BAKU, Azerbaijan, November 13. The China-Kyrgyzstan-Uzbekistan railway and potential investment opportunities along the Caspian transport axis are among the regional connectivity projects drawing the attention of the Turkic Investment Fund (TIF), including possible cooperation with the Azerbaijan-Uzbekistan Investment Company (AUIC), Ramil Babayev, General Director of the Fund, told Trend in an exclusive interview.
The Fund is also prioritizing energy, industrial development and support for micro, small and medium-sized enterprises (MSMEs) as it expands its operations in Uzbekistan, with a focus on projects that strengthen economic ties among member states of the Organization of Turkic States (OTS).
According to Babayev, the priorities were reviewed at the Fund's third annual Board of Governors meeting in Tashkent on October 22, 2026. The meeting identified transport and logistics infrastructure, industrial cooperation, green energy, and entrepreneurship as key areas for expanding financing.
Uzbekistan's transport geography makes connectivity projects particularly important. The country is landlocked and relies on transit routes through neighboring states to access international markets. The China-Kyrgyzstan-Uzbekistan railway, the Middle Corridor and developing southern routes are expected to reshape its role in regional trade and logistics.
Energy is another major area of potential investment. Uzbekistan plans to add around 22 gigawatts of generating capacity by 2030 and increase the share of renewables to more than 50%. Achieving these targets will require investment not only in generation but also in electricity transmission, energy storage and efficiency.
The Fund also sees opportunities in manufacturing and entrepreneurship. Industrial goods and machinery already account for almost half of Uzbekistan's exports to OTS countries, while small businesses generate more than half of the country's gross domestic product and provide about three-quarters of employment.
Digital infrastructure, agribusiness, water efficiency and public services were also among the areas discussed during the Fund's October visit to Tashkent.
Financing pipeline and partnerships
TIF is building its Uzbekistan project pipeline through cooperation with international financial institutions, national development institutions and private-sector partners.
During a visit to Tashkent from October 20 to 23, a delegation led by Babayev met with representatives of the International Finance Corporation (IFC), the European Investment Bank (EIB), AUIC, Vision Invest, Highland Capital, the Agency for the Development of Light Industry and the Entrepreneurship Development Company.
The discussions covered infrastructure, transport and logistics, energy, textiles, agriculture and public services. The aim was to identify potential projects that could meet the Fund's requirements for commercial viability, measurable development impact and regional integration.
The Fund has already established its first Co-Financing Framework with the Islamic Corporation for the Development of the Private Sector (ICD). The framework can mobilize up to $300 million for private-sector development projects across five TIF member states, including Uzbekistan.
TIF has also secured a total of $50 million in commitments through financing transactions with the European Bank for Reconstruction and Development, the Dutch Entrepreneurial Development Bank (FMO), the OPEC Fund for International Development and other development institutions and commercial banks.
Its future operations in Uzbekistan are expected to rely primarily on co-financing and syndicated transactions alongside established financial institutions. The approach is intended to help the Fund expand its reach while drawing on the expertise and local networks of its partners.
TIF seeks to mobilize additional capital
The Fund's authorized capital stands at $600 million. However, its objective is to develop a balance sheet and a network of partners capable of financing projects worth several times that amount.
Alongside co-financing and syndicated lending, TIF is considering risk-sharing instruments, including guarantees, first-loss arrangements and portfolio structures. These mechanisms could help development capital support lending that commercial banks might otherwise be reluctant to undertake, particularly for smaller businesses.
The Fund has discussed these mechanisms with IFC and EIB, while cooperation in this area is also reflected in a memorandum with the Uzbek-Kyrgyz Development Fund (UKDF).
Obtaining an international credit rating is another strategic priority, Babayev said. Such a rating would help TIF attract additional financing from international markets and local capital markets in member states.
The Fund also sees considerable potential in mobilizing private investment from within the region. Investors from OTS countries committed around $3.8 billion to Uzbekistan in 2025, providing an opportunity to channel regional capital into well-structured projects.
Babayev said the Fund's role should therefore be assessed not only by the amount of its own capital invested in Uzbekistan but also by the volume of additional investment it helps mobilize.
Cross-border projects to strengthen regional trade
Cross-border investment is one of TIF's core priorities. The Fund assesses projects from a regional perspective, considering how an investment in one member state could benefit businesses and infrastructure in others.
Uzbekistan's trade with OTS countries increased from around $4 billion in 2017 to $10.8 billion in 2025. Meanwhile, cargo volumes along the Middle Corridor have risen almost fivefold since 2021, reaching approximately 4.5 million tons, while transit times have declined from 18 days to 15 days.
The China-Kyrgyzstan-Uzbekistan railway, which is under active construction, is another project expected to create new opportunities for regional connectivity.
TIF is seeking to support not only major transport routes but also the infrastructure and services needed to make them commercially effective. These include logistics hubs, industrial zones, customs facilities, digital trade systems and reliable energy supplies for businesses operating along transport corridors.
The Fund is also exploring ways to support regional supply chains, including Uzbek cotton and yarn supplied to Turkish textile producers, as well as agricultural goods and machinery components transported across borders for further processing and assembly.
Potential financing instruments include direct lending, credit lines to banks serving exporters and trade finance facilities.
Institutional partnerships are expected to play an important role. A memorandum signed with UKDF in July 2026 provides for joint project identification, risk sharing and support for cross-border business expansion. TIF has also held discussions with AUIC on opportunities along the Caspian transport axis.
The Fund's regional approach also extends to energy and digital infrastructure. Initiatives such as the Green Energy Corridor linking Uzbekistan and Kazakhstan with Azerbaijan, as well as the Trans-Caspian fiber-optic cable, demonstrate the growing importance of interconnected regional infrastructure.
Measuring economic impact
TIF evaluates the expected impact of each investment before approving financing. Every operation is assessed against a results framework that establishes objectives, performance indicators and baseline data. These indicators are incorporated into financing documentation, monitored during implementation and reviewed by the Fund.
For financing facilities provided through financial institutions, the indicators include the number and volume of loans issued to eligible businesses, the share of financing reaching women-led and rural enterprises, support for cross-border trade and the number of jobs created or sustained.
Infrastructure projects are assessed through indicators such as cargo throughput, transit times, generating capacity and emissions avoided, as well as employment during construction and operation.
In Uzbekistan, the Fund places particular emphasis on MSME participation. The country has more than 1.2 million registered small businesses, which account for over half of GDP and about three-quarters of employment, according to Babayev.
Their participation is measured both directly, through the volume and number of loans provided by partner financial institutions, and indirectly, through the involvement of local small businesses as suppliers and contractors in larger projects.
The share of TIF's portfolio connecting two or more member states through trade, investment, or infrastructure is also a key measure of the Fund's regional impact.
