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The Asian Development Bank intends to redirect a significant share of its engagement in Uzbekistan toward high-technology industries and special economic zones, moving beyond the infrastructure-heavy portfolio that has defined its presence in the country for years. Kanokpan Lao-Araya, head of the ADB’s permanent representation in Uzbekistan, outlined the shift in remarks to Kursiv Uzbekistan.
Infrastructure lending will not disappear, Lao-Araya said, but the bank’s calculus is changing. Where earlier programmes concentrated on building roads, utilities and other physical networks, the ADB now wants to assess how each project helps Uzbekistan embed itself in regional and global value chains. “Before, we implemented many infrastructure projects,” she said. “Now we need to think about how Uzbekistan can raise its role in global and regional value chains.”
The Logic Behind the Pivot
The strategic rationale is rooted in Uzbekistan’s geography. The country is doubly landlocked — surrounded entirely by states that themselves lack direct sea access — making export logistics unusually expensive. As Uzbekistan deepens its integration into international trade, Lao-Araya noted, earlier mechanisms that helped offset those transport costs are likely to diminish.
High-value-added manufacturing offers a way to absorb that burden. If a product commands a sufficiently high price per kilogram or unit, the proportional cost of moving it to distant markets shrinks. Semiconductor fabrication was cited explicitly as the kind of industry the bank now wants to support. “High-technology sectors such as semiconductor production, special economic zones where something new can be manufactured instead of simply exporting low-value-added goods — that will help offset export costs,” Lao-Araya said.
Social and Environmental Safeguards
Alongside the strategic reorientation, Lao-Araya described the bank’s approach to managing the social and environmental footprint of its projects. Communities are consulted during project preparation, and potential risks to residents and natural resources are assessed before work begins. In water-supply schemes, for instance, the environmental impact of laying pipelines is evaluated; where construction requires land acquisition or the resettlement of households, compensation is built into project design.
The ADB also maintains a formal complaints mechanism through which affected residents can raise concerns, including via media outlets and civil society organisations. Independent auditors review project implementation and compliance with the bank’s own standards, Lao-Araya said.
The ADB recently approved a $200 million loan to Uzbekistan for the modernisation of electricity distribution networks, a project that sits at the intersection of the bank’s continuing infrastructure commitments and its broader ambition to make Uzbekistan’s economy more competitive.