The Asian Development Bank (ADB) has approved two policy-based loans totalling $400mn to assist the Government of Uzbekistan in enhancing its financial markets and fostering a sustainable, market-driven power sector.
A $300mn loan has been allocated for subprogram 2 of the Power Sector Reform Program. This funding provides budget support for policy actions aimed at restructuring the power sector, improving the legal and regulatory framework, and enhancing governance to attract private sector investment and promote financial sustainability.
Key reforms supported by this program include:
- Developing an action plan for the electricity market
- Establishing an independent energy regulator to promote competition and transparency
- Decoupling and transferring central buyer and retail functions to newly created independent entities
- Creating an energy sector masterplan to increase renewable energy, reduce greenhouse gas emissions, and modernize the transmission and distribution network
A $100mn loan has been approved for subprogram 2 of the Financial Markets Development Program. This loan supports regulatory and institutional reforms to streamline financial transactions and services and to expand Uzbekistan’s capital and money markets.
The initiatives include delegating all capital market regulatory responsibilities to a dedicated regulator, consolidating capital market-related regulations into a proposed law, publishing integrated market data online to enhance transparency, enacting a public debt law to facilitate the issuance of bonds for green and social projects, and establishing a fintech regulatory sandbox regime to facilitate capital market access.
Uzbekistan has been a member of ADB since 1995, and the bank has committed loans, grants, and technical assistance amounting to $12.5bn to the country. ADB aims to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while maintaining its efforts to eradicate extreme poverty. Established in 1966, ADB is owned by 68 members, 49 of which are from the region.
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