BAKU, Azerbaijan, June 14. The Middle
Corridor’s expansion and modernization will have a substantial
impact on regional commerce in Central Asia, Regional Head of
Kyrgyzstan, Tajikistan and Turkmenistan for the European Bank for
Reconstruction and Development (EBRD), Ayten Rustamova told
Trend in an
exclusive interview.
“To supplement the Eurasian Northern Corridor, a research
released in June 2023 by the EBRD suggests that the Trans-Caspian
Corridor—which will unite Central Asian nations—may be the optimal
route for freight transportation. Regional trade within Central
Asia, including Turkmenistan, will greatly benefit from the
upgrading and expansion of this transport corridor. We believe that
Turkmenistan should be part of this undertaking. Our bank is
discussing possible infrastructure projects related to the
Trans-Caspian Corridor with the authorities of Turkmenistan,” she
said.
The EBRD revealed that the report has identified the following
investment needs for Turkmenistan: developing a logistics center at
the Turkmenistan-Kazakh border (46 million euros), the
Turkmenbashi-Karabogaz (border with Kazakhstan) road rehabilitation
project (51 million euros), the
Turkmenbashi-Gyzylgaya-Konye-Urgench road rehabilitation and
reconstruction project (291 million euros), as well as an increase
in the capacity of the Uzen-Bolashak-Bereket line (564 million
euros).
“Our bank stated its readiness to invest around 1.2 billion
euros in the Trans-Caspian Corridor related infrastructure and
associated transport solutions over the next 2–3 years. We have
already invested in a number of transport infrastructure projects,
such as a sovereign loan of 44.2 million euros for the
reconstruction of a 30 km (Balbay Batyr-Karakol) section of the
Issyk-Kul Lake ring road in Kyrgyzstan. As part of the
Trans-Caspian Corridor, the upgraded road will improve the
country’s transit potential and regional connectivity,” she
said.
The initiative will help lower annual CO₂ emissions by 16,000
tons by 2050, according to Rustamova, with funding from the
Türkiye-EBRD Cooperation Fund.
“We would also like to mention the financial package of up to 11
million euros to the Kyrgyz Railways national company (Kyrgyz Temir
Jolu, or KTJ) organized by the EBRD. It consists of a 12-year
sovereign loan of 8 million euros and a 3 million euro grant
provided by the EBRD Shareholder Special Fund. The funds will allow
KTJ to replace its obsolete open-railcar rolling stock for the
transportation of construction materials and agricultural produce,”
she said.
The regional head highlighted that the KTJ plans to allocate
funds towards the restoration of vital railway infrastructure,
including the avalanche protection gallery in the Boom gorge.
“In a wider Central Asia region, we are exploring a number of
public-private partnership initiatives and sustainable
infrastructure projects, that will contribute to the fluidity of
cargo traffic across the country and along the Trans-Caspian
route,” she added.
Moreover, she mentioned that Mark Bowman, the Vice President for
Policy and Partnerships at the EBRD, recently visited Turkmenistan
in March 2024 and met with the country’s president, Serdar
Berdimuhamedov.
“This was the first visit of a high-ranking EBRD official to the
country since 2019. Our Bank expressed its readiness to re-engage
with Turkmenistan’s private sector not only through advisory
projects but also through lending to companies. Historically, the
EBRD has a lot of experience working with local private businesses
in Turkmenistan, and we are eager to reengage and expand this
cooperation. The EBRD would also be interested in exploring other
areas for cooperation, such as water management, green energy,
transport connectivity, and work through financial intermediaries.
The Bank can use its experience and resources to support bankable
projects, that could address the issue of water scarcity in
Turkmenistan. It stands ready to explore the country’s potential
for the development of renewable energy and tap into the positive
experience we have in this field in the neighbouring countries of
Central Asia,” Rustamova added.
Additionally, she mentioned that the EBRD re-engaged with
Kyrgyzstan’s energy sector last year, leading to initiatives that
will enhance the country’s ability to withstand climate change.
“Last year we had the highest operational result in Kyrgyzstan
over the last 5 years, and I am very proud. 67 percent of our
projects were in the private sector, and almost 40 percent of these
investments were green. In fact, it is our ambition to become a
majority green bank by 2025. We played a role in fostering
inclusive employment opportunities, supporting innovative
entrepreneurial endeavors, and advancing climate-resilient
technologies within the country. It would be fair to say that we
have an ongoing and fruitful dialogue with the national
authorities, which translates into increased public sector
lending,” she said.
The bank’s largest hydropower investment in 20 years, the
regional head said, was a loan to improve the national electricity
transmission and distribution grid and a loan to restore and
modernize the Lebedinovskaya hydropower plant.
“The EBRD also pledged new funds to support the modernization of
water supply services in the Batken and Jalal Abad regions of
Kyrgyzstan in the context of its Kyrgyz Water Sector Resilience
Framework. Our bank also signed a sovereign loan to upgrade a
30-kilometer section of the Issyk-Kul Lake Ring Road. The project
will help modernize key transport infrastructure, which will help
improve the country’s connectivity and tourism potential in the
Issyk-Kul area,” Rustamova said.
She mentioned that in 2023, the EBRD also wrapped up the Bishkek
landfill project, bringing significant environmental advantages to
over one million residents in Kyrgyzstan’s capital.
“Finally, we continued rolling out our flagship programmes such
as the Green Economy Financing Facility, designed to support green
and innovative solutions, and Green Cities, helping to tackle
environmental challenges and encouraging investment in municipal
infrastructure. The Bank also launched a seven-year Youth in
Business programme to help youth entrepreneurs and address the
issue of employment in Central Asia and Kyrgyzstan,” Rustamova
said.
She further pointed out that last year, the EBRD marked 30 years
of operations in Tajikistan.
“Over these years, we have enjoyed excellent cooperation with
the authorities, both central and regional, and the business
community. This allowed us to invest nearly 990 million euros in
almost 170 projects in Tajikistan during this period. Our funds
have supported good entrepreneurial initiative and essential
upgrades in various sectors ranging from energy, water, and
transport to banking and small and medium-sized enterprises (SMEs).
Our activity in Tajikistan rests on the country strategy approved
in 2020 and developed jointly with the government. It is helping to
boost the resilience, modernization, and regional integration of
the national economy. We have also started country diagnostics in
preparation for a new country strategy,” she said.
The regional head noted that during the visit of EBRD President
Odile Renaud-Basso to Tajikistan in late April, a memorandum of
understanding was signed between the EBRD and the National Bank of
Tajikistan to develop the Women Entrepreneurs Finance Code (WE
Finance Code).
“This is a commitment by providers of financial services,
regulators, development banks, and other stakeholders to jointly
increase financial assistance to women-led micro, small, and medium
enterprises. Most recently, at the Bank’s Annual Meeting, the EBRD
signed deals collectively worth $15 million with Tajikistan’s bank
Arvand and the microlender HUMO. They will use funds to promote
green lending and support women and youth entrepreneurship in
Tajikistan,” she said.
Talking about cooperation in agriculture, she pointed out that
for almost a decade, the EBRD and the EU worked together on the
Enhanced Competitiveness of Tajik Agribusiness Programme.
“It was successfully completed in May 2023 and contributed to
the competitiveness and sustainability of Tajikistan’s agribusiness
sector, which employs around half of the country’s able population.
The EBRD channelled over $24.5 million to over 1,220 farmers across
Tajikistan. These loans were provided both directly and through the
EBRD partner banks and supported by EU grants worth 5.65 million
euros,” she said.
Rustamova pointed out that investments greased the wheels for
acquiring cutting-edge tractors, state-of-the-art irrigation
systems, top-notch cold storage units, high-tech greenhouses,
streamlined poultry production lines, and advanced agriculture
processing machinery.
“We are very proud of this experience and look forward to
implementing more similar programmes in the future. The EBRD is
also sharing risk on loans provided by domestic lenders to local
agribusiness producers. For example, we shared half of the risk on
the loan extended by Bank Eskhata to leading vegetable grower MMK
AGRO,” the regional head added.
She went on to say that the EBRD has recently promised extra
funding to make Tajikistan’s power supply more stable and
long-lasting by setting up a credit line of up to 31 million euros
for the country’s transmission network operator, Shabaqahoi
Intiqoli Barq.
“The facility consists of two EBRD sovereign loans totaling up
to 23 million euros and an investment grant of up to 8 million
euros. The funds will help rehabilitate the existing transformer
and construct a new one at the Sugd-500 substation in the north of
the country. The project will also be supported by an investment
grant of up to 2 million euros from the Sustainable Infrastructure
Fund,” she said.
Rustamova added that this project builds on the success of the
EBRD’s recently completed Sugd energy loss-reduction project, which
demonstrated the effectiveness of modern metering and billing
systems by cutting network losses in the region’s main city of
Khujand from 27 percent to 10 percent and by improving payment
collections to nearly 100 percent.
“Supported by grant funds from the Sustainable Infrastructure
Fund and the Japan-EBRD Cooperation Fund, this project is expected
to bring significant environmental benefits to the Sugd region,
such as an annual reduction in CO2 emissions of 129,000
tonnes. It will also help to ensure the smooth introduction to the
grid of pilot renewable energy projects in the Sugd region,” she
said.
The regional head also highlighted the Qairokkum HPP
rehabilitation project, where the EBRD mobilised concessional
financing from Climate Investment Funds and the Green Climate Fund
to finance the modernisation of a 60-year-old hydropower plant that
provides electricity to almost 500,000 people
Lastly, when discussing the EBRD’s medium-term plans, she said
the Kyrgyzstan EBRD country strategy, adopted in 2019, focuses on:
fostering sustainable growth by strengthening regional cross-border
linkages; enabling SMEs to scale-up and bolster competitiveness;
and promoting sustainability of public utilities through
commercialisation and private sector participation.
“Our next five-year plan is also now under development,” she
said.
Moreover, activity of the bank in Tajikistan rests on the
country strategy approved in 2020 and developed jointly with the
government. It is aimed at helping to boost the resilience,
modernisation, digitalisation and regional integration of the
national economy.
“Turkmenistan is refocusing its efforts on the private sector,
infrastructure, water, and renewable energy,” Rustamova
concluded.
