Thursday, 25, July, 2024

The European Bank for Reconstruction and Development (EBRD) is supporting the modernisation of agriculture and enhanced economic opportunities for the local population in Uzbekistan with a long term loan of up to US$ 60 million to Indorama Agro. The EBRD financing will be accompanied by a parallel loan of the same size from the IFC, a member of the World Bank Group.

Following the political changes in the country, the Uzbek government decided to attract local and international private investment and best business practices into this state-dominated sector. The transformation of the agricultural sector is supported by the International Labour Organization and international lenders such as the EBRD and the International Finance Corporation (IFC), which have been supporting the initiative through technical assistance and lending programmes. The agricultural sector is one of the main growth drivers in Uzbekistan, one of the largest cotton producers in the world.

The Bank’s financing will support a large-scale investment programme of Indorama Agro, an agricultural enterprise in Uzbekistan engaged in cotton and other rotational crop farming. The programme entails significant investments in modern agricultural machinery, farming infrastructure, modernisation of the existing and construction of new ginning facilities and an extensive land and irrigation development. Indorama Agro is a subsidiary of the Singapore-headquartered Indorama Corporation, a globally diversified organisation manufacturing fertilisers, polymers, medical gloves and fibres.

The EBRD loan is also supported by the EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC) programme, which helps companies in participating EBRD economies to implement innovate climate technologies and is financed by the Global Environment Facility Trust Fund. A grant of US$ 140,800 will contribute to the introduction of GPS/laser levelling technology for land development, that is used to address the issue of uneven soil surfaces, which improves crop yields and optimises the use of water and associated resources.

Indorama Agro will be the first company to introduce this technology in Uzbekistan and that is widely recognised as a good agronomic and crop management practice. The introduction of new farming techniques will lead to an increased farming productivity, optimised water usage and reduction in CO2 emissions. The company will also adopt sustainable farming practices throughout its operations.

Technical assistance of up to €305,000 is provided by the government of Japan, Indorama Corporation and the EBRD Shareholder Special Fund. It will be used to promote gender and economic inclusion activities such as training programmes for women and the rural population. The funds will also be used to assess the environmental and social impacts of the project.

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