A new agreement was signed between the international finance Corporation and Uzpromstroybank on supporting the green economy, small and medium-sized businesses
17/09/2021 - 18:03 4137
IFC's new investments will help increase access to finance for small businesses in Uzbekistan, assist in the development of green finance, and support the privatization program of the country's banking sector.
The loan of IFC JSCB "Uzpromstroybank" in the amount of 75 million US dollars, aimed at climate financing and increasing lending to small and medium-sized enterprises (SMEs) in Uzbekistan, will support the process of further privatization of the bank. The IFC financing denominated in Uzbek soums will provide the bank with access to long-term financing in the national currency, which is limited on the market due to the COVID-19 pandemic, and will help in the bank's transformation with the possibility of further conversion of the IFC loan into the bank's shares.
Part of the project financing will be directed to lending to SMEs, and 50 percent of the loan will be used to finance projects related to climate change, which will allow the bank to expand its green banking program.
As part of the country's financial sector transformation program, Uzbekistan plans to transfer shares of state-owned banks to investors. Privatization will attract new capital, global experience and modern technologies that will have a positive impact on the banking sector and customers. Currently, the banking sector of Uzbekistan is dominated by state-owned banks: 83 percent of banking assets belong to state-owned banks.
"IFC welcomes Uzbekistan's determination to attract private investment in the country's financial sector," said Mahtar Diop, Managing Director of IFC. "Our financing is aimed at helping Uzpromstroybank prepare for privatization and become a bank that creates standards in the field of lending to small and medium-sized businesses and green financing. This initiative is in line with IFC's strategy to support green growth by stimulating investment and identifying opportunities to help Uzbekistan achieve its climate goals and build a greener and more sustainable future."
Since 2019, IFC has been cooperating with Uzpromstroybank, the second largest bank in the country, in order to prepare for privatization by strengthening the bank's corporate governance practices, commercializing its operations and reducing state participation in decision-making, as well as assisting the bank in the development of green banking.
As the Chairman of the Management Board of JSCB "Uzpromstroybank" Sakhi Annaklichev noted: "This agreement was the result of our hard work with the IFC, carried out in accordance with the Decree of the President of Uzbekistan dated May 12, 2020 No.PD-5992 "On the strategy for reforming the banking system of the Republic of Uzbekistan for 2020-2025" and the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated March 29, 2021 No.161 "On measures for the privatization and transformation of the joint-stock commercial bank "Uzpromstroybank" with the participation of the International Finance Corporation".
"The funds of the IFC, denominated in Uzbek soums, will expand the bank's capabilities in lending investment projects in the national currency, support its intentions to de-dollarize the loan portfolio, and also help in achieving the goals in the framework of the process of preparing for privatization. It is planned that the funds of the IFC will be used for lending to small and medium-sized businesses, as well as for financing green projects," added Sakhi Annaklichev, Chairman of the Management Board of Uzpromstroybank.
The most populous country in Central Asia, Uzbekistan is implementing unprecedented economic reforms. IFC is supporting this reform process by providing investment and advisory services in key areas. As of September 1, 2021, IFC's investment obligations in Uzbekistan amounted to US $ 158 million. IFC's consulting programs assist in the privatization of state-owned enterprises; the reform of the cotton sector; the development and diversification of the financial market; the development of the chemical industry and the implementation of public-private partnerships in energy and healthcare.
Stay Connected
Information service of the
Ministry of Economic Development and Poverty Reduction
