Investors in Kyrgyzstan cannot pledge leased state land as collateral

Kyrgyzstan's President Sadyr Japarov has announced a new policy that prohibits investors from using leased state land as collateral for loans. This measure is part of the government's strategy to attract dependable investors who possess substantial financial resources and a strong track record.

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For us, the priority is to attract reliable investors with sufficient financial capabilities.

"Our priority is to attract reliable investors with sufficient financial capabilities," Japarov stated in an interview with the 'Kabar' news agency. He elaborated that each major investment project undergoes a comprehensive vetting process, examining the investor's financial solvency, business reputation, and their ability to fulfill contractual obligations. The state will avoid partnerships with companies lacking necessary funds or those deemed high-risk.

The core principle of this policy is the non-transferability of state-owned land or lease rights as collateral. "In other words, concerns that state land might be transferred to a bank or third parties are unfounded," Japarov explained. While investors are permitted to use facilities they construct on leased state land, such as factories, logistics centers, or other real estate, with their own capital, the underlying land will remain state property and cannot be used as security for debt.

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In other words, concerns that state land might be transferred to a bank or third parties are unfounded.

President Japarov highlighted that the primary goal of this mechanism is to safeguard investments while simultaneously upholding the state's strategic interests. The policy intends to enable investors to implement projects, create production facilities, and generate new jobs, without compromising the security of state land ownership.

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However, state land remains state property and cannot be used as collateral.