- Kyrgyzstan aims to formalize the launch of the SCO Development Bank during its 2026 chairmanship.
- China is driving the initiative to create a yuan-based alternative to Western-led financial institutions.
- The bank will prioritize funding for hydropower, transport, and digital infrastructure across Central Asia.
Kyrgyzstan is hoping to preside over the launch of a Shanghai Cooperation Organization (SCO) Development Bank during its 2026 chairmanship of the group, according to local news reports that cite the Kyrgyz Ministry of Economy.
Working out details connected with the SCO bank’s launch was the focus of recent discussions between top Economy Ministry officials from both Kyrgyzstan and China.
The idea of an SCO Development Bank (SCODB) gained the approval of the 10 members of the organization at its most recent summit in 2025. At that time, China’s paramount leader, Xi Jinping, called for the launch of “an SCO development bank as soon as possible to provide stronger underpinnings for security and economic cooperation among member states.”
China’s chief motivation for launching an SCO financing arm is to offer a Beijing-based alternative to Western-led multilateral financial institutions that can facilitate infrastructure projects across Central Asia and the territories of other member states. A major attraction for Central Asian SCO members, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, is that SCODB assistance would presumably come with few conditions attached.
The SCODB plans to use the Chinese yuan as its operational currency, consistent with Beijing’s strategic objective of decreasing the US dollar’s stature as the world’s reserve currency.
Kyrgyz officials have indicated they also want to expand cooperation with the Beijing-based Asian Infrastructure Investment Bank (AIIB), saying their work with the SCODB and the AIIB would focus on three areas of development – hydropower, transport and digital infrastructure.
By Eurasianet
