World Bank Grants $800 Mln to Support Uzbekistan’s Reforms

The World Bank’s Board of Executive Directors has approved an $800 mln financial package in highly concessional loans to help advance Uzbekistan’s ongoing structural reforms. The initiative seeks to drive poverty reduction, job creation, private sector growth, and greater competition in key sectors of the economy.

Through this operation, the World Bank will support a range of government policies designed to lessen the social impact of rising energy tariffs on low-income families, strengthen protection for women against workplace harassment and discrimination, and improve access to social services for vulnerable groups. The measures will also enhance competitiveness across the telecommunications, agriculture, and energy sectors, while facilitating Uzbekistan’s integration into global trade networks.

The concessional nature of the loans offers Uzbekistan long-term, low-cost repayment terms which are significantly more favourable than those available on the international market. This will help the government reduce debt servicing costs and free up additional budget resources for social and economic development priorities.

Key Reform Areas

Social Protection: Cash compensation for low-income households will rise from UZS 270,000 ($22) to UZS 1,000,000 ($81.7) per year to help offset increased utility tariffs for electricity, heating, and gas.
Women’s Empowerment: New legislation will protect women from sexual harassment and violence at work, while prohibiting employers from discriminating against women based on pregnancy or childcare responsibilities.
Social Services: Uzbekistan plans to open its social service market to accredited private and non-governmental providers, expanding support for vulnerable groups.
SOE Reform: A National Investment Fund will be established to manage and privatise state-owned enterprises more effectively. An independent telecommunications regulator will also be set up to curb state dominance and attract private investment.
Agriculture: The government will introduce agricultural risk insurance and further liberalise the cotton sector. This will allow textile firms to buy cotton directly from farmers.
Trade Liberalisation: Uzbekistan will accelerate its WTO accession and simplify export procedures by scrapping certain export permits. Exclusive rights granted to specific firms in sectors like energy, oil and gas, and agriculture will also be abolished.
Power Sector Reform: Private investors will be allowed to participate in electricity distribution. Renewable energy producers will gain the right to sell power directly to consumers.
Energy Efficiency: A new National Energy Efficiency Agency will coordinate investment in clean technologies and introduce financial incentives for solar energy, heat pumps, and energy-saving building upgrades.
Green Procurement: Environmental standards will be integrated into public procurement, encouraging the purchase of eco-friendly goods and services with state funds.

The World Bank emphasised that this operation is part of its long-term partnership with Uzbekistan, aimed at supporting inclusive, sustainable growth and ensuring that the benefits of reform reach all citizens.

Kursiv also reports that ADB has approved a $500 mln policy-based loan to support Uzbekistan’s ongoing economic transformation.