World Bank Approves $50 Million Grant for Tajikistan’s Economic Reforms

The World Bank’s Board of Executive Directors has approved a $50 million grant to support Tajikistan’s reform agenda, aimed at fostering competition, improving market conditions for the private sector, and strengthening public sector service delivery. The financing, announced by the Bank’s press service, comes from the International Development Association (IDA), its fund for low-income countries.

The First Competitive and Inclusive Tajikistan Development Policy Operation (DPO) aligns with the country’s National Development Strategy 2030. Its primary goal is to help implement key government policies for building a more competitive and equitable economy.

“We are proud to support these ambitious reforms designed to unlock the country’s economic potential and deliver tangible benefits to Tajik citizens,” said Wei Winnie Wang, Acting Country Manager for the World Bank Group in Tajikistan. “Fostering a more competitive and open market environment helps create new opportunities for businesses and consumers alike.”

The DPO targets several priority areas:

• Increasing competition and improving governance in telecommunications and the digital sector.
• Expanding air transport connectivity.
• Strengthening the legal framework for foreign investment.
• Enhancing transparency in subsidies and power sector financing.

By making energy sector funding more transparent, the reforms aim to encourage greater private investment in renewable energy.

Another focus is improving the policy, legal, and financial frameworks for the Benefit Sharing Program (BSP) under the Rogun Hydropower Plant (HPP) Project. The BSP will channel part of Rogun’s electricity sales revenue to support poor and vulnerable households, complementing existing social safety nets.

Development Policy Operations are one of the World Bank’s key tools for supporting policy and institutional reforms that drive sustainable growth and poverty reduction. The Bank last approved a similar operation for Tajikistan in 2023.

Currently, the World Bank finances 26 projects in the country totaling $1.9 billion, combining IDA grants and highly concessional credits.

As previously reported by The Times of Central Asia, poverty reduction in Tajikistan remains gradual. According to the World Bank’s Poverty, Prosperity, and Planet Report 2024, more than 25% of the population lives on less than $3.65 per day, even after the extreme poverty threshold was revised from $2.15 to $3.00.

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