China-Kyrgyzstan-Uzbekistan railway: Kyrgyzstan invests initial $14 million, pledges $131 million over three years

Kyrgyz Prime Minister Akylbek Japarov signed the directive authorizing this funding, which is part of a joint venture facilitated through the state-owned enterprise Kyrgyz Temir Zholu. The Ministry of Finance will coordinate with the Budget, Economic, and Fiscal Policy Committee of the Jogorku Kenesh to disburse these funds based on the current National Bank exchange rate.

The railway project, aimed at enhancing trade connectivity between Central Asia and China, has seen significant financial commitments from participating countries. Kyrgyzstan’s government, through its proposed 2025 budget, plans to contribute a total of 11 billion Kyrgyz soms (equivalent to $131.4 million) for the railway, with funds released in phases over three years. Specifically, $28.67 million is slated for 2025, $50.87 million for 2026, and $51.85 million in 2027.

Project Background and Partnership Details

The 454-kilometer railway route, agreed upon by Uzbekistan, Kyrgyzstan, and China in September 2022, has undergone extensive discussions, particularly regarding funding. The initial project cost estimates varied, with Uzbek Deputy Minister of Transport Jasurbek Choriev projecting $5 billion and Prime Minister Japarov estimating up to $8 billion.

In June of this year, the three countries signed a final agreement on the railway’s construction. Under the agreement, Kyrgyzstan and Uzbekistan will each hold a 24.5% stake in the project company, with China holding the remaining 51%. The project’s total cost is estimated at $4.7 billion, with half funded by the participating countries based on their respective shares. China will provide the remaining $2.35 billion as an interest-free loan.

The strategic railway project is expected to foster greater economic integration and expedite trade routes across the region, enabling Central Asian countries to access key Chinese markets.