Uzbekistan Secures $71.1 Million AIIB Loan to Modernize Rural Roads

Uzbekistan and the Asian Infrastructure Investment Bank (AIIB) have signed a $71.1 million loan agreement aimed at upgrading rural road infrastructure in the Khorezm and Karakalpakstan regions.

The deal was finalized during the AIIB’s 10th Annual Meeting in Beijing, The Caspian Post reports, citing The Times of Central Asia.

The loan will finance the first phase of the Karakalpakstan and Khorezm Local Roads Network Reconstruction Project, which aims to modernize rural road infrastructure to improve climate resilience and community accessibility. The project is expected to facilitate better access to markets and essential public services for rural populations.

The total cost of the project is projected at $173.4 million, with a second loan tranche planned to cover the remaining amount. The initial phase will prioritize road improvements in Khorezm, while the second tranche will address road upgrades in the Republic of Karakalpakstan.

According to the AIIB, a phased approach will allow Uzbekistan to better manage its fiscal resources and enhance project planning and execution. This method also enables the bank to provide tailored technical assistance and integrate lessons learned from earlier phases into subsequent work.

This initiative builds on a broader partnership between Uzbekistan and the AIIB. In 2024, the bank approved a $250 million program to support the country’s transition to a greener economy. That package includes measures to reduce greenhouse gas emissions, reform climate-related policies, and promote sustainable land and water management, as well as low-carbon transportation and energy solutions.

The AIIB also backs Uzbekistan’s efforts to boost energy efficiency, expand renewable energy capacity, promote e-mobility, and encourage state-owned enterprises to adopt climate risk reporting practices.

The rural roads project aligns with Uzbekistan’s wider development agenda, which includes modernizing infrastructure, revitalizing underserved regions, and fostering long-term sustainability.