Middle Corridor's growth to up Central Asian trade - EBRD regional head

EBRD regional head
Photo credit: EBRD

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.

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