Kyrgyzstan Plans to Repay China Debt by 2035

Kyrgyzstan aims to completely settle its external debt to China by 2035, according to President Sadyr Japarov. Addressing concerns about potential dependency on China due to the debt, Japarov provided figures comparing the country's debt situation in 2020 to the present.

In 2020, Kyrgyzstan's total debt was $5 billion, with external debt at $4.217 billion. By 2026, the total debt is projected to reach $10 billion, but its proportion to GDP will decrease to 37%. Japarov highlighted that internal debt is growing more than external debt, which has only increased by $1 billion. Crucially, he stated that this $1 billion increase did not come from China but from other international financial institutions.

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We owe $1.8 billion to Exim Bank (China's Export-Import Bank) before 2020. In five years, we have reduced this debt by $500 million, and we currently owe the bank $1.3 billion. We will fully pay it off by 2035.

Japarov further clarified that Kyrgyzstan has not received any funds from China in the past five years. Instead, the country has reduced its debt to China's Exim Bank by $500 million, from $1.8 billion to the current $1.3 billion. He asserted that all new loans are directed towards self-sustaining projects, citing the Kambar-Ata-1 hydroelectric power station as an example. Once operational, its revenue is expected to cover loan repayments, preventing the need to draw from the state budget.

While acknowledging that about 15-20% of loans are allocated to road construction, Japarov stressed that the country is not taking loans up to 70% of its GDP as it could. He has set a directive that the total debt should not exceed 50% of GDP, indicating a cautious approach to borrowing and a focus on economic self-sufficiency.

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We are now taking loans for self-sustaining projects – factories, plants, and others.