Uzbekistan’s Reforms for Private Sector Growth, Social Protection, and Climate Action to Benefit from World Bank Support
WASHINGTON, October 3, 2024 – The World Bank’s Board of Executive Directors approved a financial package of $800 million in highly concessional loans to support Uzbekistan’s reform agenda geared towards advancing the country’s transition to an inclusive and resilient market economy.
The government’s structural reform program, backed by the World Bank, aims to improve Uzbekistan’s business environment, boost efficiency in agriculture, railways, and energy sectors, enhance public finance management, expand social protection services, and strengthen the country’s preparedness for environmental and climate change risks.
The financing, provided by the World Bank through highly concessional loans, offers the government low-cost, long-term repayment options that are more favorable than those available in international financial markets. As a result, Uzbekistan will benefit from lower loan repayment costs, freeing up more budget resources for its social and economic priorities.
The financing from the World Bank supports a development policy program led by the government, which is taking actions across a range of areas, including:
- Social protection system: Expanding the coverage of unemployment, sickness, and maternity benefits for specific groups of citizens.
- Combating gender-based violence: Improving legal mechanisms to provide more effective access to justice for survivors of domestic and sexual violence.
- Land security for farmers: Introducing legal mechanisms to guarantee land tenure security for farmers, enabling them to invest in agricultural practices that raise productivity and climate resilience.
- Business environment: Adopting legislation to bring into force stronger investor protection guarantees, enhanced investor services, and attract more foreign and domestic investment.
- Public finance management: Enhancing the transparency of reporting of fiscal risks and strengthening the government’s frameworks to manage public procurement.
- Tackling climate change: Developing legislationto reduce climate change-related emissions and improve energy efficiency across energy-intensive sectors.
- Water resource management: Developing institutional and legal mechanisms to increase the efficiency of water resource use, enhance the responsibility of water suppliers and users, attract public investments in the sector, and improve the joint management of transboundary water resources.
- Environmental and climate assessment: Improving the authorities’ capacity to assess climate, environmental, and air pollution impacts on various sectors and people’s health and well-being, and protect key environmental components (atmospheric air, soil, surface and underground water, and flora and fauna).
- Climate-sensitive investment: Increasing the share of state funds in climate-friendly projects implemented by private investors, which will help Uzbekistan use its depleting natural resources more effectively and accelerate its transition to a green economy.
- Railway sector: Enhancing the legal framework to improve the performance and profitability of the railway sector, attract private investments to modernize railway infrastructure, and reduce emissions in the sector.
- Energy sector:Implementing energy tariff reform to improve the sector’s operational effectiveness and attract private investments in its modernization. Taking measures to protect vulnerable groups from tariff increases. Improving the legal, regulatory, and institutional framework to expand private sector participation in renewable energy production.
Learn more about the World Bank’s operations in Uzbekistan.