$760mn in ADB loans to Karakalpakstan: Where is the money going?

The Asian Development Bank (ADB) has more than $760mn in outstanding loans allocated to Karakalpakstan, funding projects aimed at improving drinking water access, upgrading roads and expanding renewable energy capacity in Uzbekistan’s northwestern region.

During ADB Days, held in Karakalpakstan on October 14–16, Daryo joined a media tour of several projects financed by the international lender, including water supply infrastructure in Nukus and Amudarya districts, a highway reconstruction project and the Nukus-2 wind power plant.

Karakalpakstan accounts for 20% of ADB’s loan portfolio in Uzbekistan

ADB has cooperated with Uzbekistan since 1995, providing more than $15bn in loans, grants, guarantees and technical assistance, according to information presented at the event. The funding has supported projects across several sectors, including water management, transport and energy.

More than 2.16mn people, or 5.5% of Uzbekistan’s population, live in Karakalpakstan. The region’s population is projected to grow by another 400,000 by 2050, increasing demand for infrastructure and public services.

Kanokpan Lao Araya, director of ADB’s representative office in Uzbekistan, said the bank’s loan portfolio in Karakalpakstan accounts for 20% of its total lending portfolio in the country.

Five projects are currently being implemented directly in Karakalpakstan in road construction, energy, water supply and agriculture, while the region also benefits from seven other projects covering Uzbekistan.

Water management remains a major challenge. Experts at the event highlighted the deterioration of irrigation infrastructure inherited from the Soviet era, much of which was designed around cotton cultivation. Ageing canals and distribution systems contribute to significant water losses, while climate change is expected to intensify water shortages.

The region also faces pressure on its education and healthcare infrastructure. At Karakalpak State University named after Berdakh, for example, around 28,000 students study in four shifts, with classes running until 9 p.m. The university’s rector said the institution was originally designed to accommodate just 5,000 students.

Bringing drinking water to thousands of households

One of the major ADB-supported initiatives aims to expand access to clean drinking water across Karakalpakstan.

Under a presidential decree issued in April 2019, projects were launched to improve water supply in Amudarya, Beruniy, Karauzyak, Kungrad, Nukus and Muynak districts. Uzbekistan signed a $145mn loan agreement with ADB to support the initiative, which is scheduled to run from 2019 to 2026.

The projects are expected to provide a reliable supply of clean drinking water to 326,000 residents.

Nukus district: Water access rises to nearly 90%

The media tour began in Nukus district, where 31,100 residents across 35 settlements recently gained access to centralized drinking water for the first time.

The $11.4mn project involved reconstructing the Madaniyat, Abadam and Kerder water distribution facilities and building nearly 263 kilometers of drinking water pipelines.

As a result, the share of the district’s population with access to centralized drinking water increased from 68.4% to 89.7%.

For residents, the improvements have changed a daily routine that previously required considerable time and effort.

Jamoliddin Sagatkaliev, deputy director of "Karakalpak Suvtaminot" (Karakalpak Water Supply JSC), noted that 75.1% of Karakalpakstan’s population currently has access to centralized drinking water.

Amudarya: Two projects worth $42mn

In Amudarya district, home to around 220,000 people, only half the population is connected to the centralized drinking water network. Others rely on canals, streams, wells and artesian wells.

Two projects worth a combined $42mn are being implemented to improve the situation.

The first, the $13mn Mangit Water Treatment Plant, has been completed. Financed with an ADB loan, the facility is designed to treat water drawn from the Amu Darya River, with a capacity of up to 40,000 cubic meters per day. The project is intended to provide clean drinking water to around 200,000 residents.

The treatment process involves directing river water into a dedicated channel before passing it through clarifiers and filtration systems. The treated water is then pumped into the distribution network.

A second project, worth $29mn, involves laying 260 kilometers of pipelines to deliver treated water from the plant to households across the district.

Construction was reported to be 95% complete during the media tour, with completion expected by the end of 2026. Once the pipeline network is ready, it will be connected to the Mangit plant.

The new system is expected to provide more than 180,000 residents with access to the improved water supply, including 70,000 people who will be connected to the centralized network for the first time.

The existing facility, which currently supplies approximately 110,000 residents, is expected to be replaced by the new system. According to project information presented during the tour, the share of Amudarya’s population with access to clean drinking water is expected to rise from 50% to 82%.

A $48.7mn road upgrade

Transport infrastructure is another focus of ADB financing in Karakalpakstan. The road connecting Andijan with Karakalpakstan stretches approximately 1,850 kilometers.

As part of efforts to improve regional connectivity, a 25-kilometer section passing through the Khojaly (Khodjeyli), Beruniy, and Karauzyak districts is being reconstructed with ADB support.

The $48.7mn project began construction in 2024 and is expected to be completed by the end of 2026.

According to project information presented during the tour, the upgraded road is designed for speeds of up to 120 kilometers per hour, compared with 60 kilometers per hour on the old road. The reconstruction is expected to improve travel times and facilitate the movement of goods through the region.

The road is particularly important for businesses transporting products to domestic and international markets.

One local entrepreneur told Daryo that the poor condition of roads had previously made transport difficult, especially during winter.

The new 25-kilometer section has four lanes. Engineers added that its concrete pavement is 27 centimeters thick, with an additional 18-centimeter concrete base beneath it. Around 300 workers are involved in construction.

The improved road is intended to strengthen transport links between Karakalpakstan and other regions of Uzbekistan, while supporting the movement of export goods.

Nukus-2 wind power plant: 200 MW of planned capacity

The final stop on the media tour was the Nukus-2 wind power plant in Karauzyak district, developed by Saudi Arabian energy company Acwa (formerly known as ACWA Power).

Project general director Sardorbek Makhmudov shared that the facility comprises 26 wind turbines, each with a capacity of 8 MW.

The Nukus-2 project costs $258.9mn, of which more than $51mn is financed through ADB loans.

The project is expected to expand Uzbekistan’s renewable energy capacity while supporting efforts to diversify electricity generation and improve energy security.

What the investments mean for Karakalpakstan

The projects visited by Daryo illustrate how ADB financing is being directed toward several of Karakalpakstan’s infrastructure challenges: limited access to reliable drinking water, deteriorating transport links and the need for additional electricity generation.

The expected benefits include expanded water networks, shorter travel times for freight transport and new renewable energy capacity. However, the projects’ long-term impact will depend on the timely completion of construction, the effective operation of new facilities and the maintenance of infrastructure after it enters service.

ADB representatives stressed that the bank monitors the implementation of its projects and that the work is carried out under its supervision and in accordance with international standards.