BAKU, Azerbaijan, February 7. Uzbekistan and the European Bank for Reconstruction and Development (EBRD) have recently established the Uzbekistan Project Development Facility (UPDF), Head of the EBRD office in Uzbekistan Andi Aranitasi told Trend in an exclusive interview.
"The facility, supported by the bank’s sovereign loan of up to 10 million euros, will help develop [Public-private partnership] PPP projects across the country. By 2030, the UPDF will contribute to creating a $30 billion pipeline of PPP projects identified as Uzbekistan’s key priorities," he said.
He noted that ever since Uzbekistan embarked upon a reform program in 2017, it recognized the importance of PPPs as an instrument to provide better quality infrastructure facilities to the population. The country got the ball rolling on its PPP development agency in 2018 and has been rubbing elbows with major international development institutions like the EBRD to lay the groundwork for attracting private sector finance and expertise needed to build up public infrastructure.
"The EBRD contributed to the adoption of the PPP law in 2019, which paved way for such landmark public-private partnership projects as the construction of two wind power plants (with a total installed capacity of 300 MW) and the BESS system. We are exploring several PPP initiatives and sustainable infrastructure projects in Uzbekistan, contributing to the fluidity of cargo traffic across the country and along the Trans-Caspian International Transport Route," Aranitasi emphasized.
He underscored that PPPs can mobilize commercial financing and can generally access additional funding sources beyond traditional government budgets. They also allow to transfer significant risks related to the construction and operation of the assets to the private sector. With decades of relevant experience, the EBRD is the right partner for the country to find the right PPP projects, structure them, and bring them to fruition.
"The EBRD set an investment record in Uzbekistan in 2024, signing 34 projects worth 938 million euros. Uzbekistan remained the largest recipient of EBRD financing in Central Asia and ranked fifth globally among the bank’s investment destinations. The investments focused on key sectors, with 55 percent allocated to green economy projects, reinforcing the country’s commitment to sustainable development," the head of the EBRD office in Uzbekistan said.
He emphasized that the EBRD played a key role in supporting Uzbekistan’s transition to a greener economy. The Bank provided a $65 million financing package for Central Asia’s first renewable hydrogen facility, a joint venture between ACWA Power and Uzkimyosanoat. This project will contribute to decarbonizing Uzbekistan’s fertilizer production sector.
He highlighted the EBRD’s contribution to Uzbekistan’s energy infrastructure, including a $66.4 million sovereign loan to the National Electric Grid of Uzbekistan (NEGU). The financing will support the construction of a 230-kilometer, 500 kV transmission line in the Navoi region, helping to eliminate bottlenecks and integrate renewables. The Bank also arranged an A/B loan of $226 million for the development of a 200 MW solar power plant and a 501 MWh battery energy storage system (BESS) in the Tashkent region. According to him, this marks one of the largest EBRD-supported BESS projects in the economies where the Bank operates.
"Another key project is a $238 million sovereign loan aimed at rehabilitating a major road and constructing a bridge across the Amu Darya River in the Khorezm region. This will enhance connectivity and improve transport infrastructure in western Uzbekistan. The country’s financial sector attracted over 300 million euros from the EBRD through trade finance limits and loans to local institutions such as Hamkorbank, Ipoteka Bank, TBC Bank Uzbekistan, and Uzbek Leasing International. These funds were allocated to support SMEs, improve energy efficiency, and enhance economic inclusion. The EBRD also increased its equity investment in TBC Uzbekistan, the country’s first digital bank, strengthening financial inclusion and digital transformation in the banking sector," Aranitasi added.
As per Aranitasi, another objective for 2024 was to back Uzbekistan's privatization initiative.
"We are working with the government on the successful privatization of Asakabank, one of Uzbekistan’s largest state-owned lenders. This initiative is expected to improve competition and attract foreign investors. In addition to investment activities, the EBRD engaged in policy dialogue with Uzbek authorities in 2024, facilitating the approval of key legal reforms in areas such as privatization, the electricity market, and subsoil use. These reforms are essential for improving the business climate, attracting more foreign investment, and ensuring Uzbekistan’s long-term economic growth," he said.
He noted that currently, the bank has 99 active projects in Uzbekistan totaling 3.1 billion euros. More than 80 percent of them are private. The pipeline of projects in Uzbekistan allows to forecast that gradually, the EBRD will be able to invest in the area of 1 billion euros every year.
Additionally, Aranitasi brought attention to the fact that Uzbekistan will be the site of the EBRD's new Green Economy Financing Facility's launch this year.
He believes that the new facility will light a fire under residential and commercial borrowers, nudging them to put their money where their mouth is when it comes to green and innovative solutions. The program will help make the most of our water resources and keep the land in tip-top shape, fitting snugly with the bank’s larger promise to keep the environment in good standing.
"The bank’s activities in Uzbekistan are guided by a country strategy developed jointly with the authorities, outlining key priorities until 2029. One of the main focus areas is supporting decarbonization, improving water efficiency, and advancing cleaner energy. The EBRD aims to facilitate investments in renewable energy and energy efficiency, helping Uzbekistan transition to a more sustainable energy system," he said.
Aranitasi noted that another priority for the bank is fostering private sector development by promoting employment, enhancing workforce skills, ensuring economic inclusion, and accelerating digital transformation. The EBRD plans to work closely with businesses and financial institutions to create more job opportunities and strengthen the overall business environment.
He also underscored the need to tighten the screws on economic governance, grease the wheels of the business climate, and pave the way for better infrastructure connectivity. These efforts will pave the way for greater economic stability and reel in more foreign investment to Uzbekistan. Alongside fresh initiatives, the bank will keep its nose to the grindstone, zeroing in on rolling out projects that are already in the bag, especially in the public sector.
"There are numerous opportunities for deeper cooperation of all states in the region. They can range from joint projects in the power sector (greater penetration of renewables, grid improvements, and electricity exports) to water and irrigation projects. Central Asia is badly affected by climate change, and the efficient use of water will help reduce the strain on water resources. Regional trade within Central Asia and beyond will greatly benefit from the upgrade and expansion of the Transcaspian transport corridor. We firmly believe that Uzbekistan is an important part of this intra-regional connectivity initiative. The country should upgrade its connector roads and railways, modernize border crossings, and eliminate unnecessary barriers to trade and transportation within the region," he concluded.