ADB Approves $70 Million Loan to Strengthen Kyrgyz Economy

The new funding builds on the first phase of the programme approved in 2024 and supports wider reforms designed to create a more efficient and accountable public sector while improving the country’s long-term economic resilience.

The Asian Development Bank (ADB) has approved a $70 million concessional loan to support the Kyrgyz Republic's efforts to strengthen fiscal resilience, improve transparency, and modernize the management of public resources. The financing will support the second phase of the Sustainable Fiscal Management and Governance Improvement Program, helping the government introduce reforms that improve financial stability and strengthen public institutions.

Reforms to Modernize Tax and Public Financial Systems

ADB Country Director for the Kyrgyz Republic Zheng Wu said the programme marks an important step toward building a stronger economy by improving the governance of state-owned enterprises and modernizing tax administration. He said these reforms will create a more transparent and predictable environment for businesses, investors, and citizens.

Although the Kyrgyz Republic has experienced solid economic growth in recent years, it continues to face challenges from external economic shocks, fiscal pressures, and the growing impact of climate-related risks. The latest phase of the programme will strengthen legal, regulatory, and institutional frameworks covering public financial management, state-owned enterprise governance, tax administration, and anti-corruption measures.

The reforms will introduce a unified system for programme-based budgeting, medium-term expenditure planning, and performance monitoring, allowing public spending to be managed more effectively and linked more closely to development priorities.

Digital Tax Tools to Support Businesses

A major part of the programme focuses on modernizing the country's tax administration through greater use of digital technology. New tools will improve tax audits, strengthen the tracking and prevention of illicit financial flows, and simplify tax procedures for small businesses.

The reforms are expected to make it easier for entrepreneurs to comply with tax requirements while creating a fairer and more transparent business environment. Small enterprises, particularly those led by women, are expected to benefit from simpler administrative processes that reduce compliance costs and support business growth.

By strengthening public financial management, improving governance, and expanding the use of digital systems, the programme is expected to help the Kyrgyz Republic build a more resilient economy that can better respond to future financial and environmental challenges.