IFC Backs $10 million to Highland Central Asia Fund to Boost SME Growth

SMEs play a central role in both economies, providing a large share of private sector employment and contributing significantly to local economic activity.

Small and medium-sized enterprises (SMEs) in Uzbekistan and the Kyrgyz Republic are set to benefit from increased access to long-term financing following a new investment by the International Finance Corporation (IFC). IFC has committed up to $10 million to Highland Central Asia Fund II, a private equity fund focused on supporting growing businesses across the two countries. The investment is expected to encourage job creation, strengthen private sector development, and help expand the region's emerging private equity market.

SMEs play a central role in both economies, providing a large share of private sector employment and contributing significantly to local economic activity. Greater access to investment capital is expected to help businesses expand operations, improve productivity, and create new employment opportunities.

Fund targets key sectors across two countries

Highland Central Asia Fund II is currently the only institutional private equity fund operating in both Uzbekistan and the Kyrgyz Republic. The fund is targeting a total size of $75 million and plans to invest in between 10 and 15 companies. The fund will focus on businesses operating in sectors such as healthcare, pharmaceuticals, food and beverage production, hospitality, consumer goods, logistics, retail, construction materials, and real estate. Highland Capital Co-founder Eldan Usubakunov said the expansion into Uzbekistan represents an important step for the company and the wider investment landscape in Central Asia. He noted that the fund aims to strengthen the private equity ecosystem while supporting economic growth in both markets.

Investment seeks to close financing gap

Private equity activity has remained relatively limited in Uzbekistan and the Kyrgyz Republic in recent years, leaving many growing businesses with few options for obtaining long-term investment capital. Highland Capital's first fund, launched in the Kyrgyz Republic in 2018 with IFC support, invested $21 million across 12 companies and helped create more than 900 jobs. IFC officials hope the new fund will build on that success.

According to IFC Global Director for Equity, Funds and Venture Capital Farid Fezoua, the investment addresses a significant financing gap facing SMEs in Central Asia. He said IFC's role as an anchor investor will help attract additional funding from other investors and development finance institutions while supporting business growth and job creation. Alongside the financial investment, IFC will provide advisory support to Highland Capital to strengthen fund management practices, improve value creation strategies, and support successful future exits. The initiative is expected to contribute to the development of a stronger and more sustainable private investment market across the region.