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The country strategy of the Eurasian Development Bank

Objective 1

Development of basic infrastructure for regional integration and sustainable development

Infrastructure projects in the Kyrgyz Republic will promote Eurasian integration and ensure that the country’s population has access to basic services in line with the sustainable development principles and mission and mandate of the EDB. In addition, national strategic documents identify infrastructure investment projects as among the most promising.

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Priority 1.1

Modernising and constructing hydroelectric facilities and grid infrastructure

Power shortages in neighbouring Central Asian countries makes the Kyrgyz Republic a potential exporter of clean electricity. This would boost public revenues and promote the sustainability and green credentials of its power sector regionwide. In addition, the EAEU integration agenda envisages the creation of a single “energy ring”, including investment projects in the Kyrgyz Republic. Between 2022 and 2026, the EDB will negotiate with the Kyrgyz government and international stakeholders regarding investment projects in hydropower and power transmission. To reduce the cost of borrowing for the Kyrgyz Republic, the EDB will arrange tied financing and leverage its Technical Assistance Fund to plan and structure complex projects, including through PPP mechanisms.

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Priority 1.2

Developing transport infrastructure to improve connectivity between the region’s countries

The development of the country’s road and rail networks, and the modernisation of its airports, should improve connectivity between the Bank’s member states. Developing transport corridors in the Kyrgyz Republic is critical for Eurasian integration since the country links Kazakhstan and Tajikistan, which are both EDB member states. The largest and most important transport corridor projects in the Kyrgyz Republic are CAREC-1 and CAREC-3, connecting Central Asian countries, and the national 433-km North–South alternative road project linking the country’s northern and southern regions. The national development strategy also identifies two projects to modernise Osh and Manas airports, though the required funding is not confirmed. To contribute to the development of transport infrastructure, the EDB plans to use its Technical Assistance Fund to plan and structure projects, participate in PPP initiatives and mobilise tied financing to reduce the cost of borrowing

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Priority 1.3

Ensuring access to water supply and sanitation

Sustainable development relies upon the Kyrgyz people having access to clean drinking water and sanitation. As part of its operations there, the EDB will communicate with public and local authorities and will actively cooperate with international institutions to identify financing options for municipal infrastructure projects, which will include regulatory and tariff assistance through the EEC and the EFSD.

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Objective 2

Economic diversification and developing private businesses

The EDB’s mission is to promote a market economy in its member countries. Economic diversification and entrepreneurship will reduce macroeconomic risks associated with the country’s exposure in the gold market and improve public revenues and macroeconomic stability.

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Priority 2.1

Supporting small and medium-sized enterprises and fostering cooperation in trade

Small and medium-sized businesses play a significant role in the country’s economy and household incomes and the EDB will continue to support entrepreneurship by providing targeted loan facilities to financial institutions. Promoting trade and other relationships with the Bank’s member states is an integral part of the EDB’s integration agenda in the Kyrgyz Republic. The growth of mutual trade in recent years has contributed to the development of a single economic space and boosted revenues within the country. Over this strategic period, the EDB will continue to promote private businesses and expand trade through targeted loan facilities.

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Priority 2.2

Developing tourism, including the building of hotels and recreational infrastructure

Tourism is another priority for the Kyrgyz government because of the capacity of this industry to mobilise additional investment in the country and create jobs. The tourism opportunities with the highest potential are beaches and recreation around Lake Issyk-Kul, skiing, mountaineering and rafting, and historical and cultural tourism. The coronavirus pandemic has affected tourism globally. Closed borders and restrictions in most countries create an additional opportunity to attract tourists. However, realising this potential would require significant investment in hotel and recreational infrastructure and the EDB could be a source of such funding.

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Priority 2.3

Promoting the establishment and development of manufacturing in the country

Establishing and modernising manufacturing enterprises will create jobs, increase productivity and diversify the economy. The National Development Strategy identifies 27 industrial development projects with confirmed funding and five projects without committed funding. Projects will focus on textiles and clothing, building materials, production of technology and technology parks. The Bank will also continue to examine potential projects in gold mining and the exploration of rare earth metals. Wide-ranging projects to develop mining, energy and metallurgical clusters with necessary infrastructure are also of interest. For the EDB, supporting industrial development involves assisting pre-project activities through its Technical Assistance Fund, mobilising cofinancing from development partners and investing in equit

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Objective 3

Agricultural development

is a strategic priority for the Eurasian Economic Union. The significant mutual trade in food products suggests that developing this sector will intensify integration, in line with the EDB’s mission and mandate. The Bank will also discuss joint project financing with relevant ministries in the Kyrgyz Republic, including those aiming to create vertically integrated agricultural clusters.

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Priority 3.1

Developing irrigation infrastructure

The lack of irrigation is a challenge for the agricultural sector, which employs 18% of the country’s workforce12. The construction of canals will help to expand arable land and pasture, thus increasing yields and mitigating the risk of drought. The National Development Strategy also identifies this as an investment target. As part of its Country Strategy, the EDB will consider financing relevant infrastructure projects, through its Technical Assistance Fund where necessary, and work with development partners to reduce borrowing costs and spread risk.

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Priority 3.2

Supporting agricultural processing enterprises

Agricultural processing in the Kyrgyz Republic will help to maintain the added value of end products within the country, increase export revenues and create jobs. This also contributes to the Country Strategy’s Objective 2 (economic diversification). In addition, the National Strategy of the Kyrgyz Republic includes projects to develop agricultural processing. The EDB will consider financing projects in this area through its Technical Assistance Fund or equity participation in relevant enterprises. The EDB will also continue to support the agricultural sector by extending targeted loan facilities to financial institutions to finance agriculture development programmes.

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Priority 3.3

Developing the commodity distribution network and establishing wholesale logistics centres

Setting up a network of wholesale distribution centres is integral to Eurasian integration, enabling expansion of mutual trade and ensuring food security in the region. This aim can be pursued effectively in the Kyrgyz Republic, where agriculture and the food industry are important sectors of the economy. Moreover, the Kyrgyz Republic is located between the two of the Bank’s member states. The list of projects included in the National Development Strategy also envisages the construction of logistics centres. During the 2022–2026 strategy period, the EDB will actively consider implementing key integration mega-projects, including the single commodity distribution network and the construction of wholesale distribution centres. The Bank will use its Technical Assistance Fund to structure and prepare relevant projects and engage development partners

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Objective 4

Digital transformation

The EDB will support its member states’ digital agendas to strengthen integration ties with Eurasian countries and foster their digital development.

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Priority 4.1

Supporting and participating in the development of digital solutions designed to strengthen integration ties and promote interoperability among the countries

The EDB will focus on promoting digital interoperability and greater integration between the countries, and on synergising the digital agendas of the countries in which it operates.

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Priority 4.2

Supporting governmental digital projects

Over this strategic period, the EDB will support public digital projects that promote integration between Eurasian countries and the digital transformation of the Kyrgyz Republic.

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Priority 4.3

Supporting digital projects in the corporate sector

The EDB will encourage the development of technology companies and support promising corporate digital projects.

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EDB Investment Portfolio

As of April 2024

9 projects in three sectors:
Financial sector

21 May 2024
The Eurasian Development Bank (EDB) and Bishkek Solar have signed a cooperation agreement to finance the construction of a 300 MW photovoltaic power station in Toru-Aigyr village, Issyk-Kul Region, Kyrgyz Republic. The signing ceremony took place on 21 May in Bishkek, Kyrgyzstan.
21 May 2024
The Eurasian Development Bank (EDB), the Financial Credit Fund under the Ministry of Finance of the Kyrgyz Republic (FCF), the Russian-Kyrgyz Development Fund (RKDF) and the Kyrgyz Stock Exchange (KSE) have signed a letter of intent to implement a technical assistance project aimed at modernising the stock exchange in Kyrgyzstan. The document was signed by Eldiyar Doolbekov, Chairman of the FCF; Denis Ilin, Senior Managing Director at the EDB; Oleg Kudyakov, Deputy Chairman of the Board at the RKDF; and Medetbek Nazaraliev, President of KSE.
21 May 2024
Nikolai Podguzov, Chairman of the Management Board at the Eurasian Development Bank (EDB), met with Almaz Baketaev, Minister of Finance and Plenipotentiary Representative of the Kyrgyz Republic in the EDB Council. The Chairman of the EDB Management Board noted that the Bank’s investment portfolio in the Kyrgyz Republic demonstrated significant growth in 2023.
16 April 2024
The petrochemical industry is a high-tech sector with a significant multiplier effect. It produces four out of every five items commonly used by people today. Currently, the industry is undergoing global structural changes, presenting significant opportunities for Eurasian economies. The Bank’s latest report titled Eurasian Petrochemical Industry: Opportunities for Deeper Processing outlines blocks of priority measures to unlock available potential. These include a clustering policy, additional focus on low-tonnage petrochemical production, and the implementation of circular production mechanisms. Unleashing the Eurasian region’s potential will make the petrochemical industry an effective way to address “path dependence” by enhancing process stages, promoting technological advancements and securing a foothold in the global division of labour.
12 April 2024
The Eurasian Development Bank (EDB) has released its latest Macroeconomic Review for the Bank’s six member states.
20 March 2024
The Eurasian Development Bank (EDB) has released a report titled Infrastructure in Eurasia: Short- Term and Medium-Term Trends. Eurasian countries  have incorporated the United Nations Sustainable Development Goals (SDGs) into their economic policies. However, their achievement is impeded by the significant deficit and high wear and tear of infrastructure. Transportation, logistics, energy, telecommunications, water supply and wastewater infrastructure suffers from inadequate investment. Rapid urbanisation, the active adoption of new technologies and climate change are driving new requirements for infrastructural development. The directions of trade flows are shifting, leading to the creation of new transportation corridors and energy links.
16 February 2024
The Eurasian Development Bank (EDB) has released the latest Macroeconomic Review for its six member states. This regular publication provides a roundup of the macroeconomic situation and projects near-term developments in the member countries. The review also contains detailed statistics on key macroeconomic indicators.
02 February 2024
Tigran Sargsyan, Vice Chairman of the Eurasian Development Bank’s (EDB) Management Board, met with Nuria Kutnaeva, the Kyrgyz Republic’s Minister of Digital Development, during the Digital Almaty 2024 Forum.
12 January 2024
Starting 27 December 2023, the “Work in the EAEU” mobile app, developed by the Eurasian Development Bank’s Fund for Digital Initiatives, has incorporated public and commercial services for labour migrants in the Kyrgyz Republic. This development enables citizens of Armenia, Belarus, Kazakhstan, Russia and Tajikistan moving to work in the Kyrgyz Republic to access the services necessary for their employment conveniently through their smartphones. The app also offers services for Armenia and Russia.
16 November 2023
In the summer of 2023, Central Asia was faced once again with water shortages and the significant impact these have on agriculture. The sector relies on irrigation, consuming up to 80% of available water, and has a poor track record with regard to the efficient use of water resources. The irrigation infrastructure is over 50 years old. More than half of all irrigated land has become salinised and 40% of water is lost through irrigation canals. A new EDB study entitled “Efficient Irrigation and Water Conservation in Central Asia” outlines ten practical steps for preserving irrigated land potential and promoting water conservation. The list includes four recommendations for adoption at the regional level and six at the national level. The measures are designed to save enough water each year to support sustainable development. Implementing the measures will require collaboration between governments, farmers and multilateral development institutions. The need for urgent action is intensified by the anticipated reduction in the flow of the Amu Darya River

Bishkek Representative Office

21 Erkindik Blvd., Bishkek, 720040, Kyrgyz Republic

Outlook for the key macroeconomic indicators as of December 2023

GDP growth
The economy will be supported by high investment activity. We expect an increase in turnover in the industrial sector and an increase in exports.
Year-end inflation
Inflation will slow down following a decline in world prices on commodity markets
Seven-day REPO rate, year’s average
The round of interest rate cuts could start in second half of 2024 as inflationary pressures ease
KGS/USD exchange rate, year’s average
Decrease in net inflow of remittances