World Bank Approves $600M Loan to Support Kazakhstan’s Economic Reforms

The Development Policy Operation aims to accelerate reforms that position the private sector as the primary driver of job creation in Kazakhstan.

The World Bank’s Board of Executive Directors has approved a $600 million loan to support Kazakhstan’s ongoing economic reforms aimed at strengthening private-sector-led growth, creating better-paid jobs, and improving economic resilience.

The financing, provided through the International Bank for Reconstruction and Development (IBRD), supports the Second Inclusive and Sustainable Economic Growth Development Policy Operation (DPO), part of a broader reform program designed to diversify Kazakhstan’s economy and promote sustainable development.

Supporting Kazakhstan’s Long-Term Reform Vision

The new loan aligns with several key national strategies, including:

• Kazakhstan 2050 Strategy

• National Development Plan (2025–2029)

• Low Emissions Development Strategy

It also supports the World Bank Group’s Country Partnership Framework, which focuses on boosting productivity, expanding economic opportunities, and ensuring that economic growth translates into quality jobs across regions and population groups.

“Kazakhstan has an ambitious reform agenda, and we are happy to support the country’s efforts to modernize key sectors, mobilize private investment, and enhance resilience, especially for the most vulnerable,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan.

Strengthening Private-Sector-Led Growth

The Development Policy Operation aims to accelerate reforms that position the private sector as the primary driver of job creation in Kazakhstan.

Key reform priorities include:

• Reducing market distortions and improving competition• Expanding access to finance for businesses• Encouraging private investment across key sectors• Improving productivity and economic diversification

These reforms are designed to help Kazakhstan transition from a resource-dependent economy toward a more diversified and innovation-driven growth model.

Energy and Climate Reforms

Energy sector reforms are a central part of the program, focusing on improving efficiency and sustainability.

The reforms aim to:

• Strengthen energy pricing mechanisms

• Improve efficiency in electricity and heating systems

• Expand renewable energy generation

• Reduce carbon emissions under the country’s Low Emissions Development Strategy

These measures are expected to attract new investment while supporting Kazakhstan’s transition toward a lower-carbon energy system.

Digital Transformation and Connectivity

The program also promotes digital development and connectivity, which are seen as critical drivers of productivity and economic modernization.

Reforms are expanding broadband access across the country while strengthening data protection frameworks and digital infrastructure.

Improved connectivity is expected to enhance access to services, support innovation, and enable businesses to operate more efficiently.

Improving Access to Finance for Businesses

Another key focus of the reforms is improving financing opportunities for small and medium-sized enterprises (SMEs).

By strengthening financing instruments and financial sector policies, the program aims to:

• Expand entrepreneurship opportunities• Improve business access to capital• Support job creation across emerging industries

Strengthening Social Protection and Inclusion

In addition to economic reforms, the program includes measures to enhance social protection systems and regional development initiatives, ensuring that economic growth benefits vulnerable communities.

Efforts include:

• Expanding access to social assistance programs• Supporting regional development strategies• Improving water resource management and conservation

These initiatives are designed to build resilience among low-income households and communities facing economic or environmental challenges.

Early Results from Reform Efforts

Initial outcomes from ongoing reforms are already emerging.

The government’s tariff-for-investment program is improving the financial sustainability of electricity and heating companies, helping attract new private investment in energy infrastructure.

Meanwhile, digital reforms have broadened internet connectivity, and enhanced financial tools are helping SMEs secure capital to expand operations and create jobs.

Building a Resilient and Inclusive Economy

The approved loan represents the second operation in a programmatic series of World Bank support designed to help Kazakhstan strengthen its economic foundations and ensure long-term sustainable growth.

By combining economic diversification, private investment, digital modernization, and social inclusion, the reforms aim to build a more resilient and dynamic economy capable of generating quality employment opportunities for the country’s population.