The World Bank Group has approved $101mn in support of the Kyrgyz Republic’s reform agenda, which aims to promote sustainable energy development, improve social services, and build a stable and inclusive economy.
The financing, part of the First Sustainable and Inclusive Growth Development Policy Operation, will provide budgetary support to help the Kyrgyz government implement its comprehensive reform program. These reforms are key to the country’s ambition of reaching upper-middle-income status by 2030.
Central to this reform effort is the Kambarata-1 Hydropower Project, a flagship initiative expected to significantly impact the Kyrgyz economy by boosting energy generation and economic opportunities. The government, in partnership with the World Bank and other development partners, is working to ensure that this major infrastructure project delivers long-term, inclusive benefits for the population.
“This Development Policy Operation reflects our strong partnership with the Kyrgyz Republic and our shared goal – to deliver tangible results for people,” said Hugh Riddell, World Bank Group Country Manager for the Kyrgyz Republic. “As the country advances with the landmark Kambarata-1 Hydropower Project, the reforms supported by this operation will help create jobs, build skills, and establish the right conditions to ensure the project delivers lasting and inclusive benefits for all,” he added.
The World Bank’s support will focus on three key areas. First, reforms in the energy sector aim to modernize infrastructure, expand access to electricity, and support broader economic transformation. Measures include revising electricity and heating tariffs while protecting low-income households, increasing transparency, and attracting private investment in renewable energy.
Second, the program will strengthen social services and resilience. These reforms are designed to ensure that the benefits of economic growth reach vulnerable populations. The government will focus on improving education outcomes, expanding targeted social programs, and modernizing water infrastructure to address regional disparities and ensure equitable access to essential services.
Third, the policy operation will support reforms to enhance fiscal sustainability and improve the business environment. This includes modernizing legislation to boost transparency, increase competition, and strengthen investor confidence, which is expected to attract private sector participation and promote job creation.
The $101mn operation is financed through the International Development Association (IDA), the World Bank’s concessional lending arm. The funding includes a $68mn zero-interest credit with a 50-year repayment period, and a $33mn zero-interest loan with a 12-year maturity and a six-year grace period. This financing structure offers the Kyrgyz Republic affordable and sustainable support for its development priorities.
The World Bank Group’s mission is to end extreme poverty and promote shared prosperity on a livable planet. In the Kyrgyz Republic, the Bank currently supports 25 active projects across various sectors, with total commitments of $1.4bn. Through this new operation, the partnership aims to accelerate progress toward a more inclusive, resilient, and prosperous future for all Kyrgyz citizens.
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