World Bank - The Times Of Central Asia

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Rural Internet

Kazakhstan Telecom Investment Tops $2.2 Billion, but Rural Fiber Gaps Persist

Investment in Kazakhstan’s telecommunications sector has exceeded $2.2 billion over the past three years. Yet as of October 2025, only 2,606 of the country’s 6,179 villages were connected to backbone fiber-optic networks. Deputy Prime Minister and Minister of Artificial Intelligence and Digital Development Zhaslan Madiyev presented the investment figures at the 2026 Mobile World Congress in Doha. By the end of 2027, the government aims to make high-speed wired internet available in more than 90% of villages. An August 2026 government update said fiber-optic lines had been laid in just 12 villages under an agreement with Kazakhtelecom to bring high-speed internet to more than 3,000 villages. However, even the presence of a backbone network does not mean that every household has internet access. Connecting residents requires local distribution lines and additional equipment. In small and remote villages, building this infrastructure is expensive, while the number of potential subscribers is limited. With support from the World Bank, Kazakhstan is implementing a separate project to build the local networks needed to connect homes in 1,123 villages. Operators will be eligible for reimbursement of up to half their verified capital expenditures after completing the work. The project is intended to make connections available to more than 445,000 households, representing approximately 2.3 million people. The minimum target speed is 100 megabits per second. Where laying cables is too expensive, satellite connections offer another option. In September, Beeline Kazakhstan and Starlink Mobile launched a Direct to Cell service that allows compatible smartphones to exchange text messages and use certain online features via satellite. The technology is primarily intended for areas without terrestrial mobile coverage and is not yet a substitute for full broadband internet. According to the International Telecommunication Union, a basic fixed-broadband package in Kazakhstan cost the equivalent of 0.79% of monthly gross national income per capita in 2025, compared with a global median of 2.5%. For residents of remote villages, however, affordability also depends on equipment and connection costs, as well as whether a network is available. Kazakhstan is also developing international data transmission infrastructure. On October 15, Kazakhstan and Azerbaijan inaugurated a submarine fiber-optic cable between Aktau and Sumgayit. The 380-kilometer line, with a planned capacity of more than 400 terabits per second, is intended to provide an additional data route between Asia and Europe through Azerbaijan, Georgia, and Türkiye, offering an alternative to existing routes through Russia. Configuration work on the Trans-Caspian cable was due to continue through the end of 2026. Bagdat Mussin, chairman of Kazakhtelecom’s management board, said the project’s first practical benefits were not expected before early 2027.

Poverty

Kazakhstan Poverty Reduction Stalls Despite Economic Growth

Kazakhstan has made little progress in reducing poverty in recent years despite continued economic growth, according to the World Bank’s October 2026 Poverty & Equity Brief. The Bureau of National Statistics puts the national poverty rate at 5% in 2025, unchanged from 2024. The World Bank’s brief gives a slightly lower figure of 4.9%, equivalent to approximately 1.02 million people living below the national poverty line. The national rate fell from 18.2% in 2006 to 2.9% in 2013. However, a 2018 change to the calculation of the subsistence minimum, which defines the national poverty line, limits direct comparisons with earlier figures. Much of Kazakhstan’s earlier success in reducing poverty was driven by higher earnings from employment. In 2025, however, gross domestic product per person grew by 5.2%, while wages fell by 1.4% and incomes by 2.3% after adjusting for inflation, according to the brief. The bank’s 2024 assessment linked slower poverty reduction to weaker economic growth and sluggish productivity gains. Kazakhstan’s economy remains heavily dependent on commodity exports, leaving household incomes vulnerable to economic shocks. The bank also uses a separate international poverty threshold of $8.30 per person per day for upper-middle-income countries, expressed in 2021 purchasing power terms to account for price differences between countries. Under this measure, 13.8% of Kazakhstan’s population was living in poverty in 2024. That represents a substantial improvement from 55.7% in 2006, although the share remained at roughly 14% between 2022 and 2024. Inflation has added to the pressure on household budgets, particularly among poorer families, which spend a larger proportion of their income on essentials. Although annual inflation has eased, prices continue to rise. The statistics bureau reported inflation of 9.2% in October 2026, with food prices 7.6% higher than a year earlier. The brief also highlights inequalities obscured by national averages. Citing estimates from the World Inequality Database, it notes that Kazakhstan’s highest-income 1% of adults received 14.9% of total income in 2024, almost as much as the 16.4% received by the lowest-income half. The bank’s projections put poverty under its international measure at 11.2% in 2025, 9.9% in 2026, and 8.7% in 2027. These projections are based on growth in economic output per person and remain highly uncertain pending household survey data, the bank warns.

Private Sector

World Bank: Central Asia Private Sector Needs Room to Grow

Central Asia is attracting growing interest from international investors, but turning that attention into lasting economic growth will require giving the private sector more room to develop, a senior World Bank official has said. Najy Benhassine, the World Bank’s division director for Central Asia, said the region had enjoyed strong economic growth, but much of it had been driven by public investment, favorable commodity prices, and remittances rather than improvements in productivity. In an interview published on October 27 by Novastan, an independent European news outlet, Benhassine discussed the region’s economic prospects over the coming decade. “The interest is real and, in some respects, historic,” he said, referring to growing engagement from foreign investors and governments. “Global attention generates visits, pledges, and headlines, but these are just the start.” Benhassine said Central Asia had seen expanding trade and transit activity, alongside increased foreign direct investment in extractive industries and transport infrastructure. However, these investments had yet to produce the wider economic benefits needed to make the region less dependent on natural resources. One of the main challenges is the gap between economic growth and productivity. According to Benhassine, labor productivity in manufacturing has stagnated or grown only modestly across most Central Asian countries, while small businesses continue to struggle to expand. Access to finance remains a major obstacle. Small and medium-sized enterprises often face high interest rates and collateral requirements that make investment difficult. Meanwhile, state-owned enterprises continue to absorb capital that could otherwise support private businesses. Uneven enforcement of regulations adds to the difficulties facing smaller firms. Benhassine pointed to the World Bank Group’s Access to Finance for Jobs and Growth (FINGROW) Program as one initiative intended to address these problems. The $4 billion FINGROW program aims to mobilize up to $6 billion in additional private capital across Europe and Central Asia, he said. Its first phase includes Uzbekistan, where the World Bank approved $105 million in financing in December 2025. The project aims to help around 7,000 businesses obtain credit by 2030. Education systems must focus on equipping graduates with skills that match employers’ requirements, rather than simply increasing enrollment, he said. In Uzbekistan, more than half of employers identify an inadequately skilled workforce as a significant constraint on growth. Benhassine identified Uzbekistan as one of the countries that had made significant changes to its economic system since 2017. He highlighted the liberalization of the exchange rate and the opening of previously state-dominated sectors to private investment. He also praised progress toward joining the World Trade Organization. Kazakhstan is seeking to reduce the dominance of state-owned enterprises. Tajikistan has introduced reforms aimed at increasing competition in telecommunications and aviation. In Kyrgyzstan, the government is working to expand opportunities for private participation in utilities. Benhassine said these reforms could help major projects, including the Kambarata-1 Hydropower Plant and the China-Kyrgyzstan-Uzbekistan railway, generate employment and wider economic benefits. Transport links have become increasingly important as Central Asia seeks to expand trade between Asian and European markets. But Benhassine warned that...

Electricity supply

Uzbekistan Secures $300 Million in Loans for Power Grid Upgrades

Uzbekistan has secured $300 million in loans from the World Bank and the Asian Development Bank (ADB) to modernize 60 electrical substations across the country. The upgrades aim to reduce power outages and electricity losses while making it easier to connect new solar and wind power plants to the grid. Electricity demand is growing as Uzbekistan’s cities and industries expand. Much of the country’s power grid was built decades ago, and aging equipment and overloaded substations contribute to electricity losses and supply disruptions. On October 27, the World Bank approved a $100 million loan. The ADB had previously approved a $200 million loan, with the agreement signed on October 15. The Uzbek government will contribute another $71 million, bringing the total program cost to $371 million. Substations direct electricity through the grid and adjust voltage before it reaches consumers. The funding will be used to replace outdated equipment and install digital control systems that allow operators to monitor electricity loads and detect faults more quickly. Uzbekistan plans to increase its installed capacity from solar, wind, and other renewable energy sources to 25 gigawatts (GW) by 2030. The substation upgrades are expected to allow the grid to accommodate at least 3.3 GW of additional renewable energy capacity. The World Bank expects annual electricity losses at the modernized substations to decline by 20 million kilowatt-hours by 2031. That is roughly equivalent to the annual electricity consumption of several thousand households. The bank also estimates that improved electricity supplies could help create or support 11,700 jobs over the five years after the upgraded facilities enter service. The state-owned National Electric Grid of Uzbekistan will carry out the program, which also includes improvements in maintenance, financial oversight, and cybersecurity. With the ADB as lead lender, the two banks have agreed to coordinate their assessments and oversight to reduce duplication and administrative costs. Since 2010, the ADB has provided Uzbekistan with more than $3.4 billion in financing and guarantees for the energy sector. In 2023, the bank separately approved $200 million to digitalize 26 distribution substations. For residents and businesses, the main measure of success will be whether electricity supplies become more reliable and power losses fall.

Rogun Dam

Tajikistan Ratifies $300 Million World Bank Grant for Rogun Dam

Tajikistan’s lower house of parliament has ratified a $300 million World Bank grant for the Rogun Hydropower Plant, providing fresh financing for the country’s largest infrastructure project. The agreement was approved on October 1. The funding comes from the International Development Association (IDA), the World Bank’s concessional financing arm for low-income countries. It will support continued construction and equipment installation, alongside safety and environmental safeguards and support for communities affected by resettlement. The World Bank approved the grant in June. Together with an earlier package, its approved financing for Rogun now totals $650 million. Tajikistan is also raising money from other international partners. Italy committed $150 million through its Climate Fund in July. The Asian Development Bank, Asian Infrastructure Investment Bank, European Investment Bank, Islamic Development Bank, and Gulf development funds have also approved or expressed interest in supporting the project. The World Bank expects up to $3 billion in concessional financing to be mobilized for the project. By August, the dam had reached a height of about 190 meters. About 145 meters remain before it reaches its planned height of 335 meters, according to Italian construction group Webuild, one of the main contractors on the project. Two generating units are already producing electricity while construction continues, with their output expected to increase as the reservoir level rises. The World Bank currently puts planned capacity at 3,780 MW and expects the plant to be fully operational in 2033. It estimates annual generation at about 14.4 billion kWh. Rogun is intended to reduce Tajikistan’s chronic winter electricity shortages and increase power exports. The World Bank expects electricity from Rogun to be exported to Kazakhstan and Uzbekistan. Hydropower could also help balance fluctuations in growing solar and wind generation across the region. Rogun is being built on the Vakhsh River, which joins the Panj to form the Amu Darya. Reservoir filling therefore also concerns downstream Uzbekistan and Turkmenistan, where Amu Darya water is extensively used for agriculture. The environmental coalition Rivers without Boundaries has criticized the project’s impact assessments, arguing that they rely on outdated data and do not adequately account for climate change or the project’s wider effects across the basin. The World Bank says Tajikistan must comply with regional water-sharing arrangements. Reservoir filling is expected to proceed gradually through 2039, with compliance monitored throughout the project. In September, the World Bank also published new resettlement and livelihood restoration documents for communities affected by construction and the expanding reservoir. The Times of Central Asia previously reported on the expansion of international financing for Rogun after Italy committed $150 million to the project.

Trade Logistics

World Bank Says Middle Corridor Needs More Than $55 Billion by 2040

Developing a transport corridor linking China and Central Asia with Europe across the Caspian Sea will require more than $55 billion in investment through 2040. But the World Bank’s recent report, Integration: World-Class Trade Logistics Along the Trans-Caspian Transport Corridor, argues that infrastructure alone will not resolve the difficulties of moving freight across borders and between rail and ships. The route is the Trans-Caspian Transport Corridor, better known as the Middle Corridor. Trains typically travel from China through Kazakhstan to the Caspian ports of Aktau and Kuryk, where containers are transferred to ships. In Azerbaijan, they return to rail and continue through Georgia and Turkey toward Europe. The report covers nine countries with a combined population of nearly 200 million. With targeted investment, the World Bank estimates that trade volumes along the corridor could more than triple and travel times could be halved. GDP across those countries could be around 3.3% higher by 2040, with about 2 million additional jobs. If infrastructure investment is combined with reforms to make trade and transport more efficient, corridor volumes could quadruple compared with 2023 and travel times could fall by about two-thirds. At least $25 billion would be needed to relieve bottlenecks on railways and at Caspian ports. Another estimated $30.5 billion would improve connections between the main corridor and local economies, including terminals and digital systems. In February, the World Bank approved an $846 million guarantee from the International Bank for Reconstruction and Development, alongside a $564 million co-guarantee from the Asian Infrastructure Investment Bank. The package is intended to help mobilize $1.41 billion in long-term commercial financing for rail infrastructure along Kazakhstan’s section of the Middle Corridor. One of the principal projects is the roughly 322-kilometer Mointy-Kyzylzhar railway. The new line is expected to shorten the route by 149 kilometers and relieve pressure on the existing rail network. But hours saved on the Kazakh rail leg could still be lost waiting for a ship or crossing a border. The World Bank proposes a single digital corridor system built around a Transport, Transit, and Trade (T3) document. A carrier would enter cargo information once, allowing transport and customs authorities in different countries to use the same data. The bank also proposes a joint venture between railway and Caspian shipping operators. It would allow customers to buy a single container freight service for the route rather than arranging rail and maritime transport separately. During a September visit to Kazakhstan, World Customs Organization Secretary General Ian Saunders called for common international data standards and closer coordination between neighboring customs administrations. The Middle Corridor is often described as an alternative route for Chinese goods traveling to Europe. Its railways and ports also need to carry goods produced by Central Asia’s own economies. The five Central Asian countries exported $8.1 billion worth of goods to one another in January-July 2026, up 25.4% from a year earlier. The World Bank expects cheaper and more predictable transport to help local producers sell to neighboring countries and more distant...