AGP Executive Report

Sanctions and Banking: Kyrgyzstan’s state-owned banks have ended business with 284 companies over sanctions risks, with 41 more under review as authorities step up screening. Utilities: Bishkek water tariffs jumped 44.7% in the past year, among the sharpest increases in the region, adding pressure on households and businesses. Energy Drinks: President Sadyr Japarov gave the Cabinet a month to consider a production and import ban; he warned it could cut tax revenue by about 1.5 billion soms. Regional Investment: Sokuluk district reported 41 large enterprises and 189 small businesses opened since 2021, while new logistics and food-processing projects are planned. Trade and Industry: Kyrgyzstan’s electronic permit system is now integrated with six countries, supporting faster cross-border transport. A separate feasibility study for an integrated agro-food park secured $370,509 from the Eurasian Development Bank. Urban Transport: Kyrgyz officials discussed a Bishkek monorail proposal with China’s BYD, which develops urban rail systems.

Sanctions and Banking: Kyrgyzstan’s ABank and Eldik Bank have ended business with 284 companies flagged for heightened sanctions risks; 41 more are being monitored or reviewed. Agribusiness Investment: The Eurasian Development Bank will provide about $371,000 for a feasibility study and investment plan for an integrated agro-food park. Separately, IFC is financing a new Bishkek agricultural machinery service center as part of a $33 million regional project. Export Push: Seventeen Kyrgyz garment firms have registered in the EU’s REX exporter system, with 10 more applying. The government plans to reimburse some international certification costs from 2027 as businesses seek markets beyond Russia. Trade Links: Kyrgyzstan’s electronic transport-permit system is now integrated with six countries, including China and Türkiye; work on digital consignment notes is next. Manufacturing: A privately financed $2.5 million metal-structures plant has opened in Manas, targeting 1,400 tonnes of annual production and 50 jobs.

Agribusiness Investment: Eurasia Group and IFC signed a financing agreement to raise up to $33 million for four agricultural machinery sales and service centres in Kyrgyzstan and Kazakhstan. Separately, the Eurasian Development Bank will provide $371,000 for a feasibility study of an integrated agro-industrial park. Trade and Exports: Kyrgyzstan’s e-permit system is now integrated with six countries, supporting smoother cross-border transport. Seventeen garment firms have registered in the EU’s REX system, opening access to reduced or zero customs duties. Regional Commerce: Kyrgyzstan and Kazakhstan are targeting $3 billion in annual trade by 2030, building on $2.3 billion in 2025 and new cooperation agreements. Transport Links: Work is advancing on the Kyrgyz section of the China–Kyrgyzstan–Uzbekistan railway, with operations scheduled to begin in 2031. Renewable Energy: Around 50 small hydropower plants are under construction, and 30 are already operating; domestic investors fund about 90% of the projects. Household Finance: More than 304,000 people have used Kyrgyzstan’s voluntary loan restriction service, with 200,100 restrictions still active as of November 1.

Regional Trade: At the SPECA forum in Bishkek, Kyrgyzstan named transport links and transit capacity priorities, including the China–Kyrgyzstan–Uzbekistan railway and a highway link to China. Clean Energy: Around 50 small hydropower plants are under construction, with 30 already operating; domestic investors supplied about 90% of project funding. Waste-to-Energy: China’s CECEP is considering a $95 million plant near Manas, initially designed to process 800 tonnes of waste daily. Feasibility studies are still pending, with no construction timetable announced. Farm Modernization: IFC-backed financing will support agricultural machinery services in Bishkek, while a separate $44.6 million concessional program will help farmers buy equipment through state banks. Business Rules: Officials are reviewing business permits to remove unnecessary and duplicate requirements and reduce processing delays.

Regional Connectivity: At the SPECA forum in Bishkek, Kyrgyzstan made transit development a priority, pointing to the China–Kyrgyzstan–Uzbekistan railway and new road and rail links. The country also pledged $1 million to the SPECA fund. Clean Energy: A Japanese-backed plan calls for three small hydropower plants on the Chon-Kemin River, with room to expand; a 7.8-megawatt plant is also nearing completion to supply the Ala-Too Resort cluster. Farm Investment: The Islamic Development Bank will provide $44.6 million in concessional financing for agricultural machinery, while IFC-backed funding will support equipment service centers, including a new facility in Bishkek. Business Climate: Officials are reviewing permits to remove duplicative requirements and cut paperwork for businesses. Growth: Kyrgyzstan recorded 11.1% real GDP growth in 2025, placing it among the top five OIC economies.

Agriculture and Fisheries: Kyrgyzstan and Russia discussed a joint fishing and processing venture targeting up to 78,000 tonnes a year, alongside plans to expand Kyrgyz aquaculture to 60,000 tonnes by 2035. Bishkek also sought annual fishing quotas in Russian waters; no quota deal was announced. Agricultural trade between the countries has risen nearly a quarter this year. Investment: Dubai International Chamber and Kyrgyz officials explored UAE investment in agriculture, tourism, airports and logistics hubs, including dry ports. Mining: Kyrgyzstan plans to develop three Talas gold deposits through state-owned Kyrgyzaltyn, without selling licences to foreign investors. Energy: President Sadyr Japarov warned he could return the gas system to state control if Gazprom fails to meet its gasification commitments, under an agreement that runs until 2039. Jobs and Growth: An EFSD report says Kyrgyzstan may need to create up to one million jobs by 2040 as its workforce expands.

Gulf Investment: Kyrgyz officials and Dubai International Chamber discussed Emirati investment in agriculture, tourism, airports, logistics hubs and dry ports, alongside halal certification for Kyrgyz exports and webinars to connect businesses. Russia Trade: Kyrgyz and Russian officials agreed to deepen industrial cooperation, improve customs procedures and curb unjustified product-compliance certificates. Project Pipeline: Kyrgyzstan discussed Chinese firm CSCEC’s possible role in Asman city and a small hydropower project in Mailuu-Suu; a state-backed guarantee will support an Aravan cement plant project. Jobs and Growth: An EFSD report says Kyrgyzstan may need 700,000 to 1 million new jobs by 2040 as its working-age population grows; GDP averaged 10.2% annual growth in 2022–25. Issyk-Kul Business: Preferential loans are available to local entrepreneurs near the Ala-Too Resort project, which has hired about 150 people and is expected to generate roughly 100 million soms in local tax revenue in 2027.

Kazakh-Kyrgyz Trade: Companies from the two countries signed agreements worth $95 million as officials met in Bishkek to discuss expanding trade. Mining Revenue: The Jerui gold mine paid 20 billion soms into state coffers in the first nine months of 2026 and contributed 3.5 billion soms to local development funds since 2021. Business Climate: Kyrgyzstan is reviewing permits and rules for businesses, aiming to remove unnecessary requirements and cut compliance costs. Tax Compliance: The Tax Service has launched automated checks of importers’ indirect-tax reports to flag errors before filing. Energy Security: The government is considering a six-month ban on road exports of coal to protect domestic winter supplies, with exceptions for state company Kyrgyzkomur and shipments to China. Agriculture: Farmers can buy imported breeding cattle with preferential loans at 3% interest, supporting livestock production. Digital Services: VKontakte has registered as a taxpayer in Kyrgyzstan and says it has paid taxes due.

Cross-Border Trade: Kyrgyz and Kazakh companies signed agreements worth $95 million, while the two governments met in Bishkek to discuss boosting trade. Banking: National Bank chief Almaz Baketaev said sector assets reached $14 billion in 2025, up 50%, and grew a further 24.2% in the first eight months of 2026. Mining and Regions: Jerui gold mine paid 20 billion soms into state coffers in the first nine months; Talas received 8.6 billion soms in budget allocations over the same period. Investment: A $7.7 million dairy plant planned for Shopokov is expected to create up to 50 jobs and supply domestic and export markets. Business Rules: Kyrgyzstan is reviewing permits to reduce unnecessary costs for businesses, and its tax service has launched automated checks for some importers’ EAEU tax reports. Energy Supply: The government is considering routing coal exports through a state-owned company to prioritize domestic supply and curb shortages and price spikes.

Kazakhstan Trade: Kyrgyzstan and Kazakhstan reported $2.3 billion in bilateral trade for 2025 and are aiming for $3 billion by 2030. At a Bishkek business forum, Kazakh companies signed agreements and contracts worth $95 million with Kyrgyz partners, spanning machinery, food, construction, IT and logistics. Transport and Infrastructure: Kyrgyzstan is expanding road construction and updating equipment, while a planned China–Kyrgyzstan–Uzbekistan railway could open new routes for regional trade. Investment: The National Investment Agency says it attracted $11.8 billion and signed 88 agreements in 2023–26, with investors from Russia, China, Türkiye and Kazakhstan among the main sources. Business Risks: Tighter border checks in Kazakhstan are delaying China-to-Russia shipments, with some carriers suspending routes; the disruption highlights the vulnerability of regional supply chains. Kyrgyz economists also warn that high rates and a shortage of long-term loans are limiting businesses’ ability to invest in equipment and grow.

Trade & Investment: Kyrgyz and Kazakh companies signed agreements worth $95 million during a business mission in Bishkek. Bilateral trade rose 20% in the first eight months of 2026, as the countries work toward a $3 billion target. Supply Chains: Tighter Kazakh border checks are delaying shipments bound for Russia, with some cargo held for weeks and carriers suspending routes. Small importers and marketplace sellers are among those affected. Infrastructure: Kyrgyzstan plans to asphalt 2,000 kilometers of roads this year, while road upgrades and new rail links aim to strengthen transport connections. Business Finance: Small and medium-sized businesses generated 50.9% of Kyrgyzstan’s GDP in 2025, but economists say limited access to long-term loans and high interest rates constrain growth. Agriculture: More than 12.6 billion soms in preferential loans have been issued to support the sector, with a further 20 billion soms in financing projects proposed for 2027.

Regional Trade: Kyrgyzstan and Kazakhstan aim to raise bilateral trade to $3 billion by 2030, with officials calling for closer cooperation in transport, agriculture and other sectors. Zhambyl region’s trade with Kyrgyzstan reached $112.7 million in the first eight months of 2026, up 60% year on year. Investment: A $7.7 million dairy plant planned for Shopokov is expected to create up to 50 jobs and supply domestic, Kazakh and Uzbek markets. Business Finance: Economists say high interest rates, strict collateral rules and a shortage of long-term loans are limiting companies’ ability to invest in equipment; they propose expanding concessional lending and state guarantees. Agriculture: More than 12.6 billion soms in preferential loans has been issued to producers at rates of 2–6%, with five new financing programs worth 20 billion soms under consideration for 2027. Construction: The Ministry of Construction plans external management for firms that have left apartment projects unfinished for years, and says it may refer company leaders to law enforcement.

Investment: Kyrgyzstan’s National Investment Agency says it attracted $11.8 billion and signed 88 agreements from 2023 to 2026. A new $7.7 million dairy plant in Chui will create up to 50 jobs and target export markets in Kazakhstan and Uzbekistan. Regional Trade: Zhambyl region’s trade with Kyrgyzstan reached $112.7 million in the first eight months, up 1.6 times year on year. At a Kyrgyz-Kazakh forum, the countries signed 14 cooperation agreements and reaffirmed a goal of $3 billion in bilateral trade by 2030. Business Finance: Economists say high rates, strict collateral rules and a shortage of long-term loans are holding back investment in equipment; they also want collateral assessments tailored to regional property values. Agriculture: Preferential farm lending has exceeded 12.6 billion soms this year, with five new financing programs worth 20 billion soms proposed for 2027. Energy Costs: The government has allocated 11.4 billion soms to fuel subsidies as Kyrgyzstan diversifies suppliers to manage import disruptions and price pressure.

Investment: Kyrgyzstan signed a $7.7 million contract for a dairy plant in Shopokov, backed in part by a $5.4 million Russian-Kyrgyz Development Fund loan. The project expects to create 50 jobs and sell products at home and in Kazakhstan and Uzbekistan. Regional Trade: Kyrgyzstan and Kazakhstan signed 14 cooperation agreements and reaffirmed a goal of lifting bilateral trade to $3 billion by 2030. Fuel Supply: The government allocated 11.4 billion soms to fuel subsidies as Kyrgyzstan diversifies imports, including shipments by rail from China. Digital Payments: Five Central Asian and Caucasus central banks plan to link national QR payment systems by the end of 2026, enabling cross-border payments through customers’ existing banking apps. Energy: President Sadyr Japarov says Kyrgyzstan uses only 15% of its hydropower potential and is seeking investment in hydropower and renewables amid electricity shortages.

Cross-Border Trade: Kyrgyzstan and Kazakhstan are targeting $3 billion in annual trade by 2030, with new regional agreements and plans for logistics hubs to support growth. Digital Payments: Five Central Asian countries, including Kyrgyzstan, aim to connect their QR payment systems by year-end, enabling cross-border purchases and transfers through local banking apps. Energy Cooperation: Kyrgyzstan, Kazakhstan and Uzbekistan held technical talks on the 1,860-megawatt Kambarata-1 hydropower project, a major investment in regional electricity and water management. Business Support: A pilot program will offer entrepreneurs 150,000 soms for each officially unemployed person they hire. Regional Finance: Payments in national currencies now account for 93.5% of trade within the Eurasian Economic Union, according to Belarus’s central bank chief.

Fuel Supply: Kyrgyzstan has begun receiving fuel from China by rail as it seeks to diversify imports beyond Russia and build larger reserves; traders report stable diesel supplies but some difficulty securing enough petrol. Small Business: SMEs contributed 50.9% of GDP in 2025, with foreign trade rising 9.2% to $8.66 billion, though investment in the sector fell 30.5% year on year. Private Sector: The World Bank says Central Asia needs stronger private businesses and productivity gains to turn investor interest and public-led growth into lasting economic benefits. Insurance: Kyrgyz insurers collected 10.2 billion soms in premiums in 2025, nearly double the previous year, while payouts also rose. Monetary Policy: The National Bank kept its key rate at 12%, maintaining a tight policy stance. Trade Links: Kyrgyzstan and China are pressing ahead with their railway project, which is expected to be 22% complete by year-end and could strengthen regional trade and transit.