World Bank Approves $50M Grant to Boost Competition and Inclusion in Tajikistan

The World Bank’s Board of Executive Directors has approved the First Competitive and Inclusive Tajikistan Development Policy Operation (DPO) — a $50 million grant from the International Development Association (IDA) — to support a series of government-led reforms aimed at opening Tajikistan’s economy, fostering private sector growth, and strengthening public service delivery.

This DPO is aligned with the Tajikistan National Development Strategy 2030 and marks a significant step toward creating a more competitive, equitable, and transparent economic environment in one of Central Asia’s most strategically positioned but least diversified economies.

Focus on Structural Reforms for Market Openness

The financing will help implement a package of foundational reforms across key sectors:

• Telecommunications and Digital Services — enhancing competition and improving governance to boost connectivity, lower costs, and foster innovation.

• Civil Aviation — opening the air transport market to improve connectivity, encourage competition, and reduce travel costs.

• Foreign Investment — strengthening the legal framework to attract and protect investors, ensuring a level playing field.

• Subsidy Transparency — making subsidies to private investors more transparent to improve efficiency and accountability.

• Energy Sector — improving transparency in the allocation of funds within the power sector to create a more conducive environment for private investment, especially in renewable energy.

Wei Winnie Wang, Acting Country Manager for the World Bank Group in Tajikistan, emphasized the importance of these reforms:

“Fostering a more competitive and open market environment helps create new opportunities for businesses and consumers alike. These reforms are vital steps toward building a more dynamic, inclusive, and resilient economy in Tajikistan.”

Linking Growth With Social Protection

The DPO will also support the Benefit Sharing Program (BSP) connected to the Rogun Hydropower Plant (HPP) — one of Tajikistan’s flagship energy projects.

The BSP will channel a portion of Rogun’s electricity sales revenue to poor and vulnerable households, strengthening social safety nets and ensuring that economic benefits from major infrastructure projects reach marginalized communities. The DPO will help establish the policy, legal, and financial frameworks needed to ensure the BSP’s prioritization, transparency, and sustainability.

Why the DPO Matters for Tajikistan

Development Policy Operations are financing instruments designed to support policy and institutional reforms that foster sustainable growth and poverty reduction. For Tajikistan, where remittances account for a large share of GDP and the economy remains heavily dependent on a few sectors, such reforms are critical to diversify growth, boost competitiveness, and attract private sector investment.

This is the first DPO under the “competitive and inclusive” framework, following a previous DPO approved in 2023.

World Bank’s Broader Engagement

The World Bank currently finances 26 active projects in Tajikistan worth $1.9 billion in IDA grants and concessional credits. These projects span infrastructure, energy, agriculture, health, education, and social protection, with a strong emphasis on climate resilience and job creation.

“We are proud to support these ambitious reforms designed to unlock the country’s economic potential and deliver tangible benefits to Tajik citizens,” said Wang, reaffirming the Bank’s commitment to Tajikistan’s long-term development goals.

Next Steps

Implementation of the reforms supported by the DPO is expected to:

• Improve the ease of doing business.

• Reduce costs and barriers for entrepreneurs.

• Modernize critical infrastructure sectors.

• Strengthen social protection systems linked to the country’s energy wealth.

The World Bank says it will continue working closely with the Government of Tajikistan to ensure reforms are effectively implemented, monitored, and sustained — helping the nation move toward inclusive growth and the aspirations of its young and growing population.