World Bank - The Times Of Central Asia

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Electricity

Central Asia Launches Regional Electricity Market with World Bank Support

On January 22, the World Bank’s Board of Executive Directors approved the 10-year Regional Electricity Market Interconnectivity and Trade (REMIT) Program, an ambitious initiative to establish Central Asia’s first regional electricity market. The program aims to boost cross-border electricity trade, expand transmission capacity, and lay the foundation for large-scale renewable energy integration across the region. Electricity demand in Central Asia is projected to triple by 2050 under a business-as-usual scenario. Yet electricity trade in the region currently accounts for only 3% of total demand. The REMIT Program seeks to harness Central Asia’s diverse and complementary energy resources: hydropower in Kyrgyzstan and Tajikistan, thermal power from coal and natural gas in Kazakhstan, Turkmenistan, and Uzbekistan, and the region’s rapidly expanding solar and wind potential. Over the next decade, REMIT aims to: Increase regional electricity trade to at least 15,000 GWh annually, enough to supply millions of consumers Triple regional transmission capacity to 16 GW Enable up to 9 GW of clean energy integration The initiative is designed to enhance regional energy security, reduce power outages, lower electricity costs, and promote a more resilient and interconnected grid system. Total indicative financing for the program is $1.018 billion, to be deployed in three phases. These funds will support the creation and operation of a regional energy market, boost transmission infrastructure, introduce digital technologies to improve grid reliability, and strengthen regional energy institutions and coordination mechanisms. Investments are also expected to generate both construction-related employment and high-skilled jobs tied to market operations. In the program’s first phase, Kyrgyzstan, Tajikistan, Uzbekistan, and the Central Asian Countries’ Coordinating Dispatch Center (CDC) Energia will benefit from grants and concessional financing totaling $143.2 million. This comprises $140 million from the World Bank’s International Development Association (IDA) and $3.2 million from the Central Asia Water and Energy Program (CAWEP). “The REMIT Program supports Central Asian countries’ ambition to deepen energy cooperation and create a regional electricity market,” said Najy Benhassine, World Bank Regional Director for Central Asia. “This will enable more efficient use of energy resources, including cross-border deployment of clean energy, improve access to reliable and affordable electricity, and support jobs. By 2050, stronger regional connectivity could generate up to $15 billion in economic benefits.” Charles Cormier, World Bank Regional Infrastructure Director for Europe and Central Asia, added that REMIT will advance energy security and unlock private sector investment. “The first phase alone is expected to enable about 900 MW of new clean energy capacity, leveraging $700 million in private investment. This will pave the way for a more resilient and interconnected power system across this dynamic region,” he said. CDC Energia will lead the implementation of market and institutional activities, while national transmission companies will be responsible for infrastructure investments.

Northern Aral Sea Rescue Project

Astana Accelerates Northern Aral Sea Recovery Plan

The Kazakh government plans to accelerate the second phase of the project to restore the Northern Aral Sea. Prime Minister Olzhas Bektenov has instructed the Ministry of Water Resources and Irrigation to secure financing for the second phase of the project by the end of 2026. The goal is to increase the volume of water in the Northern Aral Sea by around 10–11 billion cubic meters over the next four to five years. History of Degradation and Early Restoration Results The Aral Sea, which straddles the border between Kazakhstan and Uzbekistan, began to shrink rapidly in the 1960s due to large-scale irrigation projects that diverted water from the Amu Darya and Syr Darya rivers for cotton cultivation and other agricultural needs. As a result of the sea’s degradation, the Northern Aral Sea separated in 1987 and has since been sustained largely through the construction of the Kokaral Dam. In 2012, the sea and the Syr Darya delta were added to the Ramsar List of Wetlands of International Importance. Since then, Kazakhstan has undertaken systematic efforts to restore the northern part of the former Aral Sea. Unlike earlier efforts to save the Aral Sea as a whole, Kazakhstan’s approach since the mid-2000s has been shaped by a narrower and more pragmatic premise: that partial restoration is environmentally and politically achievable, while attempts to revive the entire basin are not. The construction of the Kokaral Dam marked a turning point, demonstrating that targeted hydraulic interventions could stabilise water levels, reduce salinity, and revive fisheries in the northern basin, provided expectations were kept within achievable limits. The recovery has already enabled the return of small-scale fishing, improved local livelihoods, and reduced dust storms from the exposed seabed around Aralsk. This strategy reflected a deliberate acceptance that restoring the Northern Aral would come at the expense of the southern basin, prioritising long-term ecological viability over symbolic ambitions. Over the past several years, roughly 5 billion cubic meters of water have been redirected into the Northern Aral Sea basin, increasing its total volume to more than 23 billion cubic meters. This exceeds the targets set out in Kazakhstan's Water Resources Management Concept, which had forecast reaching 20.6 billion cubic meters by 2025, with that volume previously expected only by 2029. [caption id="attachment_24691" align="aligncenter" width="2560"] Tastubek Bay, Northern Aral Sea; image: TCA, Stephen M. Bland[/caption] Infrastructure Plans and International Support With the support of the World Bank, Kazakhstan is considering raising the height of the Kokaral Dam by up to two meters and constructing a new hydraulic facility. These upgrades aim to increase both the volume and quality of water in the Northern Aral Sea, rehabilitate the Syr Darya delta, and reduce salt dispersion from the exposed seabed. The second phase of the initiative targets increasing the sea’s volume to 34 billion cubic meters. Bektenov has directed the Ministry of Water Resources and Irrigation to finalize technical preparations by mid-2026 and secure financing by the end of the year, including through international partnerships. The second phase...

Education reform

World Bank Approves $250 Million Loan to Expand Student Financing in Uzbekistan

The World Bank has approved a $250 million loan to support Uzbekistan’s ambitious reform of its student financing system, the institution announced on December 11. The funding will back the Edulmkon Program, a three-year initiative aimed at expanding equitable access to higher and vocational education across the country. Scheduled for implementation between 2026 and 2028, the program is expected to benefit approximately 600,000 young people. Roughly 80% of the loan will be allocated to tuition loans for students from low-income families and for women, groups that continue to face significant barriers to accessing higher education. Uzbekistan, home to around 10 million people aged 14 to 30, has made educational reform a national priority in recent years. This push has led to a surge in the number of universities and vocational institutions, as well as a dramatic rise in enrollment. Between 2017 and 2024, youth participation in higher education increased from 8% to 48%. However, the rapid expansion has exposed weaknesses in the country’s student loan system, which is based on state subsidized loans issued through commercial banks. The World Bank has noted that the current model is not well aligned with labor market needs, as loans are not directed toward high demand fields such as science, technology, engineering, and mathematics (STEM), as well as information and communication technology (ICT). This misalignment has contributed to graduate underemployment, while gender disparities persist. Although women represent more than half of all university students and are the primary recipients of tuition loans, only one-third of female students are enrolled in STEM disciplines. The Edulmkon Program, to be led by the Ministry of Economy and Finance, will address these challenges through a series of reforms. These include modernizing tuition loan management, improving inter-agency coordination, and launching a centralized digital platform to streamline loan processing and improve transparency. The program will also revise eligibility and subsidy criteria to better serve vulnerable students. A cornerstone of the reform is the introduction of an income-contingent loan system, where repayments are based on a graduate’s income. This approach is designed to protect low-income borrowers and those facing temporary unemployment after graduation. By the end of 2028, students are expected to access loans through 12 participating commercial banks operating in coordination with the Ministry. The World Bank also noted that the program aims to attract approximately $30 million in private capital, reducing fiscal pressure on the state while expanding access to education financing.

External debt

Uzbekistan’s External Debt Reaches $43.97 Billion

Uzbekistan’s external debt reached 43.97 billion dollars as of October 1, according to data released by the Ministry of Economy and Finance. The increase of 473 million dollars over the previous quarter reflects a slowdown in borrowing, even as the government continues to rely on foreign funding to sustain public spending and major infrastructure projects. The country’s largest creditor remains the World Bank, which has extended 8 billion dollars in loans. This is followed by the Asian Development Bank with 7.5 billion dollars and international investors who hold 5.8 billion dollars in Eurobonds. Loans from Chinese financial institutions total 3.7 billion dollars, while Japanese lenders account for 3.1 billion dollars. Additional borrowing includes 1.7 billion dollars from the Asian Infrastructure Investment Bank and 1.2 billion dollars from France. Multilateral lenders such as the Islamic Development Bank also contribute to the total, along with a group of smaller international creditors that collectively account for 2.5 billion dollars. Debt denominated in U.S. dollars comprises 63% of Uzbekistan’s total external debt, while 12% is in Uzbek som, 8% in euros, and 6% in Japanese yen. The remainder is held in Special Drawing Rights and other currencies. In a related development, RIA Novosti, citing World Bank figures, reported that Uzbekistan increased its debt to Russia by 39 million dollars in 2024. This small rise came amid a broader trend across 38 countries whose combined debt to Russia grew to 33.1 billion dollars last year, the highest level since 1998.

Rogun Dam

Environmental Groups Criticize World Bank’s Decision on Rogun Dam Complaint

Environmental advocates have sharply criticized the World Bank’s decision to reject a request for a full investigation into Tajikistan’s Rogun Hydropower Plant, citing concerns over potentially severe environmental and social consequences for communities downstream along the Amu Darya river in Uzbekistan and Turkmenistan. According to the international coalition Rivers without Boundaries, the World Bank’s Board of Executive Directors dismissed the complaint despite mounting evidence that the project could exacerbate water scarcity, degrade water quality, damage vulnerable ecosystems, and displace rural populations dependent on agriculture and access to clean water. The complaint, filed earlier this year on behalf of affected communities, argued that the project’s environmental impact assessments were based on outdated data and non-binding verbal assurances from Tajikistan that the reservoir would not be operated at full capacity. The World Bank’s Inspection Panel registered the complaint in April 2025 and, after conducting an initial review, including a fact-finding visit to Tajikistan in June, recommended a comprehensive investigation, citing a strong likelihood of harm. However, the Bank’s Board rejected that recommendation, asserting that only citizens of the country receiving Bank financing are eligible to request an investigation. This decision surprised observers, particularly given that the Bank had previously accepted similar complaints from Uzbekistan over the same project in 2010. Environmental groups argue that the Board’s procedural reasoning allows it to ignore the project's far-reaching transboundary impacts. Evgeny Simonov, a lead expert at Rivers without Boundaries, stated that the Inspection Panel’s own findings validated the downstream communities’ concerns. He accused the Bank of avoiding accountability by hiding behind technicalities. Alexander Kolotov, director of the same coalition, said the ruling reveals a contradiction between the Bank’s public commitments to inclusive development and its actual response to cross-border grievances. He warned that dismissing downstream voices undermines the principles of equitable and participatory water governance. Environmental experts also caution that the refusal to launch an investigation leaves no recourse for affected communities should their fears materialize. Potential long-term impacts include increased soil salinity, reduced agricultural productivity, and the erosion of traditional rural livelihoods. The Rogun Alert coalition, an alliance of international environmental organizations, announced plans to continue monitoring the situation and to explore alternative mechanisms to protect the environmental rights of the region’s residents. Previous assessments had warned that filling the Rogun reservoir could reduce water flows to the Amu Darya delta by 25% or more, with potentially devastating effects on ecosystems and the wellbeing of up to 10 million people in Uzbekistan and Turkmenistan.

Reforestation

Natural Barriers: Kyrgyzstan Fights Disasters with Reforestation

Kyrgyzstan’s Ministry of Emergency Situations, in collaboration with representatives of the World Bank, has surveyed floodplain areas in the Jalal-Abad region to identify zones most vulnerable to erosion and flooding. The ministry's press service reported that environmental protection efforts will soon begin in these areas, aimed at strengthening soil stability and reducing the risk of natural disasters. The Forestry Institute had earlier designated the region as a pilot site for environmental initiatives. Emergency services personnel and forestry specialists plan to plant trees to establish protective forest belts. The trees’ root systems are expected to reinforce the soil and serve as natural barriers against landslides and mudflows. Last year, the region suffered severe rainfall, triggering mudslides that nearly destroyed two villages. A 10-year-old child lost their life, and over 300 families were evacuated. The disaster also inundated a section of the Bishkek-Osh highway, paralyzing traffic for several hours. “Visiting the ravines allowed us to assess their current condition and identify the areas most vulnerable to erosion. The timely implementation of protective measures, such as planting trees and applying bioengineering solutions, will not only mitigate flood risks but also help restore ecological balance,” the ministry stated. The project is funded by the World Bank and the International Development Association. The Jalal-Abad region has been selected for the pilot phase, with similar initiatives planned for other regions across the country. A recent World Bank report emphasized the economic costs of forest loss, noting its impact on the water cycle, soil stability, and drought resilience, factors that contribute to billions of dollars in global losses. “People and communities around the world are facing not only an environmental crisis but also an economic one. The good news is that solutions exist. If countries start investing now, natural systems can be restored, delivering strong returns in economic growth and job creation,” said Axel van Trotsenburg, Senior Managing Director at the World Bank. Experts argue that environmental programs should not be viewed as obstacles to development, but rather as key to building more sustainable and resilient economies.