The World Bank Group has approved a new financing package to support economic reforms, strengthen public services, and promote job creation in the Kyrgyz Republic. The initiative aims to improve energy security, attract private investment, and support sustainable economic growth through a broad reform agenda.
Approved on June 29, 2026, the Second Sustainable and Inclusive Growth Development Policy Operation builds on earlier World Bank support and will help the Kyrgyz government advance reforms under its National Development Strategy 2030.
The financing package uses an innovative Policy-Based Guarantee Plus (PBG+) structure, combining a US$50 million concessional credit from the International Development Association (IDA), a US$200 million IDA guarantee, and a guarantee from the Multilateral Investment Guarantee Agency (MIGA). The arrangement is expected to help the Kyrgyz Republic access up to US$333 million in international commercial financing on improved terms.
The operation focuses on three major areas: energy reform, social service improvements, and strengthening the business environment. In the energy sector, reforms aim to improve financial sustainability, increase transparency, enhance operational performance, and encourage private investment in renewable energy. These changes are expected to support more reliable electricity supplies while reducing pressure on government budgets.
The program will also support improvements in social protection by making assistance programs more targeted and effective. Additional reforms include strengthening local development financing, improving water supply and sanitation services, and ensuring vulnerable communities benefit more directly from economic growth.
To encourage private sector development, the initiative will help simplify business regulations, improve competition policies, and reduce unnecessary licenses and permits. The reforms also include stronger fiscal management rules and more transparent public procurement systems to create better conditions for businesses and investors.
World Bank officials said the financing package represents the first use of this type of guarantee structure in Central Asia and is designed to diversify the Kyrgyz Republic’s investor base while improving access to affordable financing.
The World Bank Group currently supports 25 projects in the Kyrgyz Republic with total commitments of approximately US$1.5 billion. Additional support from the International Finance Corporation (IFC) and MIGA focuses on areas including housing finance, small and medium enterprises, agriculture, and smart agriculture development.
