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Islamic finance

Uzbekistan Targets $50 Billion in Investment with Financial Reforms

Uzbekistan is preparing to introduce Islamic finance services nationwide, with the first offerings expected in 2027. Under the country’s updated “Uzbekistan 2030” development strategy, at least three commercial banks are expected to provide Sharia-compliant financial services by the end of the decade, marking a significant shift in the structure of the banking sector. Against this backdrop, President Shavkat Mirziyoyev was briefed on March 25 on a broader set of initiatives aimed at strengthening the country’s investment climate. These include plans to establish the Tashkent International Financial Center, launch an International Center for Digital Technologies, and gradually introduce Islamic finance mechanisms. The presentation comes as Uzbekistan seeks to position itself more competitively in the global economy amid rising geopolitical uncertainty and intensifying competition for foreign investment. Officials said the country’s natural resources, economic potential, and ongoing reforms create favorable conditions for attracting international companies exploring new markets. Mirziyoyev stressed the need to act swiftly to capitalize on emerging opportunities, noting that attracting foreign investors requires modern infrastructure, a transparent business environment, and legal systems aligned with international standards. Uzbekistan aims to attract more than $50 billion in investment this year. A central component of the strategy is the Tashkent International Financial Center, which is expected to serve as a platform for new investment flows and long-term economic growth. By 2030, it is projected to attract an additional $20-25 billion, contribute up to 1% of annual GDP growth, and create as many as 15,000 highly skilled jobs. The center will operate under a special legal regime incorporating elements of the common law system of England and Wales, while allowing its governing bodies to adopt independent regulations. Plans include the establishment of a Tashkent International Commercial Court and an International Arbitration Center to handle disputes. Investors are expected to benefit from tax incentives, simplified visa procedures, and the ability to freely move and repatriate capital, alongside access to modern financial instruments, including digital assets. In parallel, Uzbekistan is developing the International Center for Digital Technologies under the Enterprise Uzbekistan brand. The center will function under a special legal framework expected to remain in place until 2100. Within a regulatory sandbox, companies will be able to test new technologies, pay salaries in foreign currency, and operate under international labor and data standards. The digital center will focus on artificial intelligence, data processing, research and development, and startup support. By 2030, it is expected to attract up to 1,000 companies, create more than 300,000 jobs, and generate export revenues of up to $5 billion. Several major international technology firms have already expressed interest in the initiative. The introduction of Islamic finance is another key pillar of the reform agenda. The proposed system includes instruments such as murabaha, mudarabah, musharakah, and Islamic leasing, all designed to comply with national legislation. Tax measures are also under consideration, including exemptions on certain transactions and investment income. To oversee the sector, an Islamic Finance Council will be established under the Central Bank, with similar bodies to be created within...

World Bank

World Bank Approves $200 Million for Road and Transport Reforms in Uzbekistan

The World Bank’s Board of Executive Directors has approved a $200 million project to modernise transport infrastructure in Uzbekistan’s Surkhandarya region, the institution said in a statement on March 23. According to the World Bank, the five-year initiative will focus on reconstructing a key section of the M41 regional road corridor while also supporting broader reforms in the country’s transport sector. The project is expected to contribute to job creation and stimulate business activity along the upgraded route. Uzbekistan’s transport sector currently accounts for nearly 8% of gross domestic product and employs around one million people. Its performance has improved in recent years, with the country rising from 129th to 88th place in the World Bank’s Logistics Performance Index between 2014 and 2023. However, rapid growth in the number of vehicles has placed increasing pressure on infrastructure, with officials estimating that road capacity will need to expand by about 500% by 2030 to meet rising freight demand. “Developing efficient and safe road and railway networks is essential to connect people to jobs, support domestic and international trade, and strengthen Uzbekistan’s overall competitiveness,” said Najy Benhassine, the World Bank’s Division Director for Central Asia. A central component of the project involves reconstructing a 91-kilometer stretch of the M41 highway in Surkhandarya, a region bordering Tajikistan, Kyrgyzstan, and Afghanistan. The existing two-lane road will be expanded into a four-lane highway. Once completed, it is expected to serve around 35,000 drivers and passengers daily and improve access to transport services for approximately 550,000 residents living in nearby communities. The project will also finance upgrades to road surfaces, safety features, and bus stops, as well as the construction and rehabilitation of around 180 bridges and drainage systems designed to reduce flood risks. These improvements are expected to shorten travel times, with average speeds projected to increase from 65 to about 90 kilometers per hour on interurban sections, and to reduce accidents along the route. In addition to infrastructure works, the World Bank will support the development of a National Multimodal Transport Strategy. The roadmap is intended to strengthen government capacity, improve coordination between different modes of transport, and promote more resilient and efficient logistics systems. Further support will be provided to Uzbekistan Railways, aimed at improving corporate governance, financial transparency, service planning, and its ability to attract private investment. The latest project builds on ongoing cooperation between Uzbekistan and the World Bank. In December last year, the institution approved a $250 million loan to support reforms in the country’s education system through the Edumkon programme, which aims to expand access to higher and vocational education for around 600,000 young people between 2026 and 2028.

Coal Industry

Kazakhstan to Invest Over $15.5 Billion in Coal-Fired Power Generation

Kazakhstan is launching a large-scale investment programme in the energy sector. By 2030, the country plans to attract at least $15.5 billion for the development of coal-fired power generation. The corresponding national project has been approved by the government. According to government estimates, electricity demand in Kazakhstan will grow at an accelerated pace, partly due to the expansion of the IT sector, data centers, and AI. Under these conditions, the authorities are prioritising baseload generation, which renewable energy sources are not yet able to fully provide. The national project provides for the commissioning and modernisation of 7.8 GW of capacity. Key facilities include an energy cluster in Ekibastuz (2,640 MW), power plants in Kurchatov (700 MW) and Zhezkazgan (500 MW), as well as new combined heat and power plants in Kokshetau, Semey, and Ust-Kamenogorsk. Financing will come primarily from extra-budgetary sources through the attraction of private capital. The government expects the investments to generate a multiplier effect in the economy, including growth in mechanical engineering, energy equipment manufacturing, and automated systems. At the same time, 11 existing power plants are to be modernised. This is expected to reduce equipment wear by 12.6% and increase generation efficiency. Implementation of the project will also lead to an increase in thermal coal consumption of around 20 million tons per year. To ensure supply, additional investment is planned in transport infrastructure, including expanding the railcar fleet and modernising railway lines. Coal-fired generation is therefore set to become a driver not only for the energy sector but also for related industries. Despite the emphasis on coal, the authorities are counting on the introduction of “clean” generation technologies. New power plants will be equipped with modern emission-control systems, including electrostatic precipitators and desulphurization units. These measures are expected to reduce environmental impact and bring the industry closer to international standards. The project is expected to create about 4,500 permanent jobs, along with employee support measures such as subsidised mortgages. The launch of the project comes amid the global energy transition, creating a strategic dilemma. On the one hand, Kazakhstan aims to ensure energy security and sustain economic growth. On the other, pressure linked to the international climate agenda remains. As previously reported by The Times of Central Asia, the country plans to fully meet domestic electricity demand by 2027 and achieve a sustainable surplus by 2029, allowing it to begin exports. At the same time, new energy-intensive projects are under consideration, including the creation of a “data centre valley” in the Pavlodar region, which is also expected to rely on coal-fired generation.

Investment

Tajikistan’s Reliance on External Funding for State Investment Projects Is Growing

Tajikistan continues to implement a large-scale state investment programme. International financial institutions play a key role in financing these projects, however, while the government's own contribution remains limited. According to data from the State Committee on Investment and State Property Management, 82 state investment projects are currently under way in the country The total value of ongoing initiatives is estimated at approximately $4.67 billion. Of these, 55 projects are being implemented on a grant basis, five through loans, and another 22 have mixed financing. About $3 billion has already been allocated for procurement, works, and services related to the implementation of these projects. However, more than 70% of the funding is provided by just three international institutions. The World Bank remains the largest donor, contributing $1.725 billion (36.9%). It is followed by the Asian Development Bank with $914.7 million (19.5%) and the European Bank for Reconstruction and Development (EBRD) with $658.1 million (14.1%). Other investors include the Islamic Development Bank ($207.9 million), the Chinese government ($194.9 million), the Asian Infrastructure Investment Bank ($142.5 million), the German Development Bank ($129.3 million), and the European Investment Bank ($114.8 million). Against the backdrop of extensive external financing, Tajikistan’s own contribution remains small. The state is investing approximately $151.2 million, accounting for only 3.2% of the total. This means that the implementation of key infrastructure and social projects largely depends on international donors and lenders. At the same time, in 2025 Tajikistan managed to significantly increase capital inflows. Foreign investment reached approximately $7 billion, rising by nearly $2 billion (35.1%) compared with the previous year. The authorities hope to sustain this momentum by improving the investment climate, including through legislative updates. A key step was the adoption on May 14, 2025, of a new version of the law “On Investments and the Promotion of Investment Activity,” aimed at increasing the country’s attractiveness to international partners. The current development model allows Tajikistan to implement large-scale projects that would be difficult to carry out relying solely on domestic resources. However, this financing structure also increases dependence on external sources, making the economy more sensitive to the conditions set by international institutions and the global financial environment.

Aviation Investment

European Investment Fund Commits Over $200 Million to Tajik Airline

The European investment fund CFC s.r.o. plans to invest more than $200 million in the development of Tajikistan’s private carrier Shohin Airlines. The five-year agreement follows several months of negotiations between the parties. According to Shohin Airlines, the final round of talks took place on March 10, 2026, in Dushanbe. The meeting was attended by the airline’s chief executive officer, Zafar Ahmadzoda, and the founder of CFC s.r.o., Guntars Selikovs. One factor influencing the investor’s decision was the recent improvement in Tajikistan’s sovereign credit ratings by the international agencies Moody’s and S&P Global Ratings. This development has increased foreign partners’ confidence in the country’s economic stability. The parties agreed that the investment will be directed toward expanding the airline’s fleet, developing operational capacity, and modernizing infrastructure. “The signing of the investment agreement is an important milestone in Shohin Airlines’ development,” Ahmadzoda said, noting that the deal is expected to accelerate the company’s growth and expand its route network. Selikovs stated that negotiations lasted more than six months and included meetings in Dubai and several European countries. “This allowed us to thoroughly assess the company’s business model and market potential,” he said. Shohin Airlines is a private carrier focused on developing regional aviation in Tajikistan and neighboring markets. At present, the company operates specialized helicopter flights. The next stage of development will involve fleet expansion. In the near future, the airline plans to acquire an L-410 NG, a Czech-made turboprop aircraft designed for regional transport. CFC s.r.o., a fund registered in the Czech Republic, operates across markets in Europe, the Persian Gulf, and Central Asia. Its investment strategy focuses on fast-growing industries. The agreement with Shohin Airlines could become one of the largest private investments in Tajikistan’s aviation sector in recent years and may signal growing interest among international investors in the country.

Energy Project

Italy’s Eni Expands Energy Projects in Kazakhstan with Hybrid Power Plant

The Italian energy company Eni is accelerating the expansion of its projects in Kazakhstan. By the end of the year, the company plans to complete construction of a hybrid power plant in Zhanaozen, one of the country’s key oil and gas centers. The 247-MW project combines three energy sources: solar, wind, and gas generation. The approach is expected to reduce the carbon footprint while providing a more stable energy supply in a region where strategically important production assets are concentrated Construction is proceeding in stages. The first component is already operational. In September 2025, a solar power plant with 80,000 panels was commissioned. Full completion of the complex is scheduled for the end of 2026, following the launch of gas and wind generation facilities. According to the Ministry of Energy, the project is intended to strengthen energy security for major enterprises in the Mangistau region, including Ozenmunaygaz and the Kazakh Gas Processing Plant. In a region that regularly experiences power shortages, this is a significant development. The project was discussed during a meeting between Kazakhstan’s Minister of Energy Yerlan Akkenzhenov and Italy’s Ambassador to Kazakhstan Antonello De Riu. Italian companies are gradually expanding their presence in Kazakhstan’s energy sector, from upstream production to processing and power generation. Cooperation extends beyond electricity generation. In January 2026, QazaqGaz and Eni moved to the practical phase of exploration at the Kamenkovsky block in the Caspian Basin. Work is also continuing at the Yuzhny Shu-Sarysu and Bereke blocks. Another major initiative is the gas-chemical complex under construction in the Atyrau region. The polyethylene project, with a planned capacity of 1.25 million tons per year and an estimated cost of $7.5 billion, has already entered the construction phase. The project is being implemented by KMG PetroChem, with Italy’s MAIRE group (through its subsidiary Tecnimont) serving as a key contractor. At the same time, conventional power generation projects are advancing. Cooperation with Italian power engineering company Ansaldo Energia has enabled the installation of new gas turbines at Almaty CHPP-3, with equipment deliveries completed in January 2026. However, this expanding cooperation is taking place amid legal uncertainty. Earlier, Eni and Shell, partners in the development of the Karachaganak field, lost a key stage of arbitration proceedings in London and may be required to pay Kazakhstan between $2 billion and $4 billion. While this could affect future investment decisions, it has not so far slowed the growth of Italian companies’ activities in the country.