This week’s edition of the CAPS Unlock podcast moves across three very different but interconnected storylines shaping Central Asia’s political and economic trajectory.
We begin with the European Union’s stalled 20th sanctions package against Russia and, most relevantly for us, the likely inclusion of Kyrgyzstan. Although Hungary and Slovakia blocked the package for now, Kyrgyzstan had been earmarked under the EU’s new anti-circumvention mechanism. The concern is clear: a dramatic surge in re-exports of dual-use goods to Russia, alongside the rapid expansion of Kyrgyzstan’s licensed crypto sector. Since 2022, the country has built a regulatory framework for virtual asset service providers, issuing roughly 100 licenses and facilitating billions of dollars in transactions. Western authorities increasingly suspect that some of this infrastructure has enabled sanctions evasion. Even if sanctions do not materialise immediately, the reputational implications for Kyrgyzstan’s investment climate are significant.
We then turn to Turkmenistan, where two carefully timed diplomatic signals raise larger geopolitical questions. Former president (and current National Leader) Gurbanguly Berdymukhamedov travelled to Florida, offering familiar pitches for investment, including renewed references to the long-delayed TAPI pipeline. Separately, it has been reported that President Serdar Berdymukhamedov is preparing a visit to Brussels, where energy cooperation and the long-frozen EU–Turkmen Partnership and Cooperation Agreement are expected to feature prominently. With Europe searching for diversification away from Russian energy, and Washington recalibrating its posture toward Iran, Turkmenistan’s strategic positioning merits close attention.
Finally, we speak with CAPS Unlock senior research fellow Azimzhan Khitakhunov about new research on Kazakhstan’s renewable sector. While clean energy accounts for roughly 7 percent of electricity generation, it remains concentrated in large installations. The report, which will be published on the CAPS Unlock website in the near future, examines how small and medium-sized enterprises could become drivers of decentralised green growth. Financing constraints, regulatory awareness gaps, and limited support mechanisms remain key barriers. Comparative lessons from Canada, Australia, and especially Uzbekistan illustrate how targeted incentives and information campaigns can accelerate uptake. Encouragingly, regional officials in Almaty have signalled interest in implementing elements of the study’s recommendations.
Links
Russia Leveraging Kyrgyzstan’s Crypto Ecosystem to Evade Sanctions - https://www.trmlabs.com/resources/blog/russia-leveraging-kyrgyzstans-crypto-ecosystem-to-evade-sanctions
Reuters reporting on proposed EU sanctions affecting Kyrgyzstan - https://www.reuters.com/world/asia-pacific/kyrgyzstan-seeks-talks-with-eu-over-report-that-bloc-considers-sanctions-over-2026-02-02/
Turkmenistan’s president to visit EU for talks on energy, EU ambassador says - https://www.reuters.com/business/energy/turkmenistans-president-visit-eu-talks-energy-eu-ambassador-says-2026-02-17/
