Tashkent, Uzbekistan (UzDaily.uz) — Experts from the Asian Development Bank (ADB) have identified four sectors capable of attracting a new generation of foreign direct investment to Central Asia and the Caucasus: green energy, transport and logistics, digital connectivity, and agricultural value chains.
Uzbekistan leads the region in attracting foreign direct investment in green energy, according to the experts. To turn this potential into actual projects, they propose establishing a unified regional investment ecosystem. The Foreign Investors Council under the President of the Republic of Uzbekistan reported this, citing the experts’ analysis.
The study was published on 6 November 2026. Its authors are Rolando Avendano, senior economist at ADB’s Economic Research and Development Impact Department; Khalid Umar, regional cooperation specialist at the Central and West Asia Department; consultant Angelica Beatriz Natividad; and Lovely Tolin, regional cooperation and integration specialist. They sought to identify where investment opportunities are concentrated and what is needed to turn them into bankable projects.
Central Asia and the Caucasus lie at a strategic crossroads between Asia and Europe, have substantial natural resources and are developing their innovation potential. Over the past 20 years, foreign direct investment has supported industrialisation and structural transformation across the region. However, capital remains concentrated in traditional resource-intensive sectors, including mining, coal and gas. The transition towards more sophisticated value chains is creating new opportunities.
Green energy
International investor interest in green energy across the region is growing. Investment needs in the energy sector across the broader Central Asia Regional Economic Cooperation (CAREC) programme region are estimated at US$2.9 trillion–US$3.8 trillion by 2030.
In 2024, energy transition projects accounted for up to 90% of all strategic foreign direct investment in Central Asia and the Caucasus. Most of the capital came from China, Europe and the Middle East. Uzbekistan attracted the largest share of such investment, followed by Azerbaijan and Kyrgyzstan.
According to the experts, major projects such as the Kambarata-1 Hydropower Plant, the Rogun Hydropower Plant and CASA-1000 demonstrate the potential for investments that can also strengthen regional energy connectivity.
Transport and logistics
The region’s location between Asia and Europe allows it to support the diversification of trade routes and supply chains. The Middle Corridor is projected to carry 11 million tonnes of cargo annually by 2030. The authors say the China–Kyrgyzstan–Uzbekistan railway and the deep-water port of Anaklia could further strengthen the region’s role as a transit hub.
Digital connectivity
Experts see significant investment potential in the digital sector, driven both by rising demand and structural gaps in infrastructure. Most countries in the region are landlocked and lack direct access to submarine cables, while internet traffic passes through a limited number of transit routes. This constrains their capabilities at a time when demand for cloud services, data processing and artificial intelligence is growing rapidly.
Mutual digital investment among countries in the region totalled around US$1.2 billion. More than 90% of this amount went to digital services and solutions, including US$1.1 billion in financial services.
A feasibility study for the CAREC Digital Corridor is currently underway in 10 countries. The preliminary project design includes a new southern digital gateway that would connect Central Asian countries to global submarine cables in the Arabian Sea. It also envisages strengthening national backbone networks, establishing a regional ecosystem of data centres and introducing a federated internet traffic exchange model.
Agriculture
The authors also identify agriculture as an area for diversification. The sector accounts for 10–20% of the region’s GDP and 30–40% of employment. Investment could be directed towards storage, logistics, processing and other infrastructure to help increase exports of higher-value agricultural products.
Barriers to investment
At the same time, investors face significant obstacles across the region.
Investment legislation, licensing regimes, foreign ownership rules and business procedures vary considerably from one country to another.
According to the OECD Foreign Direct Investment Regulatory Restrictiveness Index, the region as a whole remains more restrictive towards investment than OECD countries.
Restrictions are higher in certain sectors in Kyrgyzstan, Tajikistan and Uzbekistan. Among the most significant barriers in most countries are limits on foreign equity participation.
A recent survey by the region’s foreign investors’ councils also identified key constraints: complex regulations, limited legal predictability, restricted access to financing, infrastructure shortages, and trade and customs barriers.
Combined with a lack of information about project viability, these factors limit multinational companies’ ability to expand their operations in the region. Major infrastructure projects are also hindered by a shortage of long-term financing and underdeveloped capital markets.
Experts’ recommendations
The authors believe the region needs to move beyond individual projects towards an integrated investment ecosystem. They identify five priorities.
The first is to bring investment regimes closer together. This would involve greater alignment in investor protection, public-private partnership regulations, business registration, licensing and selected standards.
Such measures should reduce compliance costs and make cross-border investment more predictable. The experts also believe that the region’s countries adopting international practices for resolving investment disputes would strengthen their investment regimes.
The second priority is to establish an open register of cross-border projects, providing clear information on their readiness, regulatory status, financing structures and investment requirements.
The third is to expand access to long-term and innovative financing through public-private partnership mechanisms, sustainable debt financing, green bonds and other instruments. These could make projects more attractive to banks and help mobilise private and foreign capital.
The fourth priority is to improve regional connectivity and facilitate trade through investment in transport, logistics, digital infrastructure and agricultural value chains. Harmonising customs procedures, standards and digital systems would also help reduce border delays.
The fifth is to strengthen coordination of investment policies. The Regional Alliance of Foreign Investors Councils of Central Asia and the Caucasus (RAIC-CAC) could serve as a platform for this cooperation.
According to the authors, the alliance would enable countries to exchange experience in implementing reforms, monitor progress in regulatory alignment, maintain a regional register of investment projects and coordinate their engagement with international investors and development partners.
The ADB experts conclude that Central Asian and Caucasus countries have the resources, geographical advantages and emerging opportunities needed to attract investment.
The priority now, they say, is to establish the political, financial and cooperation mechanisms required to turn these opportunities into viable projects and channel more foreign direct investment into diversified and sustainable growth.
