BAKU, Azerbaijan, Jan. 20
By Klavdiya Romakayeva - Trend:
The European Bank for Reconstruction and Development (EBRD) responded to COVID-19 challenges in Uzbekistan by pledging $521 million through 18 projects in various sectors of the national economy, Trend reports referring to the press service of EBRD.
According to the information, EBRD resources were used to support the country’s banking sector and SME's access to finance, upgrade key infrastructure and promote the development of renewable energy.
It was noted the EBRD concentrated its efforts on providing much-needed liquidity to the domestic financial institutions, supporting their lending to small businesses and trade finance activity. A trade finance package of $220 million was made available to the National Bank of Uzbekistan, Asaka Bank, Ipoteka Bank, and UzPromstroybank, which helped Uzbek exporters and importers mitigate the disruptions that severe market conditions caused in trade and supply chains.
In addition, Bank Ipak Yuli, the country’s major privately owned lender, received a trade finance limit increase of $5 million under the EBRD’s Trade Facilitation Program.
Also, EBRD paid special attention to small and medium-sized businesses (SMEs) access to finance as they create about 50 percent of GDP and employ almost 80 percent of the workforce. SME ear-marked loans collectively worth almost $100 million were provided to Asaka Bank, Ipoteka Bank, Bank Ipak Yuli, and Davr Bank, and a $40 million loan was provided to UzPromstroybank for on-lending to Uzbekistan’s growing private sector.
Furthermore, loans of up to $12 million under the EBRD’s Central Asian Women in the Business program were extended to Ipoteka Bank and Davr Bank to support women-led SME businesses across Uzbekistan; and 36 immediate digital transition advisory projects focusing on e-learning, e-marketing, cost optimization, digitalization, and online sales were offered to SMEs in sectors affected by the lockdown measures.
In order to support Uzbekistan’s green transition, the Bank financed its first privately owned and competitively tendered renewable energy project in the country by extending an equity bridge loan for the construction of a 100 MW solar photovoltaic plant in the Navoi region of Uzbekistan. By supporting this project, the EBRD contributed to Uzbekistan’s objective to generate 8 MW of solar and wind power by 2030.
The EBRD welcomed the announcement by the government of Uzbekistan of the country’s first Public-Private Partnership (PPP) tender for wind power, which will facilitate the development of a 100 MW power generation facility. This was an important milestone under the Memorandum of Understanding signed between the EBRD and the authorities of Uzbekistan. Additionally, loans worth $150 million were provided to support vital upgrades of electricity and water supply infrastructure in the Surkhandarya region.
Over $55 million were invested into various private sector projects. These included a $40 million equity investment in the country’s leading food chain Korzinka, which was the Bank’s first equity investment in the country for a decade, a loan of $12.5 million loans to fertilizer producer Indorama Kokand and a loan of $2.8 million in Uzbek sum equivalent to a leading domestic producer and trader of disposable medical goods Healthline. The latter will use the funds to launch a production line dedicated to the manufacture of single-use medical gloves in order to meet the demand for affordable medical goods fuelled by the outbreak of the COVID-19 pandemic.
“The EBRD was the first international financial institution to adopt emergency measures to address the economic impact of the pandemic in March last year. We supported Uzbekistan’s bid to reduce the intensity of its carbon emissions and to develop up to 1 GW of renewable power generation capacity to meet the increasing demand for electricity in the country by helping to replace the country’s aging power sector infrastructure and to establish an effective regulatory framework,” EBRD Head of Uzbekistan Alkis Drakinos said.
The EBRD responded to the coronavirus pandemic with a record investment of €11 billion in 2020 through 411 projects. The Bank resolved to dedicate the entirety of its operations to focus on building back better economies and increased its annual business investment by 10 percent relative to 2019 when it provided €10.1 billion to finance 452 projects.
To date, the EBRD has invested over €2 billion through 92 projects in the economy of Uzbekistan.
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