Uzbekistan

Uzbekistan is located in Central Asia and is experiencing the strongest economic growth in the region. However it faces great challenges to ensure sustainable growth, which benefits all of its population, while limiting its effect on climate. Since 2015, AFD has supported the country in this direction, through projects in the fields of economic and political governance, urban development, energy transition and sustainable management of territories.

Context

Uzbekistan is located in the heart of Central Asia and is mainly made up of desert. It neighbors Kazakhstan, Turkmenistan, Tajikistan, Kyrgyzstan and Afghanistan and is the second largest economy in the region.

Uzbekistan has had an 8% growth rate for a decade, thanks to its exports of gas and agricultural products. The economy is also based on raw materials: in addition to gas, the country farms over 1 billion hectares of cotton and exploits metals and fertilizers.

However, there continue to be major social inequalities and young people, faced with unemployment and the lack of prospects, emigrate in large numbers to Russia to find a job. Moreover, substantial remittances are made by the Uzbek diaspora (USD 2.3bn in 2016).

The country needs to address several challenges: diversify its economy, meet increasing energy demand and create employment for young Uzbeks (40% of the population is under 18), while protecting the environment.

AFD was authorized to operate in the country back in 2011, under a mandate for “green and inclusive growth”. It opened a regional office in Tashkent in 2015 and launched its first project in Uzbekistan in 2016. It allocates loans to the State, public institutions and private actors.

AFD's Uzbekistan office is directly attached to the Eurasia regional office in Istanbul.

Our approach

Below, discover AFD's commitment.

AFD AND UZBEKISTAN: DIVERSIFYING THE ECONOMY AND GIVING YOUTH THE KEYS TO EMPLOYMENT

Thirty years after the end of the Soviet Union, Uzbekistan embarked on major reforms to open its economy to the global market, while protecting the most vulnerable households and strengthening the rule of law.

Signed in 2018 and then reinforced in 2019, a policy-based loan made in cofinancing with the Asian Development Bank affirms AFD’s support to the Uzbek government to initiate these economic and financial governance reforms and support it in its economic and social transformation over the long term.

These reforms relate in particular to improving the publication of economic data, strengthening public finance management, modernizing banking supervision and the governance of public enterprises. French experts also come to share their know-how in the management of public finances, public contracts and public enterprises.

With nearly 34 million inhabitants, Uzbekistan is the most populous country in Central Asia. Its cities are growing, stimulated by the emigration of inhabitants from rural areas. Faced with this challenge, the authorities wish to develop urban services, both in the largest cities to improve living conditions and in secondary cities to make them more attractive.

AFD supports the cities of Uzbekistan in the areas of waste and water. In particular, we support the city of Samarkand in its ambition to modernize solid waste management, by strengthening local capacities and setting up new equipment for the collection, treatment and recovery of this waste. We are also financing the installation and modernization of sanitation systems in three medium-sized cities (Karmana, Kitob and Shakhrisabz), through the construction of purification stations and the installation of collectors, associated with an important capacity building component local

Ensuring green and sustainable growth requires in particular a transition to clean energies, in order to limit greenhouse gas emissions. In Uzbekistan, the second largest electricity producer in Central Asia, the development of clean and renewable energies is today a priority for the Uzbek government, included in the country’s development strategy and confirmed by the ratification of the Paris Agreements in 2018.

AFD is supporting an Uzbek hydropower development project, via a program to secure and modernize the Charvak dam, near Tashkent, and to extend hydroelectric facilities in the Andijan region, associated with assistance technical. A policy-based loan encourages the implementation of reforms in the electricity sector for a low-carbon economy.

The growth trajectory of the Uzbek economy must take into account the issues of land management and protection of the country’s natural resources. Aiming at developing the agricultural sector and rural areas, AFD works alongside the Ministry of Livestock and Uzbek institutions active in the livestock sector, such as commercial banks and producer associations. The objective is to promote the development of sustainable animal production chains, integrating small producers
and mobilizing climate-beneficial investment instruments.