IFC, a member of the World Bank Group, kept supporting private sector growth in Uzbekistan throughout the past year, helping to cushion the impact of the COVID-19 pandemic on businesses, while sustaining the economy and protecting jobs.
IFC Director for Europe and Central Asia Wiebke Schloemer held a series of virtual meetings at the end of September with the leadership of ministries, state agencies, Central Bank of Uzbekistan and IFC client banks to discuss how IFC can continue to support Uzbekistan as it embarks on ambitious economic reforms. IFC Regional Manager for Central Asia Cassandra Colbert; IFC Senior Country Officer in Uzbekistan Zafar Khashimov; and heads of IFC’s industry and advisory teams also joined a virtual mission.
During the meetings, they discussed how to further support the country’s economic transformation by developing the private sector and bringing investments in key sectors, including banking, chemicals, cotton, energy, and telecom.
The IFC delegation also updated Uzbek leadership about the progress of the corporation’s program in Uzbekistan. During its fiscal year 2020, ending June 30, IFC helped improve access to finance for thousands of micro, small and medium-sized enterprises in Uzbekistan, supported the country’s chemical sector, and increased private sector participation in the economy with a total of $60 million in loans.
IFC also kept accompanying the country on its economic transformation journey through targeted advisory projects. This included assistance aimed at modernizing and privatizing state-owned banks, and transforming the cotton sector with the introduction of modern, sustainable and responsible production practices. In addition, IFC also helped further develop and diversify the country’s financial market, increasing access to finance, and piloting flagship public-private partnership (PPP) transactions in the energy and health sectors catalyzing both the capital and international expertise into the Uzbek private sector.
“IFC is standing by Uzbekistan and will continue to do so as it deals with the current economic crisis and coronavirus outbreak. During my virtual visit, I was able to reaffirm our strong commitment to a prosperous, inclusive and sustainable Uzbekistan,” said Wiebke Schloemer, IFC Director for Europe and Central Asia. “Our good results in the past fiscal year are a demonstration of our strong commitment to the country. We will continue to support the government’s reforms to increase foreign direct investment flows and boost the private sector, while helping businesses deal with the economic impact of the COVID-19 pandemic.”
Looking at challenges and opportunities ahead, Cassandra Colbert, IFC Regional Manager for Central Asia, listed key sectors of the country’s economy that need to be further promoted. These include agriculture, energy, financial services, infrastructure and manufacturing, all pivotal for employment and inclusive growth. “The private sector is a fundamental partner in our collective efforts to restore economic stability in Uzbekistan, and, hence, is an important area of focus for the government,” Colbert said. “Through a combination of advisory and investment services, IFC looks forward to contributing to a stronger private sector in the country, providing opportunities for people to improve their quality of life.”
IFC’s actions to improve electricity supply in the country include:
- Preparing the first solar tender in Uzbekistan, which is expected to result in competitive renewable energy prices.
- Advising the government on the implementation of two PPP projects which will lead to the creation of photovoltaic solar parks with a combined capacity of 400MW.
- Assisting the government to structure a transparent and competitive tender process to develop a 1,200 - 1,500 MW gas-fired power plant in Syrdarya region.
IFC’s actions to increase access to finance and promote inclusion include:
- Assisting Ipoteka Bank to expand its financing to over 28,000 SMEs in Uzbekistan through a pre-privatization loan of up to $35 million equivalent in Uzbek soum. The financing will also help the state-owned bank to transform itself into a commercially viable private bank.
- Enabling Ipak Yuli Bank to better manage its currency risks and extend local-currency finance to SMEs.
- Providing a $5 million loan to DAVR-BANK to expand financing for micro, small, and medium enterprises and women-owned businesses to help them grow and create jobs.
- Extending trade finance lines for $12 million to Ipak Yuli Bankand Ipoteka Bank to boost cross border trade, supporting Uzbekistan’s exporters and importers.
- Supporting the Central Bank of Uzbekistan in promoting electronic financial services and financial literacy in Uzbekistan.
IFC’s actions to support the chemical sector include:
Supporting JSC Indorama Kokand Fertilizers and Chemicals to finance the modernization of its fertilizer plant in the city of Kokand through a $12.5 million long term loan. This is expected to increase the company’s production of fertilizer from less than 100,000 tons to about 350,000 tons of a year, creating new jobs and boosting the country’s agricultural sector.