The Growing Role of the Eurasian Development Bank

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We examine the future prospects for the EDB as Russia reduces its shareholding 

By Farzad Ramezani Bonesh


The Eurasian Development Bank (EDB) is an international financial institution that was established by Russia and Kazakhstan in 2006. They were subsequently joined as members by Armenia and Tajikistan in 2009, Belarus in 2010, and Kyrgyzstan in 2011. The head office of this bank is in Almaty and there are branches in member countries.

In the past year, with the redistribution of EDB’s legal capital among member countries, Russia’s share decreased to about 44%. The share of Kazakhstan is about 32%, the share of Belarus is about 5%, and the share of Armenia, Tajikistan, and Kyrgyzstan is each more than 4%. The decrease in Russia’s shareholding took place under the threat of Western sanctions upon the EDB should Russia remain the majority stakeholder.

The EDB has been working to strengthen and expand economic relations and the comprehensive development of members for more than 17 years. With charter capital totaling US$7 billion, the EDB has undertaken projects mainly in transportation infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering.

Knowing the priorities of each member country and paying attention to its economic needs and banking resources, this bank has specified priorities for investment areas such as infrastructure, transportation, water and electricity, chemical and petrochemical industries, machinery, metallurgy, and mining, oil and gas, and information technology.

In this framework, EDB has taken important steps in helping sustainable economic development and growth, expanding trade-economic relations, and improving energy efficiency in member economies.

With that as a focus, the EDB has pursued strategic goals such as financing and financial support for national projects; supporting production projects; developing partnerships and alliances to attract additional resources, with more than US$6.9 billion invested thus far.


The EDB has invested, by the end of 2022, some US$4 billion in Kazakhstan, including 88 projects such as the international airport in Turkistan City, construction of solar power plants, and new logistics routes. By the year end, EDB had exceeded all planned goals for Kazakhstan, while the investment volume increased 5 times compared to 2021.


EDB’s investment in Tajikistan has also contributed to the development of the green economy, the industrialization of the social sphere, and the increase in the volume of the country’s exports.


Apart from financing the construction of 11 solar power plants in Armenia, EDB helped attract US$150 million in investment with a tripartite memorandum of understanding including Azerbaijan and Russia. In fact, from EDB’s point of view, these projects will have a significant positive impact on the social and economic growth of the member countries.

EDB Status

In terms of legal status, this bank is an international organization and is considered an observer in the United Nations General Assembly. Also, EDB is increasing interaction with institutions and organizations, including the Shanghai Cooperation Organization, the Organization of the Commonwealth of Independent States; United Nations institutions (UNIDO, FAO), World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank and others.

Additionally, EDB’s approach such as investing US$600 million in renewable energy projects of the member states is based on the United Nations Sustainable Development Goals.

EDB has contributed to the development of the market economy, economic growth and the expansion of trade-economic relations, the modernization and diversification of the economy, and the positive effects of convergence and social and economic countries with the help of the performance records of regional and international development banks. Or through approaches such as providing information about the economic legal environment of the member states, it has helped the better knowledge for investment in these countries.

Compared to other commercial banks with advantages such as granting long-term loans (up to 25 years), EDB has tried to be useful in financing the member states, by creating grace periods for interest payments, supporting exports, and attracting additional financial resources for important strategic projects.

In fact, now EDB claims to become an important regional development bank, while trying to play an important role in solving the current problems of Eurasian countries, by supporting its members, opening additional lines to provide liquidity, participating in complex and long-term projects, managing investment risk, supporting integration plans, and providing technical assistance.

The banks supporters believe that while in practice, Western or global multilateral development banks have not helped developing countries and emerging economies, more than 100 projects planned by EDB to be implemented before 2030 show the effort of this institution for further development of its Eurasian members. Also, EDB’s effort to remove the limits of the bank’s assets in accordance with the European Commission’s clarification shows the seriousness of this institution in overcoming challenges such as anti-Russian sanctions.

The EDB Vision

Meanwhile, EDB is facing challenges such as limited access, lower credit rating, and small paid-up capital compared to other development banks, lower operational efficiency of the bank, a lack of full inclusion of the Eurasian geographical space (15 former Soviet republics), differences in the economic level of member countries, and low volume of intra-regional trade.

In another dimension, it should be noted that the future of the Eurasian Economic Union (EAEU) is closely related to the EDB. In the meantime, the Ukraine crisis and how to solve this problem will affect the future direction of the Eurasian Economic Union (EAEU) and EDB. Finding solutions to the challenges posed by recent international sanctions against Russia is also important. The problems in providing investment and limited access to advanced technology continue to limit the activity in Russia and Belarus in 2023.

However, despite the trends in the global economy such as record inflation, the increase in central bank interest rates in developed countries, and the weakening of global business activity, EDB’s strategy for 2022-2026 can help maintain the bank’s competitiveness and increase its role in Eurasia.

It is also likely that in accordance with EDB’s strategy of financing projects, stimulating the attraction of private and strategic investments, and promoting the “green” economy, food security, and infrastructure projects will become more commonplace in terms of the EDB activities.

In the past, several other countries have expressed interest in joining the EDB. There have already been efforts to attract new participating countries. Also, investment-trade relations between Eurasia-Central Asia, East Asia, and the Middle East-Persian Gulf are increasing.

Also, the increasing presence of the bank in research and applied activities, reports and recommendations on member states, hosting conferences, focusing on environmental and renewable energy projects, participating in the development of transportation corridors, and identifying priority sectors of countries can increase the bank’s role in the region.

The expansion of the Eurasian direction of Russia’s foreign policy and paying more attention to the future of the Eurasian Economic Union (EAEU), the conclusion of numerous EAEU preferential trade or free trade agreements with other countries, also allow new opportunities to be created for EDB.

Also, the more than US$80 billion in the mutual trade volume of the Eurasian Economic Union in 2022, structural changes in the global economy, the shift of the global center of economic activity to Asia and the Asia-Pacific region, and the increase in foreign trade turnover with this region are all in favor of EDB development.

In the meantime, implementing priority infrastructure projects, attracting new shareholders, forming a Eurasian payment system instead of SWIFT, increasing capital, increasing remittances, and more cooperation with third countries such as China, India, and ASEAN countries can help to increase the role of EDB. Apart from strengthening the bank’s role in the EAEU, the development of EDB digital projects, and increasing operations in shareholder countries to 2026 can practically bring to fruition an investment portfolio of about US$10 billion and a further 90 projects being financed.

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