Mining, in particular gold extraction, remains a politically sensitive area but one of the most attractive to foreign investors due to the market opportunity – the largest gold mine (Kumtor) produced close to 556,375 ounces or 17,305 kilograms of gold in 2022. Central Asia, including the Kyrgyz Republic, also holds significant deposits of minerals needed for clean energy technology.[1] Domestic and foreign-owned mining companies also regularly need equipment, servicing, and replacement parts, and U.S. firms enjoy the reputation as providing the highest quality services and equipment. Still, investors should be aware the host government seized control over Kumtor gold mine in 2021, and in April 2022 reached an agreement to end the decades-long presence of Centerra Gold, a Canadian company. Natural resources are considered national resources and foreign firms have faced stiff scrutiny and opporsition from the public and the government in the past.
There is strong demand for information and communications technology (ICT or IT) services in both public and private sectors in the Kyrgyz Republic. Opportunities include software and service provision (including cloud storage) to the government, sales of IT equipment including construction of broadband and wireless internet infrastructure, cybersecurity solutions, and other services associated with digitalizing services that previously took place in person. The Kyrgyz government formed a Ministry of Digital Development in 2021 and established preferential tax regimes through a “High Tech Park’ and “Creative Industires Park” in 2011 and 2023 respetively. The government is actively seeking partners to help digitize citizen services across the country.
Energy, in particular hydropower, is a priority sector for the government as it seeks outside investment to develop small hydropower plants and modernize existing large hydropower plants. Solar, geothermal, and biomass are nascent markets. Solar is the most developed of the three, with major solar farm projects announced but still seeking financing. Electric vehicles (e-vehicles) are gaining popularity and enjoy several tax breaks for their importation.
Banking presents another opportunity for U.S. companies. Correspondent accounts are in demand from Kyrgyz banks and businesses, and the government has worked with foreign banks to develop plans for sovereign bond issuances. The market demand is now greater since the further Russian invasion of Ukraine in 2022 has led businesses to shift their banking operations to avoid running afoul of international sanctions.
Other leading sectors with opportunities for U.S. companies and investors include aviation, agriculture, franchising and distribution, and textiles (garment manufacturing). See the Leading Sectors for U.S. Exports and Investment for more information.
[1] https://www.sciencedirect.com/science/article/pii/S2590332221006606#fig1