The World Bank has released the Country Climate and Development Report (CCDR) for the Kyrgyz Republic, outlining how climate change is impacting the country's economy and what steps are needed to improve resilience.
The report highlights that the Kyrgyz Republic is experiencing more frequent extreme weather events, including storms, landslides, heat waves, and droughts. These phenomena have tangible economic effects, particularly on sectors such as agriculture.
According to the CCDR, failure to address these risks could reduce real GDP by 2-3% by 2040 and by 2-4% by 2050 due to damage to agriculture and infrastructure. The report also notes that an additional 170,000 people could be pushed into poverty by 2040, with rural areas being most vulnerable. Job and income losses would likely affect households in the lowest income bracket. By midcentury, up to 24% of irrigation demand may go unmet because of rising temperatures and increased water needs for crops. Agricultural productivity could decline further, with annual revenue losses estimated at about 5-10%. Additionally, the number of people exposed to flooding could increase between 24% and 38%.
To address these challenges, major investments in infrastructure as well as structural reforms are recommended. The report states: "Improving the resilience of the Kyrgyz economy is essential for the country’s prosperity, and will require major infrastructure investments and structural reforms, such as improving the business environment, ensuring fair competition (including with state-owned enterprises), maximizing productivity spillovers from foreign direct investment, and deepening integration with regional and global markets."
The CCDR recommends seven policy packages:
- Strengthen planning in irrigation and agriculture through zoning laws, conservation measures, efficient technologies for irrigation systems, resilient pasture management practices, and better extension services.
- Build resilient transport infrastructure using vulnerability assessments; upgrade building standards; implement nature-based solutions; construct roads and bridges designed to withstand floods.
- Advance disaster risk management with improved monitoring of natural hazards; develop smarter master plans; create rapid financing mechanisms for emergencies.
- Promote energy efficiency via cost-reflective tariffs; support building renovation programs; introduce economic incentives; update building codes.
- Enhance energy security through accelerated investment in hydropower and solar generation capacity; expand transmission systems; improve reliability of energy supply.
- Implement reforms aimed at boosting private investment by streamlining business procedures; increasing competition; modernizing investment legislation.
- Pursue cross-sectoral institutional reforms—such as laws promoting resilience—to help achieve emissions targets while integrating resilience into sector policies.
"Achieving the country’s goal of net zero emissions by 2050 will require roughly $400 million annually for the next 25 years," according to the report. Most investments will be needed in power generation, buildings upgrades or retrofits—and transportation infrastructure.
The report also emphasizes that mobilizing private finance alongside public resources is crucial. It suggests economic incentives like green bonds or favorable loan conditions can attract private investors. De-risking instruments might stimulate further involvement from non-state actors while improvements in technology adoption or institutional effectiveness could help manage overall investment requirements.