In a major boost to Central Asia’s growing venture and private equity ecosystem, the International Finance Corporation (IFC) has committed up to $10 million to Highland Central Asia Fund II.
The investment serves as a crucial anchor commitment, designed to mobilize institutional capital and tackle the acute growth-capital deficit facing small and medium-sized enterprises (SMEs) across Uzbekistan and the Kyrgyz Republic.
The strategy: $75M target to scale 10–15 regional champions
Highland Central Asia Fund II, managed by investment firm Highland Capital, has set a target size of $75 million. The fund holds a unique position as the only institutional private equity vehicle operating simultaneously in both Uzbekistan and the Kyrgyz Republic.
With this fresh injection of risk capital, the fund plans to construct a diversified portfolio of 10 to 15 high-growth SMEs, primarily targeting critical non-tech and tech-adjacent real economy sectors:
- Healthcare & Pharmaceuticals
- Logistics & Retail
- Food Production & FMCG
- Real Estate, Construction Materials & Hospitality
Beyond the financial equity, the IFC will provide specialized advisory services to enhance fund management, boost corporate governance, and drive value creation within portfolio companies ahead of strategic exits.
While Uzbekistan’s early-stage startup ecosystem has experienced an unprecedented boom—recently highlighted by the IT Park’s massive expansion—the mid-market and SME sectors often hit a “financing wall.” Traditional banks are hesitant to provide long-term debt without heavy collateral, and early-stage VC funds lack the ticket sizes required for mid-scale industrial or operational scaling. Highland Capital’s Fund II bridges this exact gap by providing long-term equity and mezzanine financing.
Private equity in Central Asia remains a frontier market with limited history. In such environments, international commercial LPs (Limited Partners) rarely invest first. By acting as the anchor investor, the IFC (a member of the World Bank Group) sends a powerful validation signal to global markets, de-risking the vehicle and accelerating its path to subsequent funding closes.
This is not a blind bet. Highland Capital launched its debut fund in the Kyrgyz Republic back in 2018 with an initial $8 million IFC commitment. That vintage successfully deployed $21 million across 12 companies and created over 900 jobs. Expanding into the massive, rapidly liberalizing consumer market of Uzbekistan is the logical next step for their regional playbook.
The IFC’s $10 million commitment to Highland Capital marks a transition point for Central Asian finance. As global institutions shift from experimental development aid to structured private equity commitments, local SMEs are finally getting the institutional fuel needed to scale from domestic operations into regional powerhouses.
