Foreign Investment - The Times Of Central Asia

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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.

Critical Minerals

Kyrgyzstan Seeks Foreign Investment in Critical Minerals Sector

Kyrgyzstan is emerging as a potential player in the global critical minerals market and is actively seeking international partnerships to develop its untapped geological resources. Speaking at the International Forum on Critical Minerals 2025 in Seoul on May 12-13, Deputy Minister of Natural Resources, Ecology, and Technical Supervision Marat Jusupbekov emphasized the country’s growing relevance in the strategic resource sector. He noted that Kyrgyzstan is home to 11 deposits of rare earth elements (REEs), positioning it as a promising destination for investment and cooperation. “Kyrgyzstan has significant reserves of rare and critical minerals that are essential for the energy transition and high-tech manufacturing. We are open to cooperation with global partners,” Jusupbekov said during his address. One of the most notable assets is the Kutessay II deposit, which holds more than 63,300 tons of rare earth metals, along with molybdenum, silver, bismuth, lead, and zinc. The government is promoting joint development of this site with the nearby Kalesai beryllium deposit, which contains an estimated 11,700 tons of beryllium. Both deposits are licensed to Kyrgyzgeology, a state-owned enterprise tasked with attracting foreign investment. Jusupbekov also highlighted the potential of the Kyzyl-Ompol uranium-thorium group, including the Tash-Bulak area, where titanium-magnetite reserves are estimated at 5.5 million tons. This project is licensed to Kyrgyzaltyn, the country’s largest mining company. The deputy minister underlined the strategic role of critical minerals in the global transition to clean energy and advanced manufacturing. Materials such as lithium, cobalt, manganese, gallium, indium, graphite, and zinc are essential for the production of solar panels, electric vehicle batteries, and other next-generation technologies. “Kyrgyzstan is committed to modernizing its mining sector by adopting green technologies and responsible extraction practices,” he said. “We invite international partners to co-develop critical mineral projects and advance sustainable industrial growth.” In December 2024, Kyrgyzstan signed Memorandums of Understanding with South Korea’s Ministry of Trade, Industry and Energy and the Korea Institute of Geoscience and Mineral Resources (KIGAM). These agreements laid the foundation for deeper cooperation and potential South Korean investment in Kyrgyzstan’s mining sector. The International Forum on Critical Minerals 2025, co-hosted by KIGAM, South Korea’s Ministry of Trade, Industry and Energy, and its Ministry of Foreign Affairs, brought together representatives from 12 countries, including Kazakhstan, Uzbekistan, Tanzania, the Democratic Republic of the Congo, Nigeria, Mongolia, Vietnam, Indonesia, Australia, Canada, and new participants Kyrgyzstan and Tajikistan.

Critical Minerals

Kazakhstan Eyes Entry into Global Gallium Market

The Eurasian Resources Group (ERG) is set to invest in gallium production and intensify exploration for copper and other critical minerals, aiming to position Kazakhstan as a key player amid rising global demand for strategic resources. Kazakhstan to Become World’s Second-Largest Gallium Producer ERG has announced a $20 million investment to launch gallium production in Kazakhstan, beginning in 2026. The metal, which will be extracted from bauxite ore, primarily used in alumina production, is targeted for supply to OECD countries. “ERG plans to become a significant player in the global gallium market, starting production in 2026 with the prospect of expanding volumes to 15 metric tons per year,” said the group's CEO, Shukhrat Ibragimov. Gallium is a critical mineral in high-tech industries, including semiconductors, radar systems, and aerospace navigation. It is listed as a strategic material by both the United States and the European Union. According to the U.S. Geological Survey, global gallium production reached 760 tons in 2023, with China dominating the supply. Following Beijing’s imposition of export restrictions on gallium, germanium, and antimony in December 2023, Western nations have been seeking alternative sources. Kazakhstan may now fill part of that void. Expanding Copper Prospects In tandem with its gallium ambitions, ERG is ramping up copper exploration efforts. At the AMM-2025 mining and metallurgical forum in Astana, ERG Exploration, a subsidiary of ERG, announced a significant copper discovery in the Karaganda region. “We have completed drilling 51 wells, copper ore has been discovered in 42 of them, with copper content in some samples reaching 6.7%,” said Zaura Kunanbayeva, ERG Exploration’s senior geologist. The Karabas site is estimated to contain over 250,000 tons of copper, with the potential to yield up to 1 million tons of ore. Additional finds include molybdenum, lead, zinc, and silver. A final assessment is expected in the second half of 2025. Tin Reserves Reassessed ERG has also reported revised figures for the Syrymbek deposit in North Kazakhstan, believed to be the world’s largest undeveloped tin reserve. Following a revaluation, tin reserves increased to 286,000 tons, while copper reserves were updated to 55,000 tons. “The price of tin has doubled in five years and recently reached $33,000 per ton. The project’s proximity to China, the world’s largest tin consumer, makes it strategically valuable,” said Aida Alzhanova, Deputy Head of Strategy at Solidcore Eurasia. Government Support and Foreign Investment At the same forum, Deputy Minister of Industry and Construction, Iran Sharkan, highlighted that more than $820 million has been invested in geological exploration since 2018. The government aims to expand the country’s exploration area from 1.9 to 2.2 million square kilometers by 2026. “As a result, we have seen a 33% increase in domestic copper processing and a twofold increase in gold ore production over the past 10 years. Kazakhstan has entered the top 20 countries globally in terms of gold reserves,” Sharkan noted. Kazakhstan’s mining sector is also attracting international attention. In May, Australian company C29 Metals Limited signed a joint exploration agreement with Astana-based Bask...

President Tokayev

Kazakhstan Aims to Revive Investment Appeal Amid Global Headwinds

Kazakhstan’s President Kassym-Jomart Tokayev has convened the 37th plenary session of the Foreign Investors Council, reaffirming its strategic role in ensuring the country’s economic sustainability and attracting international capital. Operating for over two decades, the council continues to serve as a vital platform for dialogue between the state and global business leaders. Despite global headwinds, sluggish GDP growth, inflation, and disrupted supply chains, Kazakhstan has shown economic resilience. According to Tokayev, the country’s GDP grew by 6% in the first five months of 2025, driven by gains in transport, logistics, construction, trade, mining, and manufacturing. New Tools to Support Investors Tokayev announced the creation of an Investment Task Force, which has resolved issues surrounding 137 projects totaling $70 billion. To safeguard investors from undue inspections and state pressure, a “prosecutor’s filter” has been introduced. Kazakhstan has also launched a National Digital Investment Platform, providing integrated government services through a single portal. A revised Tax Code, now under Senate review, proposes incentives for exporters and producers of high-value goods. [caption id="attachment_33266" align="aligncenter" width="2560"] Image: akorda[/caption] Sectoral Focus: Mining, Manufacturing, and Logistics Mining remains a key economic pillar, with major international players such as Rio Tinto, Fortescue, Ivanhoe Mines, First Quantum, and Teck Resources establishing operations in the country. The proposed tax reforms aim to stimulate the domestic processing of raw materials. In industrial production, firms like Alstom, Stadler, and Wabtec are investing in rolling stock, manufacturing, and maintenance. Wabtec, meanwhile, is planning a $200 million investment in alternative fuel technologies. Kazakhstan also ranks among the world's top grain exporters and holds the sixth-largest area of agricultural land. Multinationals, including PepsiCo, Fufeng Group, and Dalian Hesheng, are investing in the agro-industrial sector, enhancing both value-added production and technology adoption. The nation has initiated large-scale infrastructure projects: by 2029, it aims to reconstruct 11,000 km of railways and build 5,000 km of new highways. Key segments include Dostyk-Moyinty, Bakhta-Ayagoz, and Altynkol-Zhetigen. In 2025 alone, more than 13,000 km of roadworks are also scheduled. Terminal expansions at Almaty, Kyzylorda, and Shymkent airports have also been completed, increasing their combined capacity sixfold. Digital Future and Artificial Intelligence Kazakhstan now ranks among the top 30 countries in digitalization, according to the United Nations. Over 4,000 entities, including cryptocurrency exchanges, are registered with the Astana-based MCCE. Tokayev announced the launch of a CryptoCity pilot zone, enabling real-world digital currency transactions. With over 89% of transactions now cashless, Kazakhstan is positioning artificial intelligence as a cornerstone of its digital sovereignty and future competitiveness. [caption id="attachment_33267" align="aligncenter" width="2560"] Image: akorda[/caption] Foreign Investment Challenges The forum featured remarks from key international stakeholders, including EBRD President Odile Renaud-Basso, ADB Vice President Bhargav Dasgupta, and representatives from VEON, CNPC, and Alstom, as well as Kazakhstan’s Minister of Industry, Yersay Nagaspayev, and the Head of the Association of Foreign Investors, Erlan Dosymbekov. However, Tokayev’s pro-investment declarations come amid sobering data. For the first time in three decades, Kazakhstan lost its lead in Central Asia for foreign direct investment (FDI). According to the United...

Tashkent International Investment Forum

Uzbekistan Hosts Fourth Tashkent International Investment Forum, Seals $26.6 Billion in New Investment

From June 9-12, the Uzbek capital hosted the Fourth Tashkent International Investment Forum (TIIF), attracting more than 2,500 participants from 93 countries. Among the attendees were ministers, global corporate leaders, financial institutions, and economic experts. The forum served as a strategic platform for promoting Uzbekistan’s investment climate, advancing its reform agenda, and strengthening global partnerships. Laziz Kudratov, Uzbekistan’s Minister of Investment, Industry and Trade, underscored the country’s progress as an emerging regional investment hub. “Over the last seven years, major reforms have been carried out to liberalize the economy, improve the business climate, and create favorable conditions for investors,” he stated. Uzbekistan has drawn more than $90 billion in foreign direct investment in recent years, contributing to a 6.5% GDP growth in 2024. A Vision for 2030 The government’s “Uzbekistan 2030” development strategy aims to raise national GDP to $200 billion by the end of the decade. Foreign investment is central to achieving this target, and forums like TIIF are integral in showcasing Uzbekistan as a stable and attractive investment destination. This year’s forum concluded with the signing of investment agreements worth $26.6 billion. Since TIIF’s inception in 2022, it has facilitated 357 investment deals valued at $44 billion. Of these, 57 projects have been completed, with 263 others in development. Saudi Arabia led new investment commitments with $10.7 billion, followed by China ($7 billion), Russia ($5.5 billion), the UAE ($4.6 billion), Turkey ($3.6 billion), Germany ($3.4 billion), and France ($2 billion). Rising Global Interest Coinciding with the forum was the release of a new Investor Perception Report by Montfort Eurasia. The report highlights a threefold increase in interest from U.S. and UK investors in Central Asia and the Caucasus since 2023. Improved investor awareness and sectoral potential were cited as key drivers of this surge. John Mann, Director at Montfort Eurasia, emphasized Uzbekistan’s potential: “One opportunity that stood out to me was mining. A new mining law passed earlier this year has created a solid framework for foreign companies, particularly those interested in critical minerals.” Mann also identified pharmaceuticals, agriculture, and urban development as promising sectors, and stated that Uzbekistan’s geographic position is ideal for regional manufacturing hubs. According to Montfort’s data, U.S. and UK investors now rate their understanding of the region at 7.36 out of 10, up from 4.92 in 2023. “There’s definitely been progress,” Mann noted. “More executives are showing interest in emerging markets, and there’s a better understanding of this region. However, concerns remain around investment security and political stability.” Despite such concerns, 47% of surveyed investors expressed strong interest in Central Asia, up sharply from 15.5% last year. Leading sectors included industrial and manufacturing (63.5%), oil and gas (57.9%), and mining and natural resources (49.2%). Regional Integration and Vision In his address to the forum, President Shavkat Mirziyoyev highlighted that trade with neighboring countries has increased 3.5 times over the past eight years, reaching nearly $13 billion. To accelerate regional economic integration, he proposed developing a “Concept of an Integrated Region for Investment and...

Green Future

Central Asia’s Green Energy Dream: Too Big to Achieve?

Although most Central Asian nations are heavily dependent on fossil fuel production and exports, they are aiming to significantly increase the use of renewable energy, hoping to eventually become crucial suppliers of so-called green electricity to Europe. Achieving such an ambitious goal will be easier said than done, given that developing the green energy sector in the region requires massive investment. What Central Asian states – struggling to attract long-term private capital into clean energy projects – need is financing for projects that modernize power networks, improve grid stability, and enable cross-border electricity flows. These upgrades are essential for large-scale renewable energy deployment and regional trade in power. Most actors in Central Asia seem to have taken major steps in this direction. In November 2024, at the COP29 climate conference held in Baku, Kazakhstan signed several deals worth nearly $3.7 billion with international companies and development institutions to support green energy projects. Neighboring Uzbekistan, according to reports, has attracted more than €22 billion ($23.9) in foreign investment in renewable energy, while Kyrgyzstan, Turkmenistan, and Tajikistan – which is aiming to generate all its electricity from green energy sources by 2032 – have developed strategies to help increase their renewable potential. But to turn their goals into reality, all these nations will need funding – whether from oil-rich Middle Eastern countries, China, the European Union, or various international financial institutions. Presently, the development of the Caspian Green Energy Corridor – which aims to supply green electricity from Central Asia to Azerbaijan and further to Europe – remains the region’s most ambitious project. According to Yevgeniy Zhukov, the Asian Development Bank's (ADB) Director General for Central and West Asia, this initiative is a strategic priority for Kazakhstan, Uzbekistan, and Azerbaijan. “While the prospect of exporting green electricity to Europe is part of the long-term vision, the core goal of the initiative is to accelerate green growth within the region,” Zhukov told The Times of Central Asia. Together with the Asian Infrastructure Investment Bank, the ADB is funding a feasibility study for this proposed transmission corridor. The study will assess the technical and economic viability of such a system, along with the environmental and regulatory requirements. In the meantime, the ABD is expected to continue funding other green energy projects in the region. The financial entity, according to Zhukov, invested $250 million in Uzbekistan in 2023 to support renewable energy development and comprehensive power sector reforms, while in other Central Asian countries, it remains “firmly committed to driving the green energy transition.” “For instance, in Tajikistan we are exploring the potential to co-finance the Rogun Hydropower Project alongside the World Bank and other international partners. In Kyrgyzstan, our focus has been on supporting foundational reforms in the energy sector, including strengthening the policy and regulatory environment to attract private investment in renewables. In Turkmenistan, we’ve launched a total of $1.75 million technical assistance initiative to help lay the groundwork for future renewable energy development,” Zhukov stressed, pointing out that these efforts are part...