The Eurasian Development Bank (EDB) is seeking to expand its role in Central Asia and the broader region as rapid economic growth, infrastructure gaps and shifting global trade routes create demand for billions of dollars in new investment, Nikolai Podguzov, Chairman of the EDB Board, said in an interview with IntelliNews.

The EDB, which celebrates its 20th anniversary this year, has grown significantly since its launch in 2006, and now has seven member states, most recently adding Uzbekistan in 2025. Its cumulative portfolio had reached 348 projects worth $22.1bn by the middle of 2026, financing infrastructure, energy, industry, agriculture, water management and digitalisation across its region of operations.

"Twenty years ago, the Eurasian Development Bank was established as a bilateral initiative with a relatively small project portfolio," Podguzov said. "Today, we have evolved into a regional multilateral development bank bringing together seven member states."

Uzbekistan's accession has strengthened the EDB's position in Central Asia, making the country its third-largest shareholder with a 10% stake. The bank has opened a representative office in Tashkent and plans to invest $1.5bn in Uzbekistan by 2031.

The EDB said it was also in discussions with prospective members that include neighbouring countries, Asian economies and states in the Gulf region. It opened a representative office in Abu Dhabi at the end of 2025.

The expansion takes place at a time when Central Asia is experiencing rapid economic growth and increasing interest from investors seeking exposure to infrastructure, energy, mining, logistics and other sectors. The EDB expects the combined economies of the five Central Asian countries to grow by more than 6.5% in 2026, with their combined GDP exceeding $600bn this year. Across all EDB countries of operation, aggregate GDP is expected to grow by 2% in 2026 to more than $3.5 trillion.

"Overall, our assessment is that the region remains stable and continues to grow," Podguzov said. "But the balance of risks has shifted."

Focus on infrastructure

Today, the EDB’s mission remains broadly unchanged since its creation — promoting economic development and cooperation through investment — but the scale and nature of its activities had changed significantly.

"Over time, we have evolved from financing individual projects to driving large cross-border initiatives that address the region's most pressing challenges," Podguzov said. Those challenges include infrastructure shortages, water scarcity, energy security and the need to diversify economies away from commodity-dependent growth.

Transport and logistics is set to be one of the central pillars of the development bank’s new strategy for 2027-2031. Six of its seven member states are landlocked, while mountainous terrain makes infrastructure construction particularly challenging and expensive.

"For them, transport connectivity is not simply about roads and railways — it is about access to global markets, the competitiveness of exports and imports, and the ability of people and businesses to move efficiently across borders," Podguzov said.

The EDB's Eurasian Transport Network concept envisages the development of corridors along both west-east and north-south axes, while linking them into an integrated network. The bank is involved in financing and structuring projects as well as working with governments and other financial institutions on public-private partnerships. One example is the Big Almaty Ring Road in Kazakhstan (BAKAD), which was financed through a syndicate involving the EDB, European Bank for Reconstruction and Development and Islamic Development Bank.

The project illustrates the bank's broader approach to infrastructure, Podguzov said, because its benefits extend beyond transport. BAKAD was designed to reduce congestion, improve road safety and divert transit traffic away from Almaty, while measures such as noise screens and monitoring of air quality and noise were used to limit its environmental impact. It has also encouraged commercial and industrial development along the highway, creating permanent jobs, the bank said.

Logistics investment

The bank sees logistics infrastructure as increasingly inseparable from transport connectivity, with warehouse real estate emerging as a major investment opportunity. Between 2021 and 2025, total warehouse space in the region increased from 44mn to 58mn square metres. But Podguzov said modern logistics facilities remained in short supply.

"We see warehouse real estate as one of the most promising infrastructure segments in the region," Podguzov said. "The goal is to move the warehouse market from a collection of individual facilities to a more integrated, transparent and investable asset class.” 

The bank is developing a warehouse real estate platform and dedicated investment funds designed to aggregate projects, provide professional management and standardise investment structures. It also sees digital infrastructure as essential to making physical infrastructure work more efficiently.

"A modern logistics system needs both hard and soft infrastructure," Podguzov said, pointing to digitalisation, transparent regulations, streamlined customs and border procedures, reliable data and better coordination between investors, developers, tenants and public authorities.

The EDB’s Eurasian Transport Network Observatory currently covers around 400 existing and planned projects across 13 countries, with a combined investment value of about $340bn.

Mobilising private capital

The EDB's strategy places particular emphasis on attracting private and institutional capital alongside its own financing. Unlike many multilateral development banks, the EDB focuses heavily on non-sovereign lending. The bank said it accounted for 39% of all non-sovereign financing provided by international financial institutions in the Eurasian region over the past four years, equivalent to about $9.15bn.

"No single development institution can meet the region's investment needs on its own," Podguzov said.

Central Asia faces an annual investment gap of more than $50bn, while financing from all multilateral development banks averages around $10bn a year. 

"We believe that investing together is more effective than investing separately," Podguzov said, arguing that the bank’s local knowledge could complement the resources of larger international institutions such as the Asian Development Bank, World Bank, New Development Bank, Asian Infrastructure Investment Bank and Islamic Development Bank.

The bank's investment activity has accelerated sharply, with as much invested in the past five years as during the previous 15, and it intends to maintain at least that level during its next five-year strategic period. The EDB is also seeking to build stronger links with Gulf investors. It plans to establish a development fund based in Abu Dhabi Global Market (ADGM), following its debut dirham-denominated bond placement on exchanges in Kazakhstan and the United Arab Emirates.

"The idea is straightforward: connect Gulf investors with opportunities in Central Asia while ensuring proper diversification and risk-sharing," Podguzov said.

The EDB would invest alongside private investors, providing additional protection and reducing their direct exposure to regional project risks. It sees the relationship as running in both directions, with Central Asian companies also increasingly looking towards Gulf markets as Saudi Arabia, the UAE and Oman pursue economic diversification programmes.

Higher-value industries

The EDB's second major strategic priority is to support higher-value-added production.

"The region's traditional commodity-driven growth model has reached its limits," Podguzov said. However, he added, there is potential in chemicals, mechanical engineering, metallurgy, food processing and the agro-industrial complex. Developing these sectors could diversify economies, raise productivity, improve export potential and create better-quality jobs, while generating more than $500bn annually for the region, according to the bank’s new report.

Kazakhstan and Uzbekistan are already emerging as important logistics and distribution hubs, strengthening the region's position between China and Europe, South Asia and the Middle East, and the South Caucasus and Caspian Basin. The EDB thus estimates that there is scope to increase the region's trade turnover with external markets by 34% by 2031.

Digitalisation is another central part of the bank's strategy. The EDB established its Fund for Digital Initiatives in 2020 to support digital transformation and cross-border cooperation. The fund combines financing with advisory support and currently manages projects involving public services, data exchange, innovation and regional cooperation. Projects include Kazakhstan's National Water Resources Platform, its National Digital Investment Platform, an international artificial intelligence platform and a digital map of Dushanbe for urban planning and management.

"Digitalisation is becoming one of the most important drivers of productivity, competitiveness and economic growth," Podguzov said.

Artificial intelligence (AI) is now emerging as a major new area of focus, with member states interested in developing AI capabilities, digital infrastructure, data governance and the skills needed to use the technology.

"We believe that digital transformation and AI adoption will play a decisive role in shaping the region's economic future," Podguzov said. The EDB expects countries that successfully adopt those technologies to be better positioned to diversify their economies, improve public services and raise productivity.

Islamic finance expands

The bank is also developing Islamic finance as a new source of funding for infrastructure and industrial projects. It has established a dedicated Islamic Finance Window in cooperation with the Islamic Development Bank Group and completed its first Islamic finance transactions.

A joint study by the EDB, the Islamic Development Bank Institute and London Stock Exchange Group estimates that Islamic financial assets in Central Asia could rise from less than $1bn currently to $2.5bn by 2028 and $6.3bn by 2033. Sukuk assets alone could reach $5.6bn by 2033.

"We see significant untapped potential in Central Asia, particularly in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, where demand for alternative sources of long-term financing is growing," Podguzov said.

The development of Islamic finance could also deepen links between Central Asia and Gulf investors, particularly through the EDB's presence in Abu Dhabi. Islamic finance is expected to become an increasingly important part of the region's financial architecture, complementing conventional financing and broadening the investor base.

Resilience amid global instability

The EDB expects Central Asia to remain the strongest growth area within its wider region of operations despite increased external risks. The instability in the Middle East has raised the possibility of higher energy prices, logistics disruptions and stronger inflation expectations, Podguzov said. The effects will vary between countries depending on whether they are net energy exporters or importers and their exposure to global food and transport costs.

However, strong investment, infrastructure development, population growth and rising domestic demand continue to support Central Asia. Over the past 25 years, the region's GDP has expanded by around 6% a year on average, according to the EDB, while growth accelerated to 6.9% in 2025, the strongest performance since 2012. Demographics are another driving force: the region's population is expected to reach 96mn by 2040, adding to demand for infrastructure, housing, energy, transport and consumer goods.

"The region's total GDP could reach more than $3.5 trillion this year," Podguzov said. 

Environmental and social considerations have become increasingly integrated into the EDB’s investment decisions. "All EDB projects undergo environmental and social screening to identify potential risks at an early stage and ensure that projects meet appropriate environmental and social standards," he added.

At the end of 2025, 25% of the bank’s portfolio was aligned with the UN Sustainable Development Goals, 1.7 times its target. Its green portfolio has tripled over the past seven years to about $2bn, around half of which has been invested in renewable energy. Podguzov said the approach was not limited to measuring the direct financial return from individual projects, but also considered their contribution to regional resilience and quality of life.

"Most importantly, over the past 20 years these investments have delivered tangible benefits for millions of people across Eurasia by improving regional connectivity, strengthening energy and food security, expanding industrial capacity, and fostering sustainable economic growth," Podguzov said.

EDB-financed projects have created more than 45,000 jobs, while its investments have included more than 1,700 km of transport and pipeline infrastructure, three international airports with combined annual capacity of 32mn passengers and more than 4,000 railway rolling stock units.

The bank has also financed 35 power plants with combined installed capacity of 2.7 GW and supported the launch of 33 manufacturing plants.

The next stage, Podguzov said, will involve doing more with partnerships, rather than simply expanding its own balance sheet. "Our ambition is not simply to attract more capital to Central Asia, but to build lasting investment bridges between the region and the world's major pools of capital — with the EDB acting as a trusted regional partner on both sides of that bridge," he said.

That ambition reflects the transformation of the institution over its first two decades, from a bilateral lender into a regional development bank seeking to shape infrastructure, investment and economic integration across a rapidly changing Eurasian region.