The European Bank for Reconstruction and Development (EBRD) invested more than €1.2 billion (US$ 1.3 billion) in projects across Central Asia in 2023 to stimulate the region’s sustainable and inclusive growth, which is expected to continue at a pace of 5.9 per cent in 2024.
Last year the Bank financed more than 100 projects in sectors including renewable energy, small and medium-sized enterprise (SME) development, and sustainable infrastructure. More than 70 per cent of those projects were in the private sector and almost 60 per cent of investments were green. Collectively, these projects will mean that the region’s annual CO2 emissions are reduced by 1.87 million tonnes.
Uzbekistan remained the leading recipient of EBRD funding in the region for the fourth year running, by attracting more than €700 million (US$ 760 million). The remaining €518 million (US$ 560 million) were channelled to support projects in Kazakhstan, the Kyrgyz Republic, Mongolia and Tajikistan.
The EBRD continued rolling out its flagship programmes such as its Green Economy Financing Facilities (GEFFs), which are designed to develop green and innovative solutions, and its Green Cities programme, which tackles environmental challenges and encourages investment in municipal infrastructure. The Bank also addressed the issue of youth entrepreneurship and employment in Central Asia by launching a seven-year Youth in Business programme.
In Uzbekistan, the EBRD continued investing in renewable energy power generation and low-carbon technologies. It financed the construction of three greenfield solar power plants with total installed capacity of nearly 900 MW. The power plants were developed by Masdar, a global renewable and clean energy company. The Bank provided funds to ACWA Power Wind Karatau to finance the construction of a 100 MW wind power plant in the autonomous republic of Karakalpakstan. It also provided a sovereign loan to modernise 118 pumping stations and improve the sustainability of water supply for irrigation in the densely populated Fergana Valley. Samarkand became the first city in the country to join the EBRD Green Cities programme, and is planning to deploy ecologically friendly electric buses as part of this engagement. In the financial sector, the Bank continued working with local financial intermediaries such as SQB, Hamkorbank and Ipak Yuli Bank to support SMEs and promote green lending.
Highlights of the EBRD’s work in Kazakhstan include the launch of the GEFF Kazakhstan II and an investment in a local currency bond issued by the country’s transmission system operator, KEGOC. The funds will help make the country’s electrical grid more sustainable and reliable. The Bank’s loan to China Power International Holding and Visor International will be used to build, operate and connect the 100 MW Shokpar wind power plant to the transmission grid. The EBRD’s loan to Kazakhstan’s largest private rolling stock operator, Eastcomtrans, will help expand container-handling capacity at one of the most congested junctions near the city of Almaty and address the issue of bottlenecks along the Trans-Caspian corridor. Last year marked the completion of the street lighting system in Ust-Kamenogorsk (Oskemen), which allowed energy-efficient LED street lights to be installed on 150 streets. In the financial sector, the Bank extended a new loan to the country’s leading microlender KMF to support green lending and women’s entrepreneurship.
In Mongolia, the EBRD launched a new GEFF, which will help households and businesses employ green and innovative solutions for the efficient use of water, sustainable land management and greater resource efficiency. In partnership with the country’s leading financial institutions, Khan Bank and XacBank, the EBRD also promoted lending to SMEs and women entrepreneurs. The Bank supported the introduction of green affordable housing in Mongolia’s largest city, Ulaanbaatar, and the expansion of the GS25 convenience store franchise chain, helping to offer a new retail format to customers across the country.
In the Kyrgyz Republic, the EBRD pledged new funds under its Kyrgyz Water Resilience Framework to support the modernisation of water supply services in the Batken and Jalal-Abad oblasts. The Bank signed a number of sovereign projects aimed at modernising key transport and energy infrastructure, which will help improve the country’s connectivity and climate resilience. These projects included loans to (i) upgrade a 30 km section of the Issyk-Kul Lake ring road, (ii) increase the reliability of the national electricity transmission and distribution grid, and (iii) rehabilitate and modernise the Lebedinovskaya hydropower plant – the largest investment in the country’s hydropower sector in 20 years. The EBRD also completed the Bishkek landfill project last year, which will provide major environmental benefits for the more than one million people living in the country’s capital.
The completion of three infrastructure projects in Tajikistan allowed more than 400,000 people in 13 municipalities across the country to enjoy better access to clean and safe drinking water. Last year the EBRD launched the GEFF Tajikistan II and extended new GEFF loans to Bank Arvand and microlenders Humo and Imon International. With a joint base of more than 540,000 clients and operational even in remote mountainous parts of the country, these three institutions will help bring green finance to even the smallest borrowers in Tajikistan. The EBRD offered support to local retailers and agribusiness companies under a risk-sharing scheme with the country’s largest private lender, Bank Eskhata.