The EU announced today a €12 billion (US$13.2 billion) investment package for critical infrastructure, raw materials supply chains, and energy projects across Central Asia.
The ambitious funding initiative is part of the EU's Global Gateway strategy and will strengthen connectivity and economic ties with Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.
The funding is expected to support transport corridors, digitalisation efforts, and green energy initiatives, as the EU seeks to reduce reliance on traditional supply chains.
European Commission officials described the initiative as a "turning point" in relations with Central Asia.
Over recent years, the bloc has been improving relations with the region. Last September, the EC-funded EIT RawMaterials inaugurated a inter-regional centre in Istanbul. Central Asia comes with a dual pronged benefit to the EU; it is both an attractive diversification partner, due to its unexploited mineral wealth, and an alternative transport route for minerals imported from China.
The announcement has been met with cautious optimism by Central Asian governments, which have long sought increased foreign investment to modernise infrastructure and diversify their economies.
In a joint declaration following the First European Union-Central Asia Summit today, Kazakh officials welcomed the investment, particularly in renewable energy and mining. Uzbekistan, which has been aggressively reforming its economy, expressed interest in leveraging EU funds to advance digital connectivity and industrial expansion.
Global competition
The funding also arrives amid a backdrop of growing competition between global powers in the region. China has already established economic ties through its Belt and Road Initiative (BRI), while Russia remains a key security actor, especially for countries like Kazakhstan. As a result, the success of the EU's investment will depend on its ability to position itself as a reliable partner that complements, rather than competes with, existing initiatives.
Historically, EU involvement in Central Asia has been limited to trade and diplomatic relations rather than large-scale investments. However, the geopolitical landscape has shifted in recent years.
The Russia-Ukraine war saw EU supply chains severely disrupted and heightened the EU's urgency to secure alternative sources of critical raw materials. Central Asia has emerged as a key region in Europe's economic calculus.
"The disruption of global supply chains following the Russia-Ukraine conflict has, however, underscored the strategic importance of Central Asia and the Caucasus, prompting the EU to diversify its sources of critical raw materials and mitigate geopolitical risks," said Leyla Berber, chairperson of Tethys Trans-Eurasian Gateway and director of the EIT Centre in Istanbul.
Creating a link
Berber's work bridges European and regional economic interests. She emphasised that Türkiye and Azerbaijan play pivotal roles in ensuring the success of the EU's investment.
"Turkish companies, in particular, possess extensive local experience and currently rank second only to China in private investments across Central Asia, covering sectors such as construction, energy, tourism, and mining," Berber said. "To maximise the effectiveness of the EU's investment, European firms should collaborate closely with Turkish and Azerbaijan businesses, bridging existing financial access gaps and promoting sustainable, long-term projects."
Such partnerships, Berber argues, would bridge financial access gaps and create sustainable, long-term projects rather than short-term infrastructure initiatives.
Berber advocated for expanding the EU's focus beyond traditional infrastructure models, with a focus on integrated economic corridors between Central Asian countries, rather than mere transportation routes.
"These should not merely serve as transit routes for raw materials but function as comprehensive economic hubs that include renewable energy production, industrial parks, logistics centers, and technological innovation clusters," Berber said.
She pointed to the Middle Corridor, a key segment of the Trans-Caspian International Transport Route, as a prime candidate for such an economic hub. The corridor connects Europe to China via Türkiye and the Caspian Sea and has the potential to become a backbone of regional economic integration, according to Berber.
"Establishing dedicated renewable energy corridors to supply mines with solar and wind energy will significantly reduce the carbon footprint of mining activities, aligning with the EU's green transition objectives," she added.
Value addition
She further emphasised that investments in local refining and processing facilities could enhance economic self-sufficiency in the region.
"Investments must also support the establishment of regional refining and processing plants. Rather than exporting raw materials directly, local processing will enable Central Asian countries to move up the value chain, benefiting their economies while providing Europe with refined, higher-value materials."
The private sector imperative
Berber said that a private-sector-driven approach could help the EU draw on lessons from previous investments under the Global Gateway strategy, particularly in Africa.
"Past experiences from EU initiatives under the Global Gateway in Africa have demonstrated limited success in achieving tangible economic outcomes. Therefore, it is vital that the EU's Central Asian strategy emphasises private-sector-driven investments rather than merely providing government-to-government loans through development banks."
"Effective Public-Private Partnership (PPP) models involving experienced Turkish companies should form the cornerstone of the EU's investment approach to ensure lasting, sustainable economic impact."
As the EU rolls out its investment, all eyes will be on how effectively it adapts to the realities of the Central Asian market. Whether it can forge meaningful partnerships and deliver lasting economic benefits remains the key question in this ambitious undertaking.