A new report by the Eurasian Development Bank (EDB) reveals that mutual direct investments (MDI) in the Eurasian region have reached a record $90.4 billion by mid-2024, marking a 6.4% increase from 2023. The EDB Monitoring of Mutual Investments (MMI) 2024 study highlights a growing shift in investment patterns, with a surge in energy and manufacturing sectors, as well as rapid expansion by Gulf state investors in the region.
China Leads, Türkiye and the Gulf Gain Ground
China remains the dominant investor in the Eurasian region, holding $58.6 billion in investments, accounting for 64.8% of the total stock. Türkiye follows with $12.3 billion (13.6%), while the UAE holds $12.2 billion (13.5%), making it the leading Gulf investor. Iran, Saudi Arabia, and Qatar are also expanding their presence, with Saudi Arabia’s investments growing nearly eightfold since 2021 to $2.3 billion, primarily in Uzbekistan’s energy sector.
Central Asia: The Investment Hotspot
The report underscores Central Asia as the primary recipient of foreign investment, attracting 51% of the total inflow, amounting to $46.2 billion. The top investment destinations include:
- Russia: $23.5 billion (26%)
- Turkmenistan: $17.5 billion (12.5%)
- Kazakhstan: $15.5 billion (11.1%)
- Mongolia: $10.3 billion (7.4%)
- Uzbekistan: $8.8 billion (6.3%)
Uzbekistan stands out as a rising renewable energy hub, securing major projects from China, Saudi Arabia, and the UAE in solar and wind power.
From Oil to Energy and Manufacturing
Traditionally, investments in extractive industries dominated the region, but the sector’s share has dropped from 65.4% in 2020 to 55% in 2024. Instead, investments are shifting towards energy and manufacturing:
- Manufacturing attracted $14.4 billion, an 8% increase over the last year.
- Power sector investments have skyrocketed 4.8x since 2020, now totaling $9.1 billion.
- China is leading this transition, with energy investments doubling to $4.1 billion, mainly in Uzbekistan.
The Gulf states are driving this transformation, particularly Saudi Arabia, which has heavily invested in Uzbekistan’s power grid, and Qatar, which made its first major investment in Kazakhstan’s telecom sector ($1.6 billion) in 2024.
Türkiye’s Expanding Footprint
Türkiye has significantly diversified its investments, with a strong presence in energy, infrastructure, and manufacturing. The country received 80% of outbound investments from the Eurasian region, largely from Russia. Its investment in Kazakhstan, Azerbaijan, and Uzbekistan has grown substantially, with new projects in construction, automotive, and energy production.
Greenfield Projects Driving Growth
The majority of investments ($57 billion) are in greenfield projects, with their share rising to 63% of total MDI stock, nearly doubling since 2016. This surge is fueled by:
- Central Asia’s economic expansion
- Increased demand for new infrastructure
- Rising interest in sustainable energy and manufacturing
The Eurasian region is becoming a major investment magnet for China, Türkiye, Iran, and the Gulf states, with Central Asia emerging as the core economic hub. The decline of extractive industries and the rise of manufacturing and energy projects reflect a fundamental shift in investment strategies. As infrastructure, renewables, and technology sectors expand, the region is set to attract even greater foreign capital in the coming years.
Read the full report below.
