EBRD sets an investment record in Central Asia

This article is brought to you in association with EBRD.

• EBRD invests almost €2.26 billion in six regional economies
• Over 60 per cent of funds channelled to support sustainable infrastructure projects
• 58 per cent of investments promote green economy financing

The European Bank for Reconstruction and Development (EBRD) has set a new operational record in Central Asia by investing €2.26 billion through 121 projects in six regional economies last year – almost doubling its annual investment in Central Asia compared with 2023. It also mobilised €784 million from co-financiers, thus bringing more than €3 billion into the region’s real sector. 

Uzbekistan and Kazakhstan were the leading recipients of the EBRD funding (€938 million and €913 million respectively). The countries also became the fifth and sixth largest investment destinations for the Bank globally. Elsewhere in Central Asia the EBRD provided  €264 million for projects in Mongolia, €88 million in Tajikistan and €52 million in the Kyrgyz Republic.

Sixty-one per cent of the Bank’s funds were used to support sustainable infrastructure projects and 24 per cent of the loans were provided to local banks for on-lending to small and medium-sized enterprises (SMEs), women and young entrepreneurs, as well as for climate resilience and resource efficiency lending. The remaining 15 per cent of loans were channelled to corporate sector clients. Fifty-eight per cent of the investments by the EBRD – the region’s largest green lender and whose operations are fully aligned with the Paris Agreement – were aimed at supporting green economy projects.

In 2024 the EBRD’s cumulative investment in Kazakhstan surpassed the €10 billion mark and reached €5 billion in Uzbekistan. Both Tajikistan and the Kyrgyz Republic have now attracted over €1 billion from the EBRD since the beginning of operations there 30 years ago. 

Leading the way

A number of projects that the Bank financed were innovative and the first of their kind in Central Asia:

• the first renewable hydrogen facility in Central Asia; the EBRD provided a US$ 65 million (€ 59 million) financing package to ACWA Power, which will help to decarbonise the fertiliser production sector in Uzbekistan
• the construction of a new wastewater treatment plant and associated infrastructure in Kazakhstan’s city of Aktobe; the EBRD provided a sovereign loan of €96.4 million in what was the EBRD’s largest municipal project in Central Asia to date
• an investment of US$ 12.5 million (€ 11.3 million) in a green bond issuance by Khan Bank to support the first such bond of a local commercial bank listed on the Mongolian Stock Exchange
• the acquisition of a 17.36 per cent stake in Sarytogan Graphite Limited, an Australian Securities Exchange-listed company exploring the graphite deposit in the Karaganda region of Kazakhstan – it was the Bank’s first direct equity investment in the critical raw materials sector in Central Asia
• investing almost US$ 42 million (€ 38.1 million) in shares of Kazakhstan’s flagship carrier, Air Astana, through an initial public offering, in what was the country’s first partial privatisation.

Sustainability

Fresh EBRD funds were committed to support greater sustainability of the national grid operators in Kazakhstan and Uzbekistan and facilitate the integration of renewables. The Bank provided a €252 million loan to the Kazakhstan Electricity Grid Operating Company (KEGOC) for the construction of around 600 km of 500kV transmission infrastructure and for the integration of the West Kazakhstan Power System into the country’s Unified Power System. Its sovereign loan of US$ 66.4 million (€ 60.3 million) to the National Electric Grid of Uzbekistan (NEGU) will support the construction of a 230 km 500 kV transmission line in the Navoi region. This project will help to eliminate bottlenecks in the grid and reduce electricity outages.

In Uzbekistan the EBRD organised an A/B loan of US$ 226 million (€ 205 million) for the development, design, construction and operation of a 200 MW solar photovoltaic power plant and a 501 MWh battery energy storage system (BESS) in the country’s Tashkent region. To date, this is one of the largest EBRD-supported BESS projects in the economies where the Bank operates.

In the Kyrgyz Republic the Bank’s funds were channelled to support sustainable operations of the national grid operator, the National Electric Grid of the Kyrgyz Republic. The EBRD organised a €14 million financial package for upgrades the existing or installation of new transformers and replacement of associated equipment in the Osh and Issyk-Kul regions.

In Tajikistan the Bank organised a financial facility of €31 million for the national transmission network operator Shabaqahoi Intiqoli Barq. The funds will help upgrade the existing transformer and construct a new one at the Sugd-500 substation in the north of the country.

Infrastructure

In the social infrastructure sector, the EBRD was the key part of the first major public-private partnership (PPP) project in Kazakhstan and Central Asia. It arranged a financing package of €365 million provided by six financial institutions for the construction and operation of a 630-bed multidisciplinary hospital in the city of Kokshetau.

An EBRD sovereign loan of up to US$ 238 million (€ 216 million) will help to rehabilitate a key road and build a bridge across the Amu Darya river in the Khorezm region of western Uzbekistan, thus contributing to the development of sustainable transport connections in Central Asia.

In Mongolia the Bank extended a sovereign US$ 43.2 million (€ 39.2 million) loan and a €5 million capital grant for the design and construction of a new 250-bed hospital in the city of Darkhan.

The EBRD continued rolling out its flagship Green Cities programme designed to tackle environmental challenges and encourage green investments in municipal infrastructure. The EBRD’s sovereign loan of €28.45 million will help finance major transport improvements in the riverside area of the Tajik capital, Dushanbe. It will help upgrade key infrastructure and develop sustainable transport in the city.

Jointly with donors, the EBRD provided financing to improve the efficiency of water use and to help reduce the strain on water resources in the Kyrgyz Republic and Tajikistan. Projects supported upgrades to water and wastewater infrastructure, including pumping stations and water metering.

Small businesses

The EBRD continued to support SMEs by facilitating their access to finance, and improving their skills and managerial capacity to grow. The Bank’s flagship Advice for Small Businesses programme offered advisory services by local or international industry experts to more than 450 SMEs across the region. Over 8,000 SMEs received support through training sessions, mentoring (including a newly introduced micro mentoring online platform) and other business development activities. The Bank continued expanding its start-up support initiative, Star Venture, by launching it in Tajikistan. As part of risk-sharing agreements with local banks, the EBRD provided financing to 25 high-growth-potential companies for €28 million.

The EBRD is the largest institutional investor in Central Asia. It has to date financed 1,163 green and inclusive projects for €21.5 billion.