Tashkent, Uzbekistan (UzDaily.com) – Interview with Igor Popkov, Senior Investment Specialist at the Asian Infrastructure Investment Bank (AIIB).

Igor specializes in sovereign and private sector financing in Central Asia and the Caucasus, leading full project development cycles. In his role, he not only cultivates and enhances client relationships but also optimizes team efforts to achieve significant sustainable development outcomes.

AIIB is an international financial institution focused on creating "green" infrastructure, including communications and technological innovations. Uzbekistan is a founding member of the Bank, with substantial projects already implemented in energy, water supply, transport, and healthcare amounting to over US$3 billion. In September this year, Samarkand will host the annual AIIB meeting for the first time in Central Asia.

- Good day, Igor! Thank you for agreeing to this interview. Today, we would like to discuss the electrification project of the Bukhara-Miskin-Urgench-Khiva railway, funded by AIIB. Could you please elaborate more on this project?

The electrification project of the Bukhara-Miskin-Urgench-Khiva railway involves electrifying 465 kilometers of track and launching high-speed rail services on the existing line. This route will connect the remote Khorezm region and Western Uzbekistan with its Central and Eastern parts, enhancing railway connectivity and supporting trade and tourism development in Khorezm.

The total project cost amounts to US$445 million USD, of which AIIB provides US$162 million USD. AIIB will contribute US$108 million, with the remaining amount financed by Uzbekistan Temir Yullari and the Government of Uzbekistan. Uzbekistan Temir Yullari, one of the region’s largest companies with extensive experience in implementing ambitious investment programs, is a strategic infrastructure client of AIIB, and we look forward to supporting the development of the national railway system within this and future projects.

AIIB approved this project in January 2022, and the loan agreement was signed in March 2022 during the Tashkent International Investment Forum. Subsequently, nearly two years were dedicated to active preparation, rigorous scrutiny, and procurement procedures. Currently, the project is in the implementation phase, with the loan in the disbursement stage, and related project works are ongoing.

- Why did you decide to support this project? What impact could it have on the region and Uzbekistan as a whole?

I would like to start with my personal experience of traveling between Bukhara and Khiva. About 15 years ago, I visited Uzbekistan as a tourist and planned to explore Bukhara and Khiva. Upon reaching Bukhara, I realized that there was hardly any established transport link between Bukhara and Khiva, and air travel required transfers.

The passenger train operated only once a week, making it an unreliable option, not to mention the travel time. Buses were also quite old and prone to breakdowns, which would have been catastrophic. Therefore, I opted for a taxi, which took me about 10 hours to cover the 450 kilometers, with the road being in rather poor condition.

Imagine how excited and happy I was in early 2020, becoming the head of the project team and getting the opportunity to work on creating a fast, reliable, and sustainable rail link between Bukhara and Khiva. For me, it was truly a dream come true.

The project is an excellent example of strengthening regional connections. The railway line, a significant part of Uzbekistan’s existing railway network, runs through an international corridor vital for trade, linking East Asia with Central Asia and Europe. The project will improve Uzbekistan’s cross-border connectivity with neighboring countries. This project complements AIIB’s current investments in developing local transport infrastructure in central and western regions of Uzbekistan.

Additionally, this project is a great example of how AIIB, together with other development partners, contributes to the "green" agenda and supports participants’ efforts to meet commitments under the Paris Agreement. Electrifying the railway will enhance this environmentally friendly mode of transport, transitioning the railway line from diesel to electric power, and more transport will shift from roads to railways. According to our estimates, this will reduce greenhouse gas emissions by more than 80,000 tons annually.

- How long will the journey from Bukhara to Khiva take once this project is completed? And when is the full electrification of the railway expected to be completed?

The high-speed service will reduce travel time from Bukhara to Khiva to just three hours, compared to over five hours currently. Moreover, the journey from Tashkent to Khiva will take about seven hours. Thus, for tourists, this means that this distance can be covered in just one day.

We are already at an advanced stage of preparation, and many works, as I mentioned earlier, are still ongoing. But we expect that construction will be completed by 2026.

- How will this impact tourism flow and freight transportation in Uzbekistan?

One of the key components of the project is supporting tourism development. This includes not only the infrastructure needed for electrifying the line and launching high-speed rail services but also initiatives to develop tourism along the route. Various activities will be conducted under the project, including training station staff for businesses that can be created near stations and major stops along the route.

We expect annual passenger traffic to increase from approximately 280,000 passengers to over 1,000,000 passengers. Once this line is built, it will serve not only tourists but also the local population. Based on redevelopment forecasts, we expect a fairly rapid increase in passenger traffic.

We also expect a significant positive effect on the freight transportation industry. For example, we expect a 30% increase in freight traffic, which could reach around 12 million tons per year once the line is fully operational.

The project will also contribute to creating additional jobs, especially in tourist areas, and economic revenues will increase.

- Could you tell us if you encountered any challenges during the implementation of this project?

The project developed in quite challenging times, especially during the COVID-19 pandemic, which undoubtedly presented us with many obstacles. In addition, the project faced some challenges due to external geopolitical tensions. However, AIIB and Uzbekistan Temir Yullari demonstrated determination and persistence in supporting project implementation, enabling it to withstand all difficulties. We managed to find a flexible approach to implementation, and I believe the project is now on the right track to achieving its development goals.

- Thank you for such a detailed overview of the project. We know you have visited Uzbekistan many times. What do you like about it, and how do you assess the country’s potential?

Uzbekistan is a country with very open and hospitable people, plenty of sunny days, and amazing cuisine. Uzbekistan offers a unique Eastern charm and provides an opportunity to explore its rich history.

Today, the country is developing dynamically and rapidly, offering broad opportunities for both local and international investors. The young population, eager to explore new opportunities and build their bright future, is full of positive expectations and hopes associated with the country’s development.

There are plenty of infrastructure opportunities thanks to Uzbekistan’s rich solar and wind resources.

Due to its strategic location at the crossroads between Europe and the rest of Asia, I see our role as a development multilateral institution in focusing on the most important and high-quality initiatives to help it develop sustainably.

- This year, AIIB will hold its 9th annual meeting in Uzbekistan. Given the challenges facing the region in water supply and communications, how important do you think this annual meeting is for Uzbekistan and the region as a whole?

The AIIB session will be held later this year in Samarkand. This underscores the Central Asian region’s importance to both AIIB and Uzbekistan. The Bank will hold its main event in Central Asia for the first time, providing an excellent opportunity for the Bank’s leadership, shareholders, and clients to come together and discuss cutting-edge priorities and agendas.

As a member of the investment operations team, I pay special attention to this region. I look forward to the emergence of new exciting infrastructure projects in Uzbekistan and, of course, in the Central Asian region as a whole.