The EDB signs a letter of intent to modernise the Kyrgyz Stock Exchange
Bishkek, 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.
The modernisation project aims to enhance the capacity of the Kyrgyz Stock Exchange and, consequently, the nation’s financial instruments market. It will involve modernising KSE’s IT infrastructure and trading system, thereby improving trading accessibility for international investors.
The EDB plans to provide a grant to KSE to modernise its infrastructure, which has not been updated since 2001. The project will explore the establishment of new trading sections for currency pairs and derivatives, as well as the expansion of infrastructure to boost trading volumes and the number of market participants. The planned source of financing for the project is the EDB’s Technical Assistance Fund (TAF).
“This agreement is important for the further development of KSE and Kyrgyzstan’s stock market as a whole. The Decree of the President of the Kyrgyz Republic On Measures for Further Developing the Stock Market and Exchange Activities states that priorities in developing the stock market include strengthening its institutional infrastructure, implementing digital technologies and expanding the range of financial instruments. In today’s exchange environment, using state-of-the-art technology is crucial in attracting investment, and any exchange would prioritise the strengthening of its technical capacity. A joint project by such reputable institutions will help to determine the market position of the exchange and bring it to a new level of digitalisation, contributing to the expansion of trading,” commented Medetbek Nazaraliev.
“This project will provide direct access to the stock exchange for financial institutions throughout Kyrgyzstan and integrate it with the trading platforms of EAEU countries, with the prospect of its development as one of the leaders of the exchange market ecosystem in Central Asia,” said Nikolai Podguzov.
This is not the EDB’s first project of this kind. In 2021–2022, the EDB TAF provided a grant to the Armenia Securities Exchange to modernise its processes and implement software for its new trading system. That project made the trading system accessible to end investors and ensured a 138% increase in the annual value of auctions for the placement and redemption of government securities and a 42% increase in the annual number of transactions in the same segment compared to 2019.
The KSE modernisation project is part of the Bank’s initiatives to develop financial markets in its member countries and implement the 2022–2026 Country Strategy for the Kyrgyz Republic.
Additional Information:
The Eurasian Development Bank (EDB) is a multilateral development bank investing in Eurasia. For more than 18 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals US $7 billion. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles in its operations.
The EDB Technical Assistance Fund (TAF) is a special fund helping to create enabling conditions for investment and development projects in the Bank’s member countries. The Fund operates to enhance the Bank’s ability to finance investment projects that are in line with its mission. The TAF supports potential borrowers at the project preparation stage as well as national governments and organisations whose projects promote the institutional environment, economic development and growth. The Fund is financed from the Bank’s net profit and donor funds.
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