TASHKENT

The Asian Development Bank (ADB) has approved a $162 million loan to Uzbekistan to electrify 465 km of railway lines in the western regions of the country that will improve services and boost trade and tourism.

Under the project, the rail line linking Uzbekistan’s two ancient cities, Bukhara and Khiva, UNESCO world heritage sites, through Miskin and Urgench will be electrified. It will enable the operation of high-speed trains that run at up to 250 km per hour, cutting travel time between by up to two hours, the ADB said.

“Reliable and safe transport infrastructure is a key driver of economic growth, particularly in double landlocked Uzbekistan,” Yevgeniy Zhukov, the ADB Director General for Central and West Asia, said. “ADB’s project will help create an economic corridor linking the heritage-rich Khorezm region to the rest of Uzbekistan, supporting the recovery in tourism from COVID-19, and further establishing the country as a regional transit hub.”

The project is part of the Central Asia Regional Economic Cooperation (CAREC) Corridor 2, which links China to Europe via Central Asia. It will help improve Uzbekistan’s connectivity and trade with neighbouring countries and further afield, by expanding the frequency and quality of train services.

The ADB will also support the development of the tourism industry in the project area by developing an electronic ticketing system, training and involving women in tourism management, and guiding urban development around train stations with access and safety features for women, children, the elderly, and the mobility impaired.

After the project is implemented, annual passenger traffic is expected to increase from around 280,000 passengers this year to more than 1 million passengers by 2026, according to the ADB. Freight is projected to reach a total of 11.8 million tonnes per year by 2026.

The ADB said that Uzbekistan’s government had also requested a loan of $108 million from the Asian Infrastructure Investment Bank, subject to its board approval. The ADB will partially administer this loan. The ADB will also provide a $300,000 technical assistance grant to support key gender actions such as training select women students in railway operations and management.

Earlier this month, the ADB approved a $100 million loan to help Uzbekistan to support small and medium-sized enterprises and it includes the equivalent of $20 million denominated in Uzbek national currency.

The ADB’s policy-based loan will help Uzbekistan to undertake reforms to improve the enabling environment for small and medium-sized enterprises (SMEs) in the country. The loan will finance the first subprogramme of the ADB’s Small and Medium-Sized Enterprises Development Programme.

In October, the ADB approved a $100 million policy-based loan to support policy, regulatory, and institutional reforms needed to create an enabling environment for competitive financial markets in Uzbekistan.

Uzbekistan joined the ADB in 1995. Since then, the bank has committed loans, grants, and technical assistance amounting to $10.1 billion for the country.