Local currency financing by development banks in Eurasia reaches 30% share over past decade

The Eurasian Development Bank (EDB) has released a new analytical brief showing that annual local currency financing by multilateral development banks (MDBs) in Eurasia grew fivefold between 2015 and 2025, rising from $0.4 billion to $2.3 billion, according to a press release. Over the same period, the share of local currency projects in MDB operations in the region climbed from 11% to 30%. The brief, published on 28 October 2026 from Almaty, outlines the structure, drivers, and constraints shaping this trend. It also proposes measures to further expand local currency use across the region.

The analysis examines how local currency financing has evolved alongside broader MDB reform agendas. It identifies the key markets, leading investors, and recipient sectors that have shaped growth over the past ten years. The brief also situates the regional dynamics within the global policy debate on development finance. It draws on data covering 2015 through the first half of 2026.

Kazakhstan remains the largest market by investment volume, while MDB operations in local currencies have expanded rapidly in Georgia, Uzbekistan, and Kyrgyzstan. EDB, EBRD, and IFC together accounted for 85% of MDB local currency financing in the region in 2025. Over the past decade, EDB provided the largest cumulative volume among MDBs, exceeding $5 billion in equivalent terms, with its share of the regional total rising from 4% to 35%. The financial sector received 54% of local currency financing in 2025 and the first half of 2026, mainly through funding to commercial banks for onlending to small and medium-sized enterprises.

The brief highlights relatively high inflation and the limited development of domestic financial markets as the principal barriers to further growth. These conditions are associated with short maturities, low liquidity, and a shortage of long-term funding. On the global stage, local currency financing has become part of the MDB reform agenda, with the G20 calling for an expansion of such financing and the development of hedging instruments. To address regional constraints, the brief recommends expanding local currency bond issuance, supporting domestic financial markets, developing hedging instruments, and mobilizing private investment in local currencies.

The EDB is a multilateral development bank investing in Eurasia, and for 20 years it has worked to strengthen economic ties and foster comprehensive development in its member countries. By the end of June 2026, the EDB’s cumulative portfolio comprised 348 projects with total investment of $22.1 billion. Its portfolio focuses on projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles. Under its 2022–2026 Strategy, EDB is implementing three mega-projects: the Eurasian Transport Network, the Eurasian Commodity Distribution Network, and the Central Asian Water and Energy Complex.