Asian investment portfolio Бanka Иinfrastructure Иinvestment in Central Asia: opportunities and challenges for sustainable development
Introduction
In recent years, the Asian Infrastructure Investment Bank (AIIB) has become one of the key international financial institutions supporting the development of infrastructure, sustainable energy, transport and climate adaptation.
For Central Asian countries, cooperation with the AIIB is of strategic importance given the need to modernize transport corridors, energy systems, water infrastructure and public utilities with limited national budgets.
Analysis of the AIIB’s investment portfolio shows significant differences between countries in the region. Some states have been able to build large and diversified portfolios, including elements of private finance and green energy, while others rely primarily on sovereign lending facilities.
According to the AIIB’s project database, the bank’s total approved funding in four Central Asian countries—Kazakhstan, Uzbekistan, Tajikistan and the Kyrgyz Republic—is about US$4.5–4.6 billion.
Uzbekistan: AIIB’s largest portfolio in the region
Uzbekistan is the largest recipient of AIIB funding in Central Asia. The total volume of approved projects is approx. US$2.24 billion.
Main areas of cooperation:
water supply and sewerage;
transport infrastructure;
development of rural infrastructure;
climate projects;
renewable energy.
Near 90% of funding comes from sovereign projects, however about US$225 million allocated to non-sovereign operations, including wind power and energy storage projects.
The success of Uzbekistan is associated with the presence of prepared investment projects, the activity of government institutions and the implementation of structural reforms. At the same time, the growth of external financing requires increased transparency, environmental control and evaluation of the effectiveness of the use of borrowed funds.
Kazakhstan: infrastructure development and attraction of private capital
Kazakhstan ranks second in the region in terms of volume of cooperation with the AIIB – about US$1.88 billion.
Main directions:
transport corridors;
railway infrastructure;
energy;
development of the Middle Corridor;
financial sector.
Near 94% of the portfolio are sovereign projectsHowever, Kazakhstan is gradually expanding the use of public-private partnership mechanisms and attracting private investment.
The experience of Kazakhstan shows that international financial institutions can be not only a source of government loans, but also an instrument for the development of the private sector and institutional reforms.
Tajikistan: infrastructural development with a high role of the state
The volume of AIIB financing in Tajikistan is approximately US$357.5 million.
Main directions:
hydropower;
transport;
water supply;
energy security.
Cooperation is almost entirely based on sovereign financing. The implementation of large infrastructure projects, however, simultaneously increases risks associated with debt sustainability, investment efficiency and environmental consequences.
Occupies a special place Rogun hydroelectric power station project (Rogun HPP), considered as strategically important for strengthening the country’s energy security and increasing electricity exports. However, such a large-scale project is accompanied by serious social and environmental challenges.
One of the most sensitive issues remains population resettlement from the construction zones and the future reservoir. The implementation of the project requires ensuring fair compensation, restoring livelihoods, providing quality housing and social infrastructure for displaced families. For international financial institutions, compliance with international standards on involuntary resettlement, full public consultation, and effective grievance redressal mechanisms are of particular importance.
In addition to the social aspects, the project necessitates continuous monitoring of impacts on water resources, biodiversity, changes in river regimes, climate resilience and potential transboundary consequences for the countries of the Amu Darya basin. This is why large hydropower projects require not only significant financial resources, but also a high level of transparency, independent environmental monitoring and public participation at all stages of implementation.
Kyrgyzstan: limited portfolio and potential for expanded cooperation
The Kyrgyz Republic has the smallest AIIB portfolio among Central Asian countries.
Current projects are concentrated in the following areas:
financial sector;
water supply and sanitation infrastructure;
support for small and medium-sized businesses.
All approved projects fall into the category sovereign financing, and the AIIB has no non-sovereign operations in Kyrgyzstan yet.
In 2026, the prospects for the AIIB’s participation in strategic infrastructure projects in Kyrgyzstan were discussed, including Kambarata HPP-1 and the China–Kyrgyzstan–Uzbekistan railway. However, at the time of analysis, these projects were not included in the list of approved AIIB projects.
Expanding cooperation will require Kyrgyzstan not only to attract funding, but also to improve the quality of project preparation, develop public-private partnership mechanisms, ensure transparency and conduct a full environmental and social assessment.
Regional trends and the role of the AIIB
The AIIB’s investment strategy in Central Asia is gradually moving beyond traditional infrastructure financing. The bank’s modern portfolio includes:
green energy;
climate adaptation;
digitalization;
sustainable urban infrastructure;
private sector support.
Differences in funding levels between countries reflect not only economic potential, but also the ability of government institutions to formulate quality projects that meet the requirements of international financial organizations.
At the same time, the development of large infrastructure projects in the region shows that issues of environmental and social sustainability are becoming no less important than the volume of investment. The implementation of hydropower projects, transport corridors and urban infrastructure is increasingly accompanied by issues of land use, population resettlement, ecosystem conservation, access to information and stakeholder participation in decision-making. This increases the importance of effectively applying the AIIB’s Environmental and Social Policy and international standards to protect affected communities.
Findings and recommendations from civil society (CSO)
From the perspective of civil society organizations, the effectiveness of Central Asian countries’ cooperation with the AIIB should be assessed not only by the volume of funds raised, but also by the long-term impact of projects on people, the environment and sustainable development.
CSO considers it important:
Government authorities should ensure open access to information about projects, including feasibility studies, environmental and social assessments, loan terms and expected results.
The participation of civil society is necessary at all stages of project implementation – from preparation to assessment of the actual impact on local communities.
Particular attention should be paid to issues of resettlement, impacts on natural resources, climate change and protecting the rights of affected populations.
The experience of Kazakhstan and Uzbekistan shows that successful fundraising depends on the availability of prepared projects, institutional capacity and effective interaction with international partners.
It is important for Central Asia to formulate a long-term national strategy for interaction with international development banks, based on the principles of sustainability, transparency and public accountability.
Major infrastructure projects, including hydropower projects, should only be implemented in full compliance with international standards on involuntary resettlement. There is a need to ensure fair compensation, income restoration, access to social infrastructure and meaningful consultation with affected communities.
The CSO considers it necessary to create mechanisms for regular public monitoring of the implementation of AIIB projects, especially in cases where projects may have a significant impact on the environment, water resources, biodiversity and living conditions of the population. Independent monitoring should complement state control and contribute to the timely identification and prevention of environmental and social risks.Conclusion
The experience of Central Asia shows that sustainable development cannot be achieved solely by increasing the volume of international funding. The long-term effectiveness of infrastructure investments is determined by the quality of government, compliance with environmental and social standards, transparent decision-making, accountability and the full participation of civil society. The implementation of large-scale projects, including the Rogun hydroelectric power station in Tajikistan, demonstrates that issues of population resettlement, livelihood restoration, environmental protection and public participation must be considered as an integral part of investment policy. It is the combination of economic efficiency, environmental responsibility and social justice that should become the basis for further cooperation between the Central Asian countries and the AIIB.
Chinara Aitbaeva, Director of the Nash Vek Foundation
Source: PF “Nash Vek”, analysis of the AIIB investment portfolio in Central Asia:
https://nashvek.kg/monitoring-vneshnej-pomoshhi/investiczionnyj-portfel-aziatskogo-banka-infrastrukturnyh-investiczij-aiib-v-czentralnoj-azii-sravnitelnyj-analiz/