Member Fact Sheet, April 2022

ADB's Work in Turkmenistan   Download Fact Sheet

Turkmenistan’s economic growth had averaged 6% annually from 2015 to 2019, with public investment and gas exports as major growth drivers. The growth in 2020 decelerated due to a shrinking regional demand and declining prices for energy products triggered by the global economic slowdown and disruption caused by the coronavirus disease (COVID-19) pandemic. The economy recovered in 2021 due to an increase in hydrocarbon output and exports and pick up in investments, and is projected to reach 6% growth in 2022. Greater investments in the sustainable productive sectors and enhanced support for human development will help contribute to the country’s projected growth recovery.

ADB has been a long-standing partner of the Government of Turkmenistan, providing assistance crucial to the country’s development needs. The bank’s support program is aligned with the National Strategy for Social and Economic Development of Turkmenistan 2011–2030 and the government’s Development Program 2019–2025, with annual lending averaged at $167 million over 2018–2020.

To date, ADB has committed 13 public sector loans and technical assistance totaling $631.6 million to Turkmenistan. Cumulative loan disbursements to Turkmenistan amount to $312.7 million. These were financed by regular ordinary capital resources. ADB’s ongoing sovereign portfolio in Turkmenistan includes 1 loan worth $500 million.

In 2020–2021, ADB approved a total of over $5.6 million in technical assistance, including a $480,000 grant to help procure COVID-19 testing kits.

Several technical assistance grants aimed at preparing bankable projects in health, energy, and transport sectors are being implemented. For example, a $750,000 grant is helping process a project that will enhance the quality of health care by training nurses and paramedical workers—a need highlighted during the COVID-19 pandemic.

A technical assistance to introduce international financial reporting standards in selected commercial banks has helped these banks to develop methodologies for adequately provisioning their credit risk exposures. Another technical assistance, financed by the Japan Fund for Poverty Reduction, will help strengthen the institutional capacity for policy formulation and implementation.

Ashgabat is the capital and largest city of Turkmenistan. At night, the city is illuminated in various colors. Photo: ADB

Operational challenges. Quasi-fiscal activities of state-owned enterprises in Turkmenistan are largely uncompensated. This, coupled with governance shortcomings, makes it challenging to develop projects in sectors providing hard infrastructure services. At the same time, to have public investments (including the debt-financed) generate higher rates of return necessitates, among others, strengthening human capital and furthering a business-friendly environment. ADB supports the government in its aspirations for better economic policy management and infrastructure governance.

Knowledge Work

Knowledge-sharing events were conducted including workshops for government officers on macroeconomic management, System of National Accounts statistics, Turkmenistan’s accession to the World Trade Organization, and regional cooperation themes under the Central Asia Regional Economic Cooperation Program such as energy, trade, transport, infrastructure, and economic and financial stability.

Financing Partnerships

Financing partnerships enable ADB’s partner governments or their agencies, multilateral institutions, and private organizations to participate in ADB projects. The additional funds may be in the form of loans and grants, technical assistance, and nonsovereign cofinancing.

Cumulative cofinancing commitments in Turkmenistan:

• Sovereign cofinancing: $2 million for 2 technical assistance projects since 2018

Future Directions

Over the next 2 years, ADB will start preparing the country partnership strategy (CPS) for Turkmenistan for 2024–2028. Most of the strategic thrusts in the current CPS are expected to remain, but with emphasis on combating climate change with low-carbon transition. The goal is to help Turkmenistan manage a green transition and safeguard its economy from the risks in moving toward a more diversified economy underpinned by stronger human capital, knowledge, and superior market institutions. ADB’s Energy Transition Mechanism launched at the UN Climate Change Conference (COP26) will be instrumental as it explores viable options from existing fossil fuels to cleaner energy with the least adverse impact on the economy