The new World Bank report, “Greening” Uzbekistan’s Public Funds to Combat Climate Change, analyzes how public funds can be utilized to support projects and initiatives aligned with the government’s objectives of environmental protection, enhancing climate resilience, and attracting additional private investments into relevant sectors of the economy.
Uzbekistan is taking steps towards transitioning to a green economy. Further progress in this area requires strengthened collaboration between the government, state financial institutions, state-owned enterprises, and the private sector.
In recent years, the Government of Uzbekistan has undertaken several commitments to accelerate the transition to a green economy. In particular, goals and measures have been identified to reduce greenhouse gas emissions, expand renewable energy production, and improve energy and water efficiency. These initiatives are not merely efforts to improve the environment and adapt to the consequences of climate change but also strategic steps to accelerate the country’s transition to market principles and build an environmentally and climate-resilient economic growth model for the future.
The participation of state financial institutions and state-owned enterprises in these processes is crucial for advancing the green economy.
Currently, state financial institutions provide approximately 70% of all loans in the country, supporting economic activity. Meanwhile, in 2024, state investment funds, such as the Uzbekistan Fund for Reconstruction and Development, are estimated to have invested around 10% of GDP in implementing projects across various sectors. Additionally, state-owned enterprises hold a dominant position in the energy, industrial, agricultural, and transport sectors. Together, these institutions represent a largely untapped source of investment in the green economy.
The Ministry of Economy and Finance (MoEF) plays a key role in unlocking the green potential of state-owned enterprises. As the principal shareholder in many state financial institutions and state-owned enterprises, the MoEF can require these enterprises to establish appropriate green investment targets aimed at supporting environmentally friendly and climate-resilient projects.
Potential Leaders in Green Investments
The World Bank report recommends taking measures to transform certain state financial institutions and state-owned enterprises into so-called leaders in green investments. These institutions could provide the necessary support for adopting environmentally friendly technologies and business models, setting an example for the private sector. Through investments in clean energy, energy- and water-efficient agriculture, climate-resilient infrastructure, and eco-friendly and energy-efficient housing, these organizations could become a driving force in accelerating Uzbekistan’s green economy transition.
Among those with the potential to lead green finance promotion, the report highlights several organizations, including the Entrepreneurship Development Company JSC, Business Development Bank JSCB, and the Uzbekistan Mortgage Refinancing Company JSC.
In particular, the Entrepreneurship Development Company JSC already provides financial assistance to the private sector in implementing solar energy projects and other green initiatives. By 2026, it plans to allocate 35% of its financing to support environmentally sustainable projects.
The Business Development Bank JSCB integrates environmental and climate sustainability considerations into its operational activities. Specific targets have been set for providing financial resources to help businesses adapt to the impacts of climate change.
The Uzbekistan Mortgage Refinancing Company JSC issues green bonds. The funds raised from selling these debt securities will be used to finance the modernization of buildings with energy-efficient construction materials.
At the same time, state-owned enterprises such as Uzkimyosanoat JSC in the chemical industry and Issiqlik Elektr Stansiyalari JSC in power generation are exploring opportunities to reduce greenhouse gas emissions and introduce environmentally friendly technologies into their operations. Their efforts in this area create a positive impact and can serve as an example for similar measures to be adopted by private-sector enterprises.
The Uzbekistan Direct Investment Fund and the State Agricultural Support Fund can also play a significant role in facilitating the country’s transition to a green economy. Specifically, the Direct Investment Fund can attract foreign investors interested in implementing environmentally and climate-resilient projects across various sectors. Meanwhile, the State Agricultural Support Fund can enhance the sector’s resilience to climate change by incorporating environmental requirements for its financing recipients.
With strong political leadership, clear strategies, and defined performance targets, public funds can be used more effectively to accelerate the country’s green transition, paving the way for environmentally and climate-resilient development in the future while attracting private capital to priority sectors.
This report was prepared with financial support from the Climate Support Facility, managed by the World Bank.
The full report can be downloaded at the following links:
[In Uzbek] / [In English]