On June 18, a Kyrgyz bank signed a loan agreement with an Uzbek business under the auspices of a European Bank for Reconstruction and Development (EBRD) project designed to support loans for small and medium businesses.
A bank lending a business money is hardly cause for a headline. But this one is: It’s apparently the first time that the EBRD’s Risk Sharing Facility (RSF) program has facilitated an international financing agreement.
According to Demir Bank, one of Kyrgyzstan’s largest and most established financial institutions, its loan agreement with Ozone Fitness LLC, an Uzbek gym chain, “marks a significant milestone in regional cooperation.” The announcement doesn’t specify the loan amount.
The EBRD’s RSF program is specifically designed to share the risk of a transaction between a bank and a small business. The EBRD offers either direct funding – up to 65 percent of the partner bank’s sub-loan – or guarantees of the sub-loan up to that same level. The involved parties also benefit from the EBRD’s expertise, in the form of business advice and technical assistance.
The EBRD’s risk-sharing program had a banner year in 2025. According to the EBRD, the bank signed 31 risk sharing project agreements in Central Asia and Mongolia last year. Those agreements involved 26 companies and were valued at 28.5 million euro. But all of those agreements dealt with companies and banks within the same country: a privately owned railway operator in Kazakhstan landed a loan from a Kazakh bank; a Kyrgyz aluminum extrusion manufacturer settled a loan with a Kyrgyz bank; a ready-made meals and packaged food producer in Uzbekistan scored a loan from an Uzbek bank.
What’s new this time is the crossing of a border for a business deal.
Demir Bank is well-positioned for the project, having already established a representative office in Uzbekistan. The bank also has a long track-record with the EBRD, having been an EBRD client since 1997. This is far from the only recent deal.
On June 6, the EBRD announced that it would be providing $25 million in financing to Demir Bank to promote green lending and trade.
More broadly, the EBRD has directed a significant degree of attention to Kyrgyzstan. On June 19, construction of a wastewater treatment plant began in Naryn, a project supported by the EBRD (via a 2 million euro sovereign loan), Switzerland (3.6 million euro grant) and the EU (1 million euro grant). The EBRD is also organizing financing – up to 64 million euro – to support public utilities in Bishkek. According to the EBRD, it is “the first time that the Bank has financed a district heating project in the country.”
Next to these larger projects – focused on arguably critical issues of water and waste management, and energy – a loan for a gym chain may seem trivial. It’s not. For the last decade, Central Asia’s leaders have sung a consistent chorus of deepening regional cooperation. They’ve all but institutionalized annual leaders meetings, and frequently band together on the global stage. But pushing cooperation from the top does not always yield cooperation at the bottom.
If anything, this is the potential proof of a concept: The financial architecture in one Central Asian country can support businesses in another, and deem it a valuable endeavor to do so. What if it wasn’t a gym chain and instead a Tungsten processing plant? The entry of national economic and strategic interests – like critical minerals development – into the equation inarguably complicates such deals, as does state involvement. But 35 years after independence, it’s not so crazy a proposition.
