Washington—On April 18, 2025, the World Bank's Board of Executive Directors approved $120 million for a project aimed at developing a sustainable finance market for Micro, Small, and Medium Enterprises (MSMEs) in the Kyrgyz Republic. This initiative will be co-financed by a $50 million loan from the Asian Infrastructure Investment Bank (AIIB), highlighting the collaboration to promote economic growth in the region. The project has a total funding of $170 million and aims to advance green finance, mobilize private capital, and enhance the capacity of local financial institutions.
Commenting on the initiative, "Increased private sector-led job creation is a key pillar of the World Bank Group's Country Partnership Framework with the Kyrgyz Republic," said Hugh Riddell, World Bank Group Country Manager. "This project will directly benefit MSMEs and financial institutions, thus further contributing to sustained economic growth and creation of thousands of jobs."
The project will concentrate on two main components: Sustainable Finance for MSMEs and a Green Guarantee Mechanism. The first component will provide wholesale financing through Participating Financial Institutions (PFIs) to offer loans to MSMEs for green and sustainable investments. It will also support the establishment of a Green Finance Fund, led by the government, prioritizing energy efficiency, renewable energy, and environmentally sustainable practices.
The Green Guarantee Mechanism will introduce a green guarantee mechanism via the Guarantee Fund to offer partial credit guarantees to financial institutions lending to MSMEs. This aims to reduce risks for lenders and encourage more access to finance for MSMEs pursuing green projects. The initiative is expected to mobilize up to $148 million in private sector investments over the next five years.
Emiko Todoroki, World Bank Senior Financial Sector Specialist and Project Task Team Leader, stated, "The project builds on the success of our earlier engagement in this field – the Emergency Support for Micro, Small, and Medium Enterprises Project, which provided vital financial relief and recovery support during and after the COVID-19 crisis. We look forward to our continued partnership with the Ministry of Finance of the Kyrgyz Republic, the State Development Bank, the Guarantee Fund, development partners, and all stakeholders to further strengthen the country’s financial system and support sustainable growth that creates more and better jobs."
Financing for the project is provided through the International Development Association (IDA), with a zero-interest, shorter-maturity loan and repayments distributed over six years. The implementation of this project will continue through December 2030, adhering to international standards, including procurement, financial management, and anti-corruption guidelines.
The World Bank Group is focused on ending extreme poverty and promoting shared prosperity. Its current program in the Kyrgyz Republic includes 23 projects, with a total commitment of $1.2 billion, aimed at modernizing and developing various sectors.