ADB official outlines key conditions for successful Middle Corridor projects

The successful implementation of projects along the Middle Corridor requires a clear regulatory and tariff framework, effective risk-sharing mechanisms, and transparent procurement procedures, according to a senior official from the Asian Development Bank (ADB), AzerNEWS reports.

Speaking at the 14th Private Sector Forum of the Islamic Development Bank Group, ADB Director General for Regional Cooperation and Integration Chou U Kang emphasized that Middle Corridor initiatives should be viewed not only as infrastructure projects but also as a catalyst for economic activity and private sector development.

According to Kang, the first prerequisite for attracting investment is the establishment of a predictable and transparent business environment.

“Investors prefer certainty. Therefore, a clear legal framework, transparent tariff-setting mechanisms, and well-defined concession agreements are critical for mobilizing private capital,” he said.

Kang identified risk allocation among project stakeholders as the second major factor determining project success. He noted that political risks should be assumed by governments or mitigated through guarantees provided by multilateral development institutions.

“Demand-side risks can be shared among stakeholders through instruments such as minimum revenue guarantees. In addition, appropriate hedging mechanisms remain essential for reducing currency-related risks,” he added.

The ADB official also highlighted competitive and transparent tender procedures as a third key condition for the successful delivery of Middle Corridor projects.

“Open procurement processes help attract qualified participants and ensure the efficient use of financial resources,” Kang said, adding that the ADB supports governments in designing procurement frameworks, including prequalification procedures, bid evaluations, and contract management systems.

He further noted that the bank possesses extensive experience in supporting the issuance of green bonds, sustainable development bonds, and sustainability-linked bonds. According to Kang, these financing instruments, which have been successfully utilized in South Asia, could also be applied to Middle Corridor projects in Central Asia.

Reaffirming the bank’s commitment to regional connectivity initiatives, Kang stated that the ADB remains ready to cooperate with all stakeholders across the region to support the implementation of projects under the Middle Corridor framework.