WASHINGTON, June 29, 2026 - The World Bank's Board of Executive Directors today approved the Second Sustainable and Inclusive Growth Development Policy Operation (DPO) for the Kyrgyz Republic. This second operation builds on the re-engagement DPO approved in June 2025 and supports a multi-sector reform agenda. The DPO aims to strengthen energy security and sustainability, social service delivery, and the business environment to attract private investment and create jobs.
This operation leverages a range of World Bank Group instruments, including a $50 million concessional credit and a $200 million guarantee from the International Development Association (IDA), as well as a guarantee from the Multilateral Investment Guarantee Agency (MIGA). This structure, known as a Policy-Based Guarantee Plus (PBG+), is designed to strengthen lender confidence, enabling the Kyrgyz Republic to access up to $333 million in financing from international commercial loan markets on more affordable terms. This is the first time such an innovative financing package will be used in the Central Asia region.
"The World Bank Group is proud to support the Kyrgyz Republic in delivering its ambitious reform agenda aligned with the National Development Strategy 2030. We are also proud to support the Government to leverage the World Bank Group Guarantee Platform with a view to diversifying the country's investor base and achieving more favorable pricing in commercial lending markets," said Hugh Riddell, World Bank Group Country Manager for the Kyrgyz Republic.
The Second Sustainable and Inclusive Growth Development Policy Operation supports the Kyrgyz government's reform program across three main areas. First, in the energy sector, the reforms will strengthen the sector's financial position, its operational performance and transparency, while also opening the door to greater private investment in renewable energy. This is expected to deliver more reliable electricity for households and businesses and reduce the need for government subsidies to the energy sector.
Second, the reforms seek to help to improve the targeting of social assistance programs, introduce a new channel of targeted transfer from the central government to local self-governing bodies for financing locally initiated development priorities, and make water supply and sanitation services more sustainable. These measures are intended to help vulnerable households benefit more directly from economic growth and improve the quality of public services.
Third, the operation supports improvements in the business environment by helping the Government's efforts to sharpen the Law on Competition, streamlining business regulations and reducing the number of licenses and permits required to start business activities. The operation also reinforces stronger fiscal rules to ensure macro-fiscal stability and more transparent public procurement to improve conditions for broader private sector participation in public procurement bids.
The World Bank Group's mission is to end extreme poverty and boost shared prosperity on a livable planet. In the Kyrgyz Republic, the World Bank is financing 25 projects with total commitments of $1.5 billion. IFC portfolio includes 11 investment projects totaling $65 million, focused mainly on local-currency finance for housing, small and medium businesses, and agriculture projects. MIGA's total exposure is $3.5 million supporting a smart agriculture project.
