AIIB Allocates US$173.4 Million for Reconstruction of Local Roads in Karakalpakstan and Khorezm Region

Tashkent, Uzbekistan (UzDaily.com) — The Asian Infrastructure Investment Bank (AIIB) has approved financing of US$173.4 million for a project to reconstruct the network of local roads in Karakalpakstan and Khorezm region.

The funds will support the Government of Uzbekistan’s strategy to enhance transport connectivity, improve access to services, and strengthen climate resilience in the country’s western regions.

As part of phased financing, AIIB and the Government of Uzbekistan signed a loan agreement of US$71.1 million for the first phase of the project, which involves reconstructing local roads in the Khorezm region. The second phase will be implemented in the Republic of Karakalpakstan.

Overall, the project covers the rehabilitation and modernization of 516.1 km of local roads: 16 sections totaling 188 km across nine districts of Khorezm region and 23 sections totaling 328.1 km across 14 districts of Karakalpakstan. The works will improve public access to markets, medical and educational institutions, and other social services.

“This project is a clear example of how AIIB promotes the development of inclusive and sustainable infrastructure in its member countries,” said Konstantin Limitovsky, Head of AIIB’s Investment Division. “Together with the Government of Uzbekistan, we are developing a phased investment plan that will enhance regional connectivity, improve resilience to climate risks, and unlock new economic opportunities for millions of people.”

The project will benefit over 3.8 million residents of the country’s western regions, enhance road safety, expand access to markets and social services, and strengthen population mobility. The use of climate-resilient solutions, digital monitoring tools, and a focus on engaging women and youth makes this initiative an important step toward achieving national goals for sustainable and balanced regional development.

Uzbekistan is a founding member of AIIB and one of its most active partners in Central Asia, with a growing portfolio of projects in transport, energy, water supply, and urban infrastructure.