The World Bank’s Board of Executive Directors has approved USD 120 million for the Kyrgyz Republic project to develop a sustainable finance market for micro, small, and medium enterprises (MSMEs), alongside USD 50 million in co-financing from the Asian Infrastructure Investment Bank for total funding of USD 170 million. The initiative is designed to expand green finance for MSMEs, mobilize private capital, and strengthen the capacity of local financial institutions. The project has two components. First, it will provide wholesale financing through participating financial institutions to support MSME lending for green and sustainable investments, and support the establishment of a government-led Green Finance Fund, prioritising areas such as energy efficiency and renewable energy. Second, it will introduce a green guarantee mechanism via the Guarantee Fund to provide partial credit guarantees to financial institutions lending to MSMEs, aiming to reduce lender risk and improve access to finance for green projects; the package is expected to mobilise up to USD 148 million in private sector investment over the next five years. The World Bank financing is provided through the International Development Association as a zero-interest, shorter-maturity loan with repayments spread over six years, and the project is set to run through December 2030.

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