TASHKENT

The European Bank for Reconstruction and Development (EBRD) will take part in the pre-privatisation process of Uzbekistan’s Uzpromstroybank by providing a $50 million credit line and eventually become one of the bank’s shareholders, the country’s Ministry of Economic Development and Poverty Reduction said.

An agreement was signed between Uzbekistan’s Finance Ministry, Uzpromstroybank and the EBRD.

“During the transformation process the loan will be converted into the authorised capital of the bank, as a result, the EBRD will become a shareholder of Uzpromstroybank, one of the largest banks in Uzbekistan,” the ministry said in a statement.

Rated ‘BB-‘ by Fitch Ratings and S&P, Uzpromstroybank, also known as Uzsanoatqurilishbank, is among several state-owned banks which are facing privatisation under the government programme.

Uzpromstroybank’s privatisation is the latest in a series of steps taken by the Central Asian country to attract the foreign investors it once viewed as a threat. Under Islam Karimov, who had led Uzbekistan since before the Soviet breakup, the country’s economy remained isolated. That ended when President Shavkat Mirziyoyev came to power following Karimov’s death in 2016, and made attracting foreign investors a priority of his ambitious plan to open Uzbekistan to the outside world.

Mirziyoyev issued a decree in October 2020 ordering the full or partial privatisation of over 620 state-owned companies and properties. The list includes state companies in banking, energy, mining, chemical sectors, as well as Uzbekistan Airways.

In May, the State Assets Management Agency announced the sale of two state-owned banks – Poytaxt Bank and UzAgroExportBank – through an open process.

The EBRD also provided Uzpromstroybank with a $45 million loan to expand its Green Economy Financing Facility, launched in Uzbekistan in 2019, to support green finance for small private-sector companies investing in green technology solutions. The loan will also help the bank in lending to domestic small and medium-sized enterprises (SMEs) willing to invest in climate mitigation and adaptation technologies and services, the EBRD said.

With a network of 45 branches and 170 outlets across Uzbekistan, Uzpromstroybank is well placed to support SMEs across the country, including in small villages and remote rural areas, the EBRD said.

To date, the EBRD has invested more than €2.4 billion through 97 projects in the economy of Uzbekistan.