World Bank Approves $200M Transport Project to Boost Jobs and Connectivity in Uzbekistan

The five-year project will focus on upgrading a critical section of the M41 regional road corridor, alongside broader reforms in the transport and railway sectors.

The World Bank has approved a $200 million investment to modernize transport infrastructure in Uzbekistan’s Surkhandarya region, a strategic move aimed at boosting jobs, improving regional connectivity, and strengthening the country’s position as a key transit hub in Central Asia.

The five-year project will focus on upgrading a critical section of the M41 regional road corridor, alongside broader reforms in the transport and railway sectors.

Transport Sector Growing—But Under Pressure

Uzbekistan’s transport sector already plays a vital role in the economy:

• Contributes nearly 8% of GDP

• Employs around 1 million people

• Improved ranking from 129th to 88th in the World Bank’s Logistics Performance Index (2014–2023)

However, rapid motorization is placing increasing strain on infrastructure:

• Vehicle growth is outpacing road capacity

• Freight volumes are projected to surge

• Road capacity will need to expand by around 500% by 2030

Without significant upgrades, these pressures could limit trade efficiency and economic growth.

Flagship Component: Upgrading the M41 Corridor

The project’s centerpiece is the reconstruction of a 91-kilometre stretch of the M41 highway, transforming it from a two-lane road into a four-lane highway.

This corridor is strategically important, linking Uzbekistan with:

• Tajikistan

• Kyrgyz Republic

• Afghanistan

Key expected impacts include:

• Benefits for 35,000 daily road users

• Improved access for around 550,000 residents in surrounding communities

• Creation of new jobs and businesses along the corridor

Infrastructure upgrades will include:

• Improved road surfaces and safety features

• Better-designed and accessible bus stops

• Construction and rehabilitation of around 180 bridges and drainage systems to withstand flooding

Safer, Faster, and More Reliable Transport

The upgraded road is expected to deliver major efficiency gains:

• Average speeds to increase from 65 km/h to about 90 km/h

• Reduced travel times and transport costs

• Improved road safety, lowering accidents and fatalities

• More reliable freight and passenger transport

These improvements are critical for facilitating trade and connecting remote regions to economic centres.

National Transport Strategy for Long-Term Reform

Beyond infrastructure, the project will support the Ministry of Transport in developing a National Multimodal Transport Strategy.

This roadmap will focus on:

• Integrating road, rail, and other transport modes

• Promoting data-driven decision-making

• Strengthening resilience to supply chain disruptions and climate risks

• Advancing lower-emission transport solutions without raising costs

The strategy is expected to guide future investments and reforms across the sector.

Railway Modernization to Attract Investment

The project also includes targeted support for O’zbekiston Temir Yo’llari JSC (Uzbekistan Railways), aimed at improving:

• Corporate governance and financial transparency

• Operational efficiency and service planning

• Adoption of environmental, social, and governance (ESG) standards

These reforms are designed to enhance the railway company’s performance and make it more attractive to private investors.

Driving Jobs and Regional Trade

Combined, the project’s components are expected to:

• Create new and higher-quality jobs across transport, trade, and tourism

• Increase passenger and freight volumes

• Boost transport sector revenues

• Strengthen Uzbekistan’s role as a regional transit hub connecting Central and South Asia

“Efficient and safe transport networks are essential to connect people to jobs and support trade,” said Najy Benhassine, World Bank Division Director for Central Asia.

A Strategic Investment in Connectivity and Growth

As Uzbekistan continues to position itself as a regional logistics and trade corridor, investments in transport infrastructure and institutional reform are becoming increasingly critical.

The World Bank-backed project reflects a broader strategy to align infrastructure development with economic transformation, ensuring that improved connectivity translates into jobs, business growth, and long-term competitiveness.