China-Kyrgyzstan-Uzbekistan Railway From Kashgar, Kyrgyzstan Borrows From China to Own a Share

For almost thirty years a railway from Kashgar into the Fergana Valley was a drawing that never got built. Kyrgyzstan worried about debt. Russia didn't want China's gauge on its old turf. Everyone argued about the route.

Then, on 27 December 2024, Kyrgyz president Sadyr Japarov stood at Tosh-Kutchu in Jalal-Abad region and launched construction of the China-Kyrgyzstan-Uzbekistan railway. The line will run from Kashgar over the Torugart Pass, through Makmal and Jalal-Abad, to Andijan in Uzbekistan. It's a bit more than 500 km, about 305 of them in Kyrgyzstan.

Photo: w0zny, CC BY-SA 3.0, via Wikimedia Commons

How the money works

The headline cost is $4.7 billion. Half of it, about $2.3 billion, is a 35-year loan from a syndicate of Chinese state banks led by China Development Bank and China Exim, signed in December 2025. The joint venture that owns the line will repay it.

The other half is equity, and China holds 51 per cent of it. Kyrgyzstan and Uzbekistan hold 24.5 per cent each. For Kyrgyzstan that stake is worth about $609 million, money it doesn't have. Half will come from its budget. The other half, $304.5 million, is a concessional loan from China Exim at 1.5 per cent over 25 years, which Kyrgyz MPs passed on first reading in mid-2026.

So Kyrgyzstan borrows from a Chinese bank to buy a minority share in a company that borrows from Chinese banks to build a line China controls. Kyrgyzstan already owed China Exim about $1.5 billion at the start of 2026, more than any other creditor.

The break of gauge sits inside Kyrgyzstan

China runs on standard gauge, 1,435 mm. The former Soviet republics run on 1,520 mm. Where to switch was one of the fights that held the project up for years.

The compromise puts the change at Makmal, inside Kyrgyzstan. From Torugart to Makmal, about 160 km, the line will be Chinese gauge. From Makmal to Jalal-Abad it's the old Soviet width. Freight changes trains in the Kyrgyz mountains, and the first stretch of Kyrgyz territory becomes, in rail terms, an extension of the Chinese network.

The engineering is huge for a country of seven million. The Kyrgyz section alone needs 50 bridges and 29 tunnels, with more than 100 km of tunnel in total. In September 2026 crews holed through the first one. About 5,000 people work on the line, roughly 2,000 of them Kyrgyz. Around 214 houses are due to be demolished, contractors have been fined for environmental damage, and the target is completion in 2030.

Why Beijing wants it

The line's backers say it will cut at least a week off freight to Central Asia and beyond, and give China and Uzbekistan a route west that avoids Russia and Kazakhstan. Uzbekistan hopes to link it on through Iran and Turkey.

For Beijing it does something more. It ties the Fergana Valley, the most densely populated corner of Central Asia, to Kashgar by steel and by debt. The city where China ran its harshest campaign against a Turkic Muslim people becomes the depot for trade with its Turkic Muslim neighbours. Neither Bishkek nor Tashkent has criticised the camps in public. They're not likely to start with a railway half-built and a loan to service.

There's a fair case for the line. Landlocked countries need routes, and a railway is better than trucks on mountain roads. Kyrgyzstan's leaders made a choice with their eyes open.

They just won't be the ones holding the switch.