Foreign Investment - The Times Of Central Asia

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Investments

Uzbekistan Attracts Over $8.7 Billion in Foreign Investment in First Quarter of 2025

Uzbekistan attracted more than $8.7 billion in foreign investment during the first quarter of 2025, marking a nearly 20% increase compared to the same period last year, according to President Shavkat Mirziyoyev's press service. The investment influx is being channeled into strategic sectors such as energy, metallurgy, chemicals, pharmaceuticals, transport, agriculture, water management, and public services. The government is placing particular emphasis on generating added value and creating new employment opportunities. By the end of the first half of the year, total foreign investment is projected to exceed $18 billion. For all of 2025, Uzbekistan aims to attract $42 billion in foreign investment and carry out 81 large-scale projects along with more than 8,000 small and medium-sized initiatives. In support of these goals, Mirziyoyev recently signed a decree aimed at bolstering production, exports, and entrepreneurship. Starting June 1, 2025, foreign nationals and stateless persons will be eligible to obtain a five-year residence permit by paying $200,000. An additional fee of $100,000 will apply for each accompanying family member, including spouses, children, and parents.

Lithium

German Company to Mine and Process Lithium in East Kazakhstan

Two new industrial facilities dedicated to the mining and processing of lithium are set to be established in the Ulan district of East Kazakhstan Region by 2029. The announcement was made by Nurymbet Saktaganov, akim of East Kazakhstan Region, who noted that plans are underway for the construction of a mining and processing plant, as well as a pegmatite ore processing facility. $500 Million Investment from Germany The project will be implemented with the participation of HMS Bergbau AG, a German mining company that plans to invest $500 million into the development of a lithium deposit discovered in 2023. The initiative will include both the extraction of raw materials and the production of lithium oxide concentrate, a product in high demand across the global high-tech sector. Germany’s interest in Kazakhstan’s rare earth resources was discussed during a September 2023 meeting between President Kassym-Jomart Tokayev and Dennis Schwindt, Chairman of the Board of HMS Bergbau AG. Tokayev reaffirmed Kazakhstan’s openness to foreign investment and emphasized the country’s intention to become a key player in the supply of strategic raw materials. He highlighted lithium’s growing importance in modern industry, particularly for renewable energy and high-tech manufacturing. Operating in the USA, Singapore, South Africa, Poland, and several other markets, HMS Bergbau AG is considered a major independent force in the global solid minerals sector. Its new facility in East Kazakhstan will serve as a vital link in the international lithium supply chain, amid rising global demand driven by electric vehicles, portable electronics, and energy storage systems. $15.7 Billion Discovery by South Korean Researchers In a parallel development, researchers from the Korea Institute of Geosciences and Mineral Resources (KIGAM) announced in 2024 the discovery of a lithium deposit in East Kazakhstan valued at approximately $15.7 billion. Spanning 1.6 square kilometers, the site was previously mined for tantalum. The research, commissioned by the Kazakh government, was based on geological data indicating frequent co-location of lithium, cesium, and tantalum deposits. “KIGAM has been studying the area since last May at the request of the Kazakh government, given that tantalum usually comes with lithium and cesium,” The Korea Times reported. Lithium: A Cornerstone of the New Economy Globally recognized as one of the most critical and scarce elements, lithium is essential for producing lithium-ion batteries that power everything from smartphones and laptops to electric cars and grid-scale energy storage systems. Kazakhstan’s efforts to harness its lithium reserves in East Kazakhstan are expected to boost the country's role in the global energy transition and significantly enhance investment opportunities in the region.

Economy

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

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...

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

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.