed to the Export-Import Bank of China (Exim Bank), Beijing’s state-run lender which traditionally deals with foreign investments. China is also responsible for 46% of Kyrgyzstan’s foreign trade. With Russia hemorrhaging influence in the region amid its ongoing war in Ukraine, accessing new sources of investment has risen up the agenda in Bishkek. The Name’s Bond A key plank of these diversification attempts was put forward on January 13, when the Minister of Economy and Commerce, Bakyt Sydykov, announced plans to raise $1.7 billion through the sale of ten-year sovereign bonds in Hong Kong. “The country intends to tap into the international market for the first time,” Sydykov said. “We want to use Hong Kong’s role as a financial center to attract more potential investors, probably more diversified investors.” For Iskender Sharsheyev, an economist, this turn to the global markets cannot come soon enough. “This should have happened thirty years ago,” he says. Sharsheyev notes that the groundwork has been laid over the last few years, with ratings agency Moody’s reaffirming its B3 credit rating last year and projecting a “stable” outlook for the country. The yield of these bonds has yet to be announced, although Sharsheyev expects it to be reasonably high. “We expect that [the yield] will be worse for our country than for other countries, because, firstly, we are just entering. Secondly, the new flow of cash into the country could create risks; it can also spur inflation.” However, the high yield and the risk is seen as worth the cost. “The bond offering is an example of how Kyrgyzstan is trying to balance out its debt portfolio and have diversified ties with different creditors,” says Umarov. He notes that this mirrors a trend seen across Central Asia, where bonds have not traditionally been used as a means of fundraising but have become increasingly popular over recent years. In October 2024, Kazakhstan issued its first dollar-denominated Eurobond since 2015, the 10-year bond raising $1.5 billion with a yield of 4.714%. Sharsheyev believes that some of the proceeds of the bond sale will be used specifically to head off debts to Beijing. “China is the main [source of] pressure. To maintain sovereignty, we have begun to service the external debt. Our country has spent an average of $400-500 million on paying...

U.S. Foreign Investment Bilateral Relations

Kyrgyzstan’s Leadership and U.S. Partnership in Central Asia

Kyrgyzstan, or the Kyrgyz Republic, may be one of the smallest nations in Central Asia by population, but it has consistently played an outsized role in the region’s history and geopolitics. From bold governmental experiments to fostering regional cooperation, Kyrgyzstan continues to exceed expectations. Under President Sadyr Japarov’s leadership, the nation has made substantial progress in diplomacy, economic reform, and cultural preservation, while strengthening its relationships with the United States. On January 29, 2025, the Central Asia-Caucasus Institute located at the American Foreign Policy Council and TCA co-hosted a virtual event to examine the evolving U.S.-Kyrgyz bilateral relationship. The event focused on economic collaboration, security cooperation, cultural and educational exchanges, and a shared commitment to democratic values. It underscored the strengthening ties between the nations and their joint efforts to promote growth and stability in the region. Dr. S. Frederick Starr, Chairman of the Central Asia-Caucasus Institute at the American Foreign Policy Council, led a panel of experts, including Dr. Almazbek Beishenaliev, Professor at the Regional Institute of Central Asia, and Elena Son, Executive Director of the U.S.–Kyrgyzstan Business Council. Together, they explored Kyrgyzstan's diplomatic milestones, economic collaborations, and its rising profile in Central Asia. A Journey Toward Democracy and Cultural Significance Dr. Starr recounted Kyrgyzstan’s transition from Soviet rule to a developing democracy after gaining independence in 1991. Its first president, Askar Akayev, charted a vision of neutrality and openness, once calling Kyrgyzstan the "Switzerland of Central Asia." The nation experimented with a parliamentary system before reverting to a presidential model under President Japarov. Despite facing challenges, Kyrgyzstan remains culturally influential, particularly through the works of Chingiz Aitmatov, whose literary contributions continue to resonate across the globe. Transformative Leadership Under President Japarov President Japarov’s leadership since 2020 has, as highlighted by Dr. Starr, been marked by critical national reforms aimed at fostering stability and modernization. These efforts include tackling corruption, reclaiming control over vital national assets such as the Kumtor gold mine, and prioritizing energy and infrastructure investments to ensure long-term growth. Dr. Starr also emphasized President Japarov’s success in uniting Kyrgyzstan’s historically divided northern and southern regions. By enhancing connectivity through new transportation networks, such as airports and roads, Japarov has created economic opportunities while promoting national cohesion. On the regional front, Dr. Starr pointed to the landmark summit hosted by President Japarov in 2022 at Cholpon-Ata. This pivotal meeting resulted in agreements on 26 collaborative initiatives aimed at advancing shared objectives, further demonstrating Kyrgyzstan’s commitment to regional leadership and cooperative development within Central Asia. Strengthening Ties with the United States Dr. Almazbek Beishenaliev, Professor at the Regional Institute of Central Asia and former Minister of Education of Kyrgyzstan, highlighted the growth of U.S.-Kyrgyz relations, which date back to Kyrgyzstan’s independence in 1991. The U.S. played a key role in Kyrgyzstan’s accession to the World Trade Organization in 1998 and has provided substantial support over the last three decades, with $9 billion in assistance to Central Asia, $50 billion in loans, and investments exceeding $31 billion. These initiatives...

Green economy Economic Diversification Energy Infrastructure Foreign Investment

Uzbekistan Aims for 50% Green Energy by 2030 in Major Power Expansion

On January 28, President Shavkat Mirziyoyev held a meeting to outline Uzbekistan’s power sector development strategy for 2025-2035. In the past eight years, electricity production has increased by 38%, reaching 81.5 billion kilowatt-hours. Private sector participation has grown significantly, adding 11.2 gigawatts of new capacity. As a result, private power generation now accounts for 24% of the total, while renewable energy contributes 16%. Rising Demand and Infrastructure Expansion Household electricity consumption has doubled since 2016, surpassing 21 billion kilowatt-hours, driven by rising incomes and greater use of home appliances. By 2030, Uzbekistan’s population is expected to reach 41 million, and the economy is projected to grow 1.5 times, increasing electricity demand to 117 billion kilowatt-hours. By 2035, demand is expected to reach 135 billion kilowatt-hours - 1.7 times the current level. To meet this growing demand, the government plans to build new power plants and energy storage facilities. Infrastructure expansion will include 7,000 kilometers of new power lines and the introduction of digital management systems to ensure efficient distribution. If one region faces shortages, excess capacity from another will be redirected to balance supply. Over the next five years, $4 billion will be invested in modernizing the national power grid. Renewable Energy Targets and Efficiency Measures A key priority is reducing electricity costs by expanding renewable energy sources. Uzbekistan is considered to have strong solar, wind, and hydro potential, and by 2030, half of the country’s electricity is expected to come from these sources. Plans include constructing 3,000 small hydropower plants with a combined capacity of 164 megawatts and adding 750 megawatts from solar and wind power. The government had previously announced a goal to increase renewables’ share to 40% of total energy consumption by 2030, but the new target raises that figure to 50%. In addition to expanding clean energy, Uzbekistan is working to improve industrial energy efficiency. Some chemical and metallurgical plants consume twice as much energy as similar facilities worldwide, while cement production in the country requires 1.2 times more energy than global benchmarks. The goal is to reduce energy waste by 10 - 15% across all industries and cut electricity losses from 14% to 8 - 9% by 2030. Foreign Investment and Local Industry Opportunities International investors are already engaged in energy projects worth $26 billion, creating opportunities for local companies to supply equipment and materials. To guide these developments, the government has been tasked with preparing a long-term electricity strategy until 2035. The plan will focus on ensuring energy security, improving efficiency, and training skilled professionals to support Uzbekistan’s transition to a more sustainable power sector.

Banking EBRD Investment Prospects Foreign Investment

EBRD Investments in Central Asia Hit Record High in 2024

The European Bank for Reconstruction and Development (EBRD) has announced a record-breaking year in Central Asia, investing €2.26 billion across 121 projects in 2024. This marks a significant milestone for the region, with the EBRD nearly doubling its annual investment compared to 2023. In addition to its own financing, the EBRD mobilized €784 million from co-financiers, bringing total investments in the region’s real economy to over €3 billion. Uzbekistan and Kazakhstan were the primary beneficiaries of EBRD funding, receiving €938 million and €913 million, respectively. These figures placed the two nations as the fifth and sixth largest EBRD investment destinations globally in 2024. Tajikistan received €88 million in EBRD funding, while Kyrgyzstan attracted €52 million. The bulk of EBRD investments - 61% - was directed toward sustainable infrastructure projects, while 24% of funds were allocated to local banks for on-lending to small and medium-sized enterprises (SMEs), women and young entrepreneurs, and initiatives focused on climate resilience and resource efficiency. The remaining 15% supported corporate sector clients. As the largest institutional green lender in the region, the EBRD has fully aligned its operations with the Paris Agreement. In 2024, 58% of its investments supported green economy projects, reaffirming its commitment to promoting sustainable development. The EBRD achieved major cumulative milestones last year. In Kazakhstan, its total investments surpassed €10 billion, while in Uzbekistan, cumulative funding reached €5 billion. Tajikistan and Kyrgyzstan have now each received over €1 billion from the bank since it began operating in Central Asia three decades ago. Overall, the EBRD remains the leading institutional investor in Central Asia, having financed 1,163 green and inclusive projects totaling €21.5 billion to date.

Economy International investment Investment Prospects State Budget Foreign Investment

Central Asia Attracted $24.8 billion in Investments in 2024

Despite global economic challenges, Central Asia has experienced growth in attracting foreign direct investment (FDI). According to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), investment in the region increased by 27%, reaching $24.8 billion in 2024. Kazakhstan and Uzbekistan have become the main centers of attraction for capital, offering investors significant opportunities in the energy sector and green technologies. Uzbekistan attracted $4 billion in foreign investment, reflecting a 49% year-on-year decline. However, the country is actively developing sustainable environmental projects. South Korea’s Western Power plans to build a $152 million biofuel plant in Fergana region. The plant will process cotton stalks to heat greenhouses, which will replace coal and reduce emissions by 120,000 tons of CO2 over 10 years. This project reflects Uzbekistan's policy of reducing dependence on fossil fuels and introducing “green” technologies. Kazakhstan maintained its position as the regional leader in attracting investment, accounting for 63% of Central Asia's total FDI. The country increased its investment inflow by 88%, reaching $15.7 billion. An important role was played by Qatari company UCC Holding, which invested $11 billion in the construction of two gas processing plants, a compressor station, and new main gas pipelines. These projects strengthen Kazakhstan's role as a key energy hub in the region. Kyrgyzstan recorded the highest relative growth in investment, increasing by 310% to $2.1 billion. Turkmenistan and Tajikistan received $339 million and $281 million, respectively. As for outgoing investments, their volume from the region decreased by 58% to $2.3 billion. Russia remains the primary source of outgoing investments, accounting for 90% ($2.1 billion). Georgia invested $105 million, Azerbaijan $76 million, and Kazakhstan $47 million.