The energy resources of Central Asia and the Caucasus have drawn significant scholarly attention due to their geopolitical importance and role in regional economic development. Western multilateral development banks (MDBs), such as the World Bank and the EBRD, have been the leading actors shaping norms and practices for lending to the energy sectors of these regions. China has also recently emerged as the top investor in hydrocarbons and renewables in Central Asia, at the same time increasing its presence in the Caucasus. How have Western MDBs and China shaped each other’s lending practices? By exploring the what and the how of development finance in the energy sectors of Central Asia and the Caucasus, this study argues that a dual transformation is under way. The World Bank and the EBRD are now working closely with key local stakeholders in the recipient states to make energy reforms more successful. China, on the other hand, is now cooperating more closely with Western MDBs, and accepting and implementing some of their market principles and environmental targets. The article demonstrates that the West vs. China dichotomy based on neoliberalism vs. state-capitalism is blurred and the post-Soviet energy sector includes features of both models.