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ADB approves two $400 million loans to Uzbekistan for energy sector reforms and financial market development
The Asian Development Bank (ADB) has approved two loans totaling $400 million that will support the Government of Uzbekistan’s initiatives to strengthen the country’s financial markets and develop a sustainable, market-oriented energy sector, the bank’s press service reported.
“The reforms that these programs will support will help create an enabling environment for regulators and companies to play their role in stimulating development by creating robust domestic financial markets and meeting energy needs while addressing climate change,” said ADB Director General for Central and West Asia Evgeny Zhukov.
The $300 million loan for Sub-Program 2 of the Energy Sector Reform Program will provide budget support to improve the structure, legal and regulatory framework, and governance of the energy sector to stimulate private sector investment and promote financial sustainability.
The program aims to support reforms aimed at reducing carbon emissions and increasing energy efficiency. These include an action plan for electricity market development, the establishment of an independent energy regulator to promote competition and ensure transparency, the unbundling and transfer of central purchasing and retail functions to newly created independent entities, and an energy sector master plan to increase the use of renewable energy, reduce greenhouse gas emissions, and modernize the country's transmission and distribution network.
The $100 million loan for Sub-Program 2 of the Financial Markets Development Program will support the implementation of regulatory and institutional reforms aimed at improving market conditions for streamlining financial transactions and services, as well as enhancing supply and demand management measures to grow Uzbekistan's capital and money markets.
Key initiatives supported under this subprogram include delegating all capital market regulation powers to a dedicated regulator, a proposed law consolidating all capital market-related regulations, publishing comprehensive market data online to ensure transparency and access, a public debt law supporting bond issuance to finance green and social projects, and a fintech regulatory sandbox regime to facilitate access to capital markets.
Uzbekistan joined ADB in 1995, and since then the bank has provided $12.5 billion in loans, grants, and technical assistance to the country.
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