TURKMENISTAN - EBRD: COOPERATION IN THE TRANSITION TO A MARKET ECONOMY

Since the first years of independence, Turkmenistan has consistently developed cooperation with international financial institutions to attract investment in the economy and support priority development areas. In particular, long-term cooperation links the country with the European Bank for Reconstruction and Development (EBRD), which this year also celebrated its 30th anniversary. The bank was established in April 1991 and is the largest investor in the region.

As stated on the EBRD website, the Bank is committed to promoting the transition to a "market-oriented economy and the development of private and entrepreneurial initiative." The EBRD sees this as its guiding principle and mission for the future, having established itself as an expert in open market transitions and an investor in entrepreneurial projects. The EBRD is currently active in more than 30 countries from Central Europe to Central Asia, in the countries of the Southern and Eastern Mediterranean. Since its establishment in 1991, the Bank has implemented over 5,200 projects.

Through its investments, the EBRD promotes: structural and sectoral reforms; development of competition, privatization and entrepreneurship; strengthening financial institutions and legal systems; developing the necessary infrastructure to support the private sector; introduction of a reliably working corporate governance system, including for the purpose of solving environmental problems.

In 1994, the EBRD signed an agreement with the Central Bank of Turkmenistan (CBT) to open a credit line for financing medium and small enterprises in the amount of $ 35 million. In the first few years of the EBRD's work in Turkmenistan, 110 loans totaling about $ 7 million were allocated for the development of small and medium-sized businesses. The projects financed were mainly related to the production of food, furniture, transport services, tourism and trade.

Over the years, the number of regional enterprises in the EBRD's investment program has increased. Entrepreneurial projects were financed not only in the capital, but also in the cities of Dashoguz, Mary, Turkmenabat, Turkmenbashi. At the same time, the target group of the EBRD program is small and medium-sized enterprises, as well as individual entrepreneurs engaged in trade, services, construction and production. Overall, since its inception in Turkmenistan, the EBRD has invested € 293 million in 80 projects across a wide range of sectors.

In today's realities, the European Bank for Reconstruction and Development seeks to support private enterprises in Turkmenistan affected by the COVID-19 pandemic. As the press service of the EBRD reported on August 31, a loan of $ 2.5 million was allocated to the Turkmen agro-industrial company Parahat to replenish the necessary working capital and increase operational efficiency, expand the range of products and strengthen export potential.

Ogulgozel Rejepova

Turkmenistan - EBRD: Cooperation in the Transition to a Market Economy