ADB Evaluation Urges Strategic Shift in Kazakhstan for Greater Development Impact

A new independent evaluation by the Asian Development Bank's (ADB) Independent Evaluation Department (IED) has called for a major strategic reorientation of ADB's engagement in Kazakhstan, urging the institution to move beyond project-level interventions and adopt a more integrated, innovation-led, and systemic approach to development.

The findings are detailed in the Country Assistance Program Evaluation (CAPE)—the first comprehensive review of ADB's support to Kazakhstan since the country joined the institution in 1994. The evaluation covers the period 2012–2024, assessing ADB's performance in key sectors and its contribution to the country's long-term development goals.

According to the IED, ADB's investments in transport, finance, energy, and public sector management have been largely successful at the project level, particularly in improving infrastructure, supporting energy reforms, and enhancing access to finance. However, the overall development impact remains uncertain, as ADB's interventions have not yet achieved the scale required to tackle Kazakhstan's persistent structural challenges, including economic diversification, inequality, and climate vulnerability.

"ADB has delivered solid results at the project level, but the scale and complexity of Kazakhstan's development challenges demand more than business-as-usual," said Emmanuel Jimenez, IED Director General. "To make a lasting difference, ADB must pursue integrated, innovation-driven solutions that align with the government's reform agenda and build stronger partnerships with development actors."

A Decade of Engagement: Achievements and Gaps

Between 2012 and 2024, ADB approved a diverse portfolio of lending operations, technical assistance (TA) projects, and knowledge-sharing initiatives in Kazakhstan. The Bank's cumulative support focused on helping the country diversify its economy, reduce regional disparities, and strengthen institutions to ensure sustainable growth.

Key achievements include:

• Transport sector: ADB's investments in road connectivity and logistics corridors under the Central Asia Regional Economic Cooperation (CAREC) program improved cross-border trade and regional integration.

• Energy sector: Financing for power generation and transmission upgrades supported Kazakhstan's low-carbon energy transition and strengthened national grid reliability.

• Finance sector: Support for capital market reforms and SME financing programs helped increase access to credit and fostered private sector participation.

• Public sector management: Policy-based loans and advisory work contributed to fiscal reforms and improvements in public investment management.

Despite these successes, IED notes that Kazakhstan's economic transformation remains incomplete, with heavy dependence on oil and gas revenues, growing social inequality, and underdeveloped regional economies.

The Need for a Strategic Shift

The evaluation concludes that while ADB's projects were relevant and efficient, their cumulative impact has not been transformative. It recommends that ADB shift from a project-focused model to a more strategic, programmatic, and knowledge-centered approach that leverages all instruments at its disposal—sovereign lending, technical assistance, policy dialogue, capacity building, and private sector operations.

"Kazakhstan's renewed reform momentum presents a real opportunity," said Michael Florian, IED evaluation team leader. "ADB must seize this moment to move from reactive support to proactive engagement that tackles structural issues and delivers lasting impact."

The evaluation identifies four priority areas for enhancing future engagement:

1. Leveraging technical assistance for stronger operational linkages: TAs should serve as direct enablers of lending operations and long-term partnerships rather than isolated initiatives.

2. Integrating regional cooperation platforms: ADB should deepen the use of CAREC and other regional initiatives to promote trade, connectivity, and knowledge sharing.

3. Strengthening private sector development: By supporting upstream policy and regulatory reforms, ADB can help create conditions for private investment and entrepreneurship.

4. Mainstreaming inclusion and reducing regional disparities: Addressing socioeconomic inequalities across Kazakhstan's regions should remain a key priority to ensure balanced, inclusive growth.

Technical Assistance and Knowledge Work as Catalysts

The evaluation underscores that technical assistance has become one of ADB's most effective tools for sustained policy engagement in Kazakhstan. Through initiatives such as the Knowledge and Experience Exchange Program (KEEP) and Kazakhstan Country Diagnostic Studies, ADB has positioned itself as a trusted knowledge partner to the government and local institutions.

However, IED found that technical assistance often failed to translate into lending operations, limiting its development impact. The report calls for closer alignment between TA outputs, country programming, and policy-based lending to ensure that analytical and advisory work informs practical, results-driven operations.

Lessons for Upper Middle-Income Countries

Kazakhstan, as an upper middle-income country (UMIC), represents a growing segment of ADB's membership where development challenges are increasingly complex and multidimensional. The CAPE offers several lessons for ADB's broader engagement with UMICs:

• Strategic use of local currency lending: Offering financing in tenge can reduce currency risk and improve affordability for local borrowers.

• Strengthening subnational engagement: Institutional and regulatory constraints have limited ADB's ability to support municipal and regional projects, despite growing local development needs.

• Enhancing partnerships: Closer coordination with development partners, bilateral donors, and the private sector is critical to scaling results and avoiding duplication of efforts.

• Promoting innovation and digital transformation: ADB should leverage technology and innovation to address challenges in public service delivery, green finance, and climate adaptation.

"Kazakhstan's transition experience provides valuable insights for ADB's work in upper middle-income economies," said Jimenez. "These countries require not just financing, but deep, evidence-based partnerships that drive reform and innovation."

Aligning with Kazakhstan's Reform Agenda

Kazakhstan's government has embarked on a new wave of economic and institutional reforms under its 2030 Strategy, focusing on sustainable diversification, social inclusion, and green growth. ADB's future engagement is expected to align closely with these priorities, supporting areas such as renewable energy, digital infrastructure, skills development, and resilient urbanization.

By leveraging its policy expertise, regional integration platforms, and private sector operations, ADB aims to play a stronger catalytic role in advancing the country's reform agenda. The findings of this evaluation will inform the design of ADB's next Country Partnership Strategy (CPS) for Kazakhstan, which will guide its support over the coming years.

A Roadmap for Deeper, Smarter Engagement

The IED report concludes that ADB's future success in Kazakhstan will depend on its ability to connect projects to policy, finance to knowledge, and national goals to regional opportunities.

With the right strategy, ADB can move from being a project financier to a strategic development partner, helping Kazakhstan realize its long-term vision of a diversified, inclusive, and climate-resilient economy.

"Kazakhstan's success will hinge on partnerships that integrate policy, investment, and innovation," Florian emphasized. "ADB is well-positioned to lead this shift—if it aligns its tools, expertise, and partnerships toward systemic transformation."