BAKU, Azerbaijan, July 30. Turkmenistan’s private sector companies enjoy very significant cost advantages when compared with their peers abroad, Eric Livny, Head of the European Bank for Reconstruction and Development (EBRD) in Turkmenistan, told Trend in an exclusive interview.
He highlighted that energy, water, and land are available at extremely low prices or at no cost at all, thanks to government-subsidized rates. "The cost of electricity for Turkmen companies is about $0.36 per 100kwh. Petrol is also only 7 US cents. On labor costs, Livny noted that monthly wages of Turkmen factory workers range between $100–250," he noted.
The official emphasized that such conditions have led to the rapid growth of import-substituting businesses, which have increasingly turned toward exports. "Most businesses have been set up to substitute for imports, but given the relatively small size of the domestic market, their focus has quickly shifted to exports," Livny said. Competitive sectors include plastic packaging, greenhouse agriculture, and construction materials.
He mentioned specific cases such as Tudana, which, according to him, is currently the largest supplier of greenhouse strawberries to Uzbekistan’s major food retailer, Korzinka, and Miwe, a large-scale farm with a 100-hectare banana greenhouse that aims to supply domestic and regional demand.
Livny noted that this momentum is likely to continue, assuming the government will maintain current utility prices, favorable taxation, and exchange rate policy. He added that in case private entrepreneurs can have easier access to finance, the growth and international presence of Turkmen companies will become even more visible.”
EBRD resumes operations in Turkmenistan
After a three-year hiatus, the EBRD is re-engaging with Turkmenistan and preparing to resume lending activities. “First and foremost, we are planning to restart lending to export-oriented companies,” Livny said. These efforts will be supported by on-demand business advisory services provided through EBRD's local and global consulting networks.
The EBRD also intends to work with Turkmen banks, facilitating international trade transactions and providing funds for on-lending to the country’s micro-, small and medium-sized businesses.
While initial activity may be limited to “3–4 deals per year,” Livny emphasized that the EBRD hopes to scale up once it can have framework financing agreements with local partner banking institutions. The bank is ready to deliver a robust capacity-building program for both the Central Bank and domestic financial institutions, covering areas such as “modern underwriting standards and trade finance,” “cybersecurity,” and “digital readiness.”
Macroeconomic trends and structural reform
On Turkmenistan’s macroeconomic landscape, Livny noted that EBRD does not have access to granular data on Turkmenistan’s macroeconomic performance and are primarily a consumer of analysis provided by the IMF and major rating agencies. He cited the 2024 Fitch rating of BB– as a positive sign.
He described the current exchange rate regime, and added that: “The Turkmen manat has been fixed in the Covid’s aftermath at 3.5 manat/US$ (the official, preferential rate) and 19.5 manat/US$ (the unofficial, commercial rate), helping to maintain price stability.” According to him, inflation has been in single digits, with public sector wages increased annually by 10 percent.
Although private activity has grown in agriculture, manufacturing, and services, Livny acknowledged that the economy remains overwhelmingly dependent on gas exports and very large state-owned enterprises. "All banks but one are also 100 percent owned by the state," Livny added.
Nonetheless, Livny pointed to positive signs of integration. The country is gradually opening up to the outside world while proudly maintaining its ‘positive neutrality’ stance. In 2023, Turkmenistan joined the Global Methane Pledge and began WTO accession talks.
Transport infrastructure and regional connectivity
Livny underlined Turkmenistan’s strategic location in the development of regional logistics corridors, especially the Trans-Caspian International Transport Route (TITR). “Regional trade within Turkmenistan, across Central Asia, and beyond will greatly benefit from the upgrade and expansion of TITR," he said.
He stated clearly that “Turkmenistan should upgrade its connector roads and railways, modernise border crossings and eliminate unnecessary barriers to trade and transportation.” While Turkmenbashi port is already equipped, he added that: "The missing link is modern road and rail connectivity from Turkmenbashi to the Kazakh and Uzbek borders.”
The EBRD is ready to assist, particularly through technical feasibility and due diligence studies, though ultimately it is up to the government of Turkmenistan to decide whether, when, and how it would like to undertake any of the necessary investments.
Measured engagement and future outlook
For now, the EBRD is not rushing to expand its operations, focusing instead on a phased, pilot-based approach. “We are not seeking to immediately scale up our operations in Turkmenistan and are currently working on the first pilot project with a medium-sized manufacturing company,” Livny said.
Future projects may involve primary agriculture (greenhouses), food processing and light industry (e.g. footwear and construction materials). The bank will prioritize companies that can generate significant foreign currency earnings.
He added that engagement with the textile sector may become possible after reforms. “Turkmenistan has recently engaged with the ILO to eliminate bad practices in the cotton industry. Once this work is completed, we will be happy to engage with the country’s textile sector," Livny added.