The EDB's next frontier: Uzbekistan and the future of Central Asian integration

For much of the past decade, Uzbekistan's economic story has been one of domestic transformation. The government liberalised the currency, opened previously closed sectors to foreign investment, modernised state institutions, reduced trade barriers and launched one of the region's most ambitious privatisation programmes.

Those reforms reshaped international perceptions of the country, transforming Uzbekistan from one of Central Asia's most closed economies into one of its fastest-growing investment destinations.

The question now is no longer whether Uzbekistan can attract foreign capital. Instead, policymakers are increasingly focused on a more ambitious objective: positioning the country as one of Eurasia's principal economic hubs, linking production, trade, investment, energy and technology across a region stretching from China to Europe.

That shift was evident throughout the Eurasian Development Bank's (EDB's) Annual Meeting and Business Forum, held in Almaty on June 25-26 under the theme Eurasia 2030+: Investments, Growth and New Opportunities. 

While delegates from the bank's seven member states discussed regional integration, infrastructure, industrial cooperation and digital transformation, Uzbekistan consistently emerged as one of the forum's central themes.

Only a year after becoming the EDB's seventh shareholder, Uzbekistan has quickly become one of the institution's strategic priorities. Discussions repeatedly returned to the country's growing role in regional transport corridors, manufacturing, renewable energy, artificial intelligence and cross-border investment.

For the bank, Uzbekistan is no longer simply another recipient of development finance. It is increasingly viewed as one of the principal drivers of Eurasia's next phase of economic integration.

"Uzbekistan has taken a central position in our bank," EDB chairman Nikolai Podguzov said during the forum. "It is the third shareholder, with a 10% stake."

The bank expects to invest between $1.5bn and $2bn in Uzbekistan over the medium term. The first projects, worth several hundred million dollars, have already received approval, reflecting both the country's growing economic weight and the EDB's broader shift toward financing projects that strengthen regional connectivity.

Twenty years of financing regional integration

This year's forum coincided with the EDB's twentieth anniversary. Established in 2006, the multilateral lender was created to finance projects that promote economic integration across Eurasia. Over the past two decades, it has evolved into one of Central Asia's largest development finance institutions, supporting investments in transport, energy, industry, agriculture and digital infrastructure.

By the end of 2025, the bank's cumulative portfolio had reached 326 projects worth $19.6bn. Including co-financing from partner institutions, total investment mobilised exceeded $64bn.

Transport, energy and industrial development continue to account for the largest share of investments, while green financing has become an increasingly important pillar of the portfolio. In 2025 alone, the bank invested $2.6bn, with green projects expanding 17% to reach $1bn. Its Technical Assistance Fund and Digital Initiatives Fund also allocated a combined $40mn to projects ranging from artificial intelligence and water conservation to digital transformation.

The bank is now preparing for its next phase of expansion. Its current five-year strategy, originally targeting $10.9bn in investments between 2022 and 2026, is expected to surpass expectations with cumulative investments projected at $12.2bn.

Member states have therefore approved a new 2027-2031 Development Strategy, centred on three priorities: expanding transport and logistics infrastructure, financing higher-value industrial production and mobilising international capital for cross-border projects.

A region growing faster than the global economy

Opening the plenary session, Podguzov argued that Eurasia remains one of the world's fastest-growing economic regions.

"The economies of EDB member states and Central Asian countries have consistently grown faster than the global average," he said.

Sustaining that momentum, however, will require more than strong GDP growth. According to Podguzov, governments must combine economic expansion with technological modernisation, regional integration and improvements in living standards.

"It is essential to maintain high rates of economic growth while ensuring they directly improve people's quality of life," he said. "Equally important is the ability to rapidly adapt to new technological realities."

Russian Deputy Finance Minister Ivan Chebeskov noted that the global economy is undergoing structural changes that are reshaping trade, investment and technology.

Supply chains are being reorganised. Technology ecosystems are becoming increasingly fragmented. Regions capable of building diversified transport networks and stronger industrial bases, he argued, will be better positioned to benefit.

"We are not merely adapting to these global changes," Chebeskov said. "We are already taking concrete steps to transform today's opportunities into long-term competitive advantages."

The figures presented during the forum suggest the region has maintained that momentum. According to Chebeskov, the combined GDP of EDB member states has increased by 50% over the past five years. In 2026, their economies expanded by approximately 6.5%, while combined GDP exceeded $600bn, making Eurasia one of the world's fastest-growing regional blocs.

Different paths toward the same objective

The experiences of Kazakhstan and Kyrgyzstan illustrated how governments across the region are pursuing that growth through different strategies.

Kazakhstan, the EDB's largest investment destination, is seeking to convert record foreign investment into long-term competitiveness. Finance Minister Madi Takiyev highlighted that the country attracted $43.5bn in foreign direct investment while implementing reforms designed to strengthen investor protection, expand tax incentives and improve the business climate. At the same time, Kazakhstan is investing heavily in transport infrastructure, artificial intelligence and logistics to reinforce its position as a Eurasian transit hub.

Kyrgyzstan, meanwhile, has focused on rapid domestic expansion. Economy and Commerce Minister Bakyt Sydykov noted that the economy grew by an average of around 10% annually between 2021 and 2025, with GDP rising 12.2% during the first five months of 2026. Sustaining annual growth of 8-9% through 2030 remains one of the government's principal objectives.

Yet despite their different approaches, officials from both countries emphasised a similar conclusion: the next stage of development will depend less on attracting capital alone than on preparing projects capable of securing international financing.

"Our partners are capable not only of providing financing," Sydykov said, "but also of serving as catalysts for structural transformation and, most importantly, regional integration."

He argued that competition among countries is changing. "Competition among regions will not be limited to attracting capital," Sydykov said. "It will also be a competition for high-quality ideas and well-prepared projects. Capital flows where there are strong initiatives, transparent procedures, professional teams and effective implementation mechanisms."

Uzbekistan moves from participant to regional driver

Throughout the forum, officials repeatedly described Uzbekistan not simply as a recipient of development finance but as an increasingly important link connecting Central Asia with Europe, China, South Asia and the Middle East.

That transformation reflects broader changes in Uzbekistan's economy. During the past decade, reforms focused on liberalising markets and attracting foreign investment. Today, policymakers are placing greater emphasis on using that investment to build industries, strengthen regional supply chains and position Uzbekistan as a manufacturing and logistics hub.

Speaking during the plenary session, Deputy Minister of Investment, Industry and Trade Khurram Teshabaev said economic cooperation with Eurasian partners has become one of the fastest-growing components of Uzbekistan's foreign economic policy.

The portfolio of joint investment projects between Uzbekistan and member states of the Eurasian Economic Union (EAEU) now exceeds $50bn, covering manufacturing, transport infrastructure, energy, logistics, mining, agriculture and the digital economy.

Trade has expanded just as rapidly. Over the past five years, Uzbekistan's trade turnover with EAEU member states has more than doubled from $9bn to $20bn, with the bloc now accounting for nearly one-quarter of the country's total foreign trade.

For Teshabaev, however, the significance extends well beyond trade volumes. "The main effect today is not simply the growth of mutual trade," he said. "It is the development of interregional industrial cooperation, where countries combine technologies, production capacities and logistics."

His remarks reflected a broader shift in Uzbekistan's development strategy. Rather than viewing foreign investment as an objective in itself, the government increasingly sees it as a means of integrating domestic manufacturers into regional value chains capable of producing higher-value goods for larger international markets.

"We're building Uzbekistan's economic development by combining private investment, international financing and modern technology," Teshabaev said.

Development banks play a larger role

That approach has also changed the way Uzbekistan works with international financial institutions.

According to Teshabaev, development banks are no longer valued solely for the financing they provide. Equally important are the international standards, engineering expertise, governance practises and project preparation capabilities they bring to large infrastructure projects.

"International development banks contribute not only financial resources but also international standards and the expertise needed to implement major cross-border projects," he said.

The growing complexity of infrastructure investment helps explain why Uzbekistan has expanded cooperation with institutions including the Eurasian Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and other multilateral lenders.

Major transport corridors, industrial projects and energy infrastructure increasingly require multiple financing partners, technical advisers and cross-border coordination. Rather than replacing public investment, international financing is increasingly being used to accelerate projects that governments could not easily deliver alone.

Four priorities shaping the next phase of growth

Teshabaev outlined four sectors that will define Uzbekistan's next phase of economic development and where the government expects closer cooperation with the EDB.

Transport remains the country's largest strategic priority. As global supply chains continue to diversify, Uzbekistan is seeking to strengthen its position as the shortest overland route linking Central Asia with South Asia, Europe and the Middle East.

Officials identified several projects where additional development-bank financing could play a significant role, including the Trans-Afghan Transport Corridor, the Middle Corridor and the International North-South Transport Corridor.

Rather than competing with one another, these routes are intended to create a more resilient transport network capable of supporting growing trade across Eurasia. For a double-landlocked country, geography is increasingly being viewed not as a limitation but as a competitive advantage.

The government's second priority is industrial development. Uzbekistan is seeking to move beyond exporting raw materials by expanding higher-value manufacturing and deeper processing of domestic resources.

Officials hope greater investment in joint production facilities and localised manufacturing will integrate Uzbek companies into regional supply chains while improving their competitiveness in international markets.

The strategy closely aligns with the EDB's own objective of financing higher-value industrial production under its new 2027–2031 development strategy.

Energy remains another cornerstone of Uzbekistan's investment agenda. According to Teshabaev, the country has attracted more than $19bn into the energy sector over the past five years, allowing it to commission more than 17 gigawatts of new generating capacity.

While renewable energy continues to receive significant investment, officials are also prioritising electricity storage, transmission infrastructure and improvements to grid reliability to support rapid industrial growth.

Among the region's largest joint initiatives is the Kambarata Hydropower Plant-1, being developed together with Kazakhstan and Kyrgyzstan to strengthen regional electricity security.

The fourth priority is digital infrastructure. Uzbekistan is expanding investment in artificial intelligence, cloud computing, data centres and digital services while increasing the number of specialists capable of supporting the country's growing technology sector.

Officials also highlighted cross-border e-commerce as an emerging area requiring greater regional cooperation.

Rather than treating artificial intelligence as a separate industry, policymakers increasingly view it as an enabling technology capable of improving manufacturing, logistics, transport management and public administration.

That approach closely mirrors the EDB's own investment philosophy. Its Digital Initiatives Fund now supports the digital components of many infrastructure projects.

Forum participants also acknowledged that renewable energy alone is unlikely to satisfy the region's rapidly growing electricity needs.

The Eurasian Development Bank confirmed that it is prepared to consider financing peaceful nuclear energy projects where member states choose to pursue them. Although nuclear power requires substantial upfront investment, officials argued that it provides stable, low-carbon electricity capable of supporting industrial development over several decades.

Rather than presenting renewable and nuclear energy as competing technologies, discussions reflected a more pragmatic approach. Governments increasingly see diversified energy systems as essential for maintaining both energy security and long-term economic competitiveness.

Turning strategy into implementation

On the sidelines of the forum, the Eurasian Development Bank and the Eurasian Economic Commission signed a new memorandum of cooperation aimed at expanding collaboration in industrial production, agriculture, exports, information technology and artificial intelligence. The agreement updates a framework that had remained largely unchanged for more than a decade.

"We are rebooting our cooperation with the Eurasian Economic Commission," Podguzov said after the signing. "The previous memorandum was signed more than ten years ago and today we need new tools that reflect modern challenges."

For Uzbekistan, whose economic strategy increasingly depends on regional production networks and cross-border investment, the agreement provides another mechanism for supporting industrial cooperation beyond national borders.

Yet throughout the forum, officials repeatedly returned to one conclusion. Investment strategies, industrial policies and regional agreements can create opportunities, but they cannot by themselves move goods across borders.

As trade expands and factories produce more, the success of Uzbekistan's next phase of development will depend on whether transport infrastructure can keep pace. That challenge would dominate one of the forum's most consequential discussions, where officials argued that logistics — not capital — may become the country's biggest constraint on future growth.

The race to keep trade moving

If investment and industrial policy define Uzbekistan's long-term ambitions, transport infrastructure will determine whether those ambitions can be realised.

Throughout the forum, one message emerged repeatedly: Central Asia's economies are expanding faster than the roads, railways, border crossings and logistics networks needed to support them.

For Uzbekistan, that imbalance has become one of the country's biggest economic challenges. Production is increasing. Trade is growing. New factories are opening and foreign investment continues to flow into manufacturing and energy. Yet moving goods across borders remains slower, more expensive and more complicated than policymakers would like.

"Our capability to produce and export has really increased over the last five years," said Jasurbek Choriev, Uzbekistan's deputy minister of transport and secretary general of the Transport Corridor Europe-Caucasus-Asia (TRACECA). "At the same time, we see restrictions in terms of border crossings, quotas and carrying capacity."

His assessment contrasted with the generally optimistic tone of the forum. Rather than describing infrastructure as a future priority, Choriev argued that transport capacity has already become one of the principal constraints on economic growth.

"To be honest, we are behind in transport infrastructure," he said.

Changing trade routes

A decade ago, Europe accounted for around 12% of the country's trade. Today, that figure has risen to approximately 28%, reflecting a significant reorientation of commercial links beyond traditional markets.

The transformation extends across Central Asia. According to Choriev, trade between the region and the European Union has reached approximately €56bn, roughly three times higher than a decade ago.

At the same time, trade with China, South Asia and the Middle East has continued to expand, increasing demand for transport corridors capable of serving multiple markets rather than a single direction of trade. 

"We will need more infrastructure," Choriev said. "We will need more carrying capacity."

That means not only new roads and railways, but also additional freight waggons, trucks, logistics terminals and modern border facilities capable of handling rapidly rising cargo volumes.

For Uzbekistan, transport corridors are no longer viewed simply as transit routes. They are increasingly seen as strategic economic assets capable of reshaping the country's role in regional trade.

Officials identified three corridors as particularly important. The Middle Corridor continues to gain importance as companies seek alternatives to traditional Eurasian transport routes. Linking China and Central Asia with Europe through the Caspian Sea, it has become an increasingly attractive option for exporters seeking greater flexibility.

The International North-South Transport Corridor offers improved access to markets in South Asia and the Gulf while strengthening links between Central Asia, the Caucasus and the Indian Ocean.

Meanwhile, the proposed Trans-Afghan Transport Corridor could provide Central Asia with direct access to Pakistani ports, significantly shortening transport routes to global maritime markets.

Rather than competing with one another, officials increasingly view these corridors as complementary components of a more diversified Eurasian logistics network.

Among the projects discussed in Almaty, none attracted greater attention than the China-Kyrgyzstan-Uzbekistan railway. Long considered one of Central Asia's most ambitious infrastructure projects, the railway promises to establish a direct rail connection between western China and Uzbekistan through Kyrgyzstan, reducing transport times and creating new links between Asian manufacturers and European markets.

"It will attract additional cargo volumes," Choriev said. "It will not be something that we will be pulling apart from the existing line." He argued, the railway will stimulate entirely new trade by making transport faster and more efficient.

Combined with the Middle Corridor and the International North-South Transport Corridor, it is expected to form part of a broader network connecting Central Asia with Europe, China, South Asia and the Middle East.

Removing administrative barriers

Building new transport links alone will not solve every challenge. Choriev argued that administrative obstacles increasingly limit exporters as much as physical infrastructure. One example is the shortage of international trucking permits available for shipments to Europe.

Although Uzbekistan benefits from the European Union's GSP+ trade preference scheme, road transport remains constrained by quota systems that limit the number of vehicles permitted to operate across certain routes.

"We want to export more into the European markets," Choriev said. "Unfortunately, there is not enough quota provided for land transport."

The issue highlights an increasingly important reality for Central Asian exporters. Lower tariffs alone are no longer enough. Competitiveness increasingly depends on efficient customs procedures, transport regulation and cross-border coordination.

To address those challenges, Uzbekistan and neighbouring countries are expanding border crossings while introducing digital customs systems capable of recognising electronic documentation, including certification and sanitary permits.

The objective is to reduce waiting times, lower transport costs and improve the reliability of international supply chains.

Financing the logistics transformation

Expanding transport infrastructure across Eurasia will require investment on a scale that governments cannot provide alone. Development finance institutions are therefore expected to play an increasingly important role.

"Banks play a role in all projects," Choriev said. "Governments currently cannot allocate sufficient funds to develop across all sectors."

International financial institutions are already financing many of Uzbekistan's largest transport projects. The Asian Development Bank remains one of the country's principal transport-sector partners. The European Bank for Reconstruction and Development recently signed an $85mn agreement supporting the digitalisation of Uzbekistan's railway system.

China's Exim Bank is financing major components of the approximately $4bn China-Kyrgyzstan-Uzbekistan railway, alongside funding provided to participating construction companies. Korean Eximbank is also supporting the procurement of new electric trains as Uzbekistan continues modernising its railway network.

Together, those investments extend beyond individual projects. They are helping create the infrastructure needed to support a more integrated regional economy.

The overlooked bottleneck

Transport infrastructure does not end at railways or highways. Once goods cross the border, they still require modern logistics facilities capable of storing, processing and distributing cargo efficiently.

According to Alexey Skatin, deputy chairman of the EDB management board, Uzbekistan currently requires around 500,000 square metres of additional warehouse space.

Existing facilities are operating at virtually full capacity. Recognising that shortage, the EDB signed an agreement during the forum with Griffin Partners to support the development of modern logistics infrastructure. Their first joint project, Griffin Logopark Almaty, will create a 125,478-square-metre Class A+ logistics complex with an investment of approximately $125mn.

Although located in Kazakhstan, officials expect similar investments to become increasingly necessary across Central Asia as regional trade continues to expand. Modern warehouses, once viewed as supporting infrastructure, are becoming strategic assets in their own right.

A logistics hub by 2030

For Choriev, Uzbekistan's ambitions extend beyond building more roads and railways. 

"With digital integration, Uzbekistan can be one of the central hubs for transport logistics by 2030," he said.

Achieving that objective will require continued investment, closer regional cooperation and more efficient customs procedures. It will also depend on whether infrastructure can keep pace with the country's rapidly expanding industrial base.

For much of the past decade, Uzbekistan's economic transformation has focused on attracting investment and increasing production.

The next phase will depend on ensuring that factories, industrial parks and exporters remain connected to global markets through transport systems capable of moving goods quickly, efficiently and at competitive cost.

Yet logistics is only one part of the equation. As manufacturing expands and digital industries grow, another challenge is becoming equally important: securing the energy, water and technological infrastructure needed to support the country's next stage of economic development.

Water becomes an economic issue

Another topic gaining increasing attention was water security. Climate change, population growth and expanding agricultural production are placing mounting pressure on Central Asia's limited water resources.

Officials argued that water should no longer be viewed solely as an environmental concern. It has become an economic one. Agriculture currently consumes around 90% of the region's available water resources.

According to the EDB, greater use of precision agriculture, smart irrigation systems and modern water-management technologies could improve water-use efficiency by as much as 40%.

For Uzbekistan, where agriculture remains an important contributor to employment and exports, improving irrigation is becoming essential not only for food security but also for sustaining long-term economic growth.

Development banks increasingly regard such projects as investments capable of delivering measurable economic returns while strengthening climate resilience.

Digital infrastructure moves to the centre of development

If transport corridors formed the backbone of twentieth-century economic development, participants argued that digital infrastructure will play a similar role in the decades ahead.

Artificial intelligence emerged as one of the forum's most frequently discussed themes. But rather than focusing solely on software, officials emphasised the physical infrastructure needed to support AI-driven economies. That includes hyperscale data centres, cloud computing facilities, fibre-optic networks, cybersecurity systems and digital public infrastructure.

Uzbekistan has identified artificial intelligence as one of its long-term development priorities. Government programmes aim to expand AI applications across manufacturing, healthcare, education, transport and public administration while encouraging investment in digital infrastructure.

Officials also see cross-border e-commerce as an increasingly important driver of regional trade, requiring closer cooperation in both logistics and digital systems.

Rather than treating artificial intelligence as a separate industry, policymakers increasingly view it as a technology capable of improving productivity across virtually every sector of the economy.

That philosophy closely mirrors the Eurasian Development Bank's own approach. Through its Digital Initiatives Fund, the bank is integrating digital technologies into transport, agriculture, water management and industrial projects rather than financing them as standalone investments.

Digitalisation is no longer viewed as a separate policy area. It has become an integral part of almost every major infrastructure project.

Investing beyond infrastructure

The discussions in Almaty also highlighted how development banks are expanding their role beyond traditional project finance.

Alongside loans for transport, energy and industrial projects, the EDB signed a series of agreements focused on strengthening institutional capacity across the region.

These included a memorandum with the United Nations Population Fund (UNFPA) on demographic resilience and human capital development, an agreement with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) to support the expansion of Islamic finance and a partnership with Almaty Management University to strengthen executive education and public-sector leadership. Additional agreements covered logistics, agriculture and industrial cooperation. 

Multilateral institutions are increasingly expected to provide not only capital but also technical expertise, governance standards, policy advice and project preparation. For countries such as Uzbekistan, those capabilities may prove just as valuable as financing itself.

As EDB deputy chairman Alexey Skatin noted during the forum, long-term development increasingly depends on understanding demographic trends, labour markets and human capital alongside traditional economic indicators.

From reform to regional influence

Throughout the Eurasian Development Bank's Annual Meeting, officials repeatedly returned to a different question: how can Central Asia translate economic growth into deeper regional integration and long-term competitiveness?

For Uzbekistan, the answer increasingly lies beyond its borders. The country's location at the heart of Central Asia gives it the potential to connect some of the world's fastest-growing markets. As trade between Europe and Asia continues to evolve and companies seek more diversified supply chains, Uzbekistan is positioning itself not simply as a destination for investment but as a country through which investment, production and trade increasingly flow.

That ambition extends across multiple sectors. Transport corridors linking Central Asia with Europe, South Asia and China are expected to reduce transit times and expand access to international markets. New manufacturing projects are intended to move the economy further up regional value chains. Investments in renewable energy, electricity networks and digital infrastructure aim to provide the foundations for more advanced industries, while improvements in customs systems and logistics are designed to make regional trade faster and more efficient.

For much of the past decade, success was measured by Uzbekistan's ability to open its economy and attract international capital. The next phase will be judged by something different: whether those investments can be transformed into productive industries, efficient infrastructure and stronger regional connectivity.

That transition will not be straightforward. Trade is expanding faster than transport infrastructure. Industrial growth is increasing demand for reliable electricity. Climate change is placing additional pressure on water resources, while the rapid development of artificial intelligence is creating new requirements for digital infrastructure and skilled labour.

Meeting those challenges will require sustained public investment, closer regional cooperation and continued support from international financial institutions. It will also require stronger institutions capable of preparing complex, investment-ready projects that meet international standards.

As Kyrgyzstan's Minister of Economy and Commerce Bakyt Sydykov observed during the forum, competition is increasingly shifting away from simply attracting capital.

"Competition among regions will not be limited to attracting capital," he said. "It will also be a competition for high-quality ideas and well-prepared projects."

Across Eurasia, governments are no longer competing solely on labour costs or tax incentives. Increasingly, they are competing on the quality of their institutions, the readiness of their infrastructure and their ability to deliver complex cross-border projects that can attract long-term investment.

For Uzbekistan, that evolution may prove decisive. The reforms of the past decade opened the economy to the world. The challenge now is to build the transport corridors, energy systems, industrial base and digital infrastructure needed to support a far more ambitious role within the regional economy.

Whether through the China-Kyrgyzstan-Uzbekistan railway, the Middle Corridor, regional energy projects or new investments in artificial intelligence and logistics, the objective is increasingly the same: to transform Uzbekistan's geographic position into a lasting economic advantage.

The Eurasian Development Bank's own plans reflect that shift. With up to $2bn in planned investment and Uzbekistan now established as one of the institution's largest shareholders and strategic priorities, the bank is positioning itself to play a significant role in the country's next stage of development.

But financing alone will not determine the outcome. The discussions in Almaty made clear that the next decade will depend less on the availability of capital than on the ability to convert investment into infrastructure, industries and institutions capable of sustaining long-term growth.

For Uzbekistan, the foundations have already been laid. The next chapter will be defined not by opening the economy, but by connecting it, to regional supply chains, international markets and the broader economic networks that are reshaping Eurasia.