World Bank Supports Uzbekistan's Economic and Environmental Reforms

The package will assist the government in advancing reforms across multiple sectors, including agriculture, energy, public finance, social protection, and climate resilience.

The World Bank’s Board of Executive Directors has approved an $800 million financial package in highly concessional loans to support Uzbekistan's ambitious reform agenda aimed at transitioning the country into an inclusive and resilient market economy. The package will assist the government in advancing reforms across multiple sectors, including agriculture, energy, public finance, social protection, and climate resilience.

Uzbekistan’s government, in partnership with the World Bank, is pushing forward structural reforms designed to improve the business environment, increase efficiency in key sectors such as agriculture, railways, and energy, and boost public finance management. These reforms are crucial to expanding social protection services, strengthening environmental safeguards, and preparing the country to confront the risks of climate change.

The concessional loans provided by the World Bank come with low interest rates and long repayment terms, offering Uzbekistan favourable financial conditions compared to standard international markets. This allows the government to reduce loan repayment costs, freeing up more budgetary resources to focus on social and economic initiatives.

The financing will bolster Uzbekistan’s development policy program, which includes reforms across several areas:

Social Protection: Expanding coverage for unemployment, sickness, and maternity benefits to protect vulnerable groups.

Gender-Based Violence: Strengthening legal mechanisms to improve access to justice for survivors of domestic and sexual violence, a crucial step towards gender equality.

Agricultural Land Security: Introducing legal mechanisms to provide land tenure security for farmers, encouraging investment in sustainable and climate-resilient agricultural practices.

Business Environment: Adopting new legislation to strengthen investor protection guarantees and attract more foreign and domestic investments by enhancing investor services.

Public Finance Management: Increasing transparency in fiscal risk reporting and improving public procurement frameworks to enhance financial accountability.

Climate Change Mitigation: Developing new legislation aimed at reducing carbon emissions and improving energy efficiency in the country’s energy-intensive sectors.

Water Resource Management: Enhancing the efficiency of water resource use through institutional and legal reforms, improving water supply systems, and fostering joint management of transboundary water resources.

Environmental Protection: Increasing the authorities' capacity to assess environmental and health impacts of pollution, while strengthening measures to protect key natural resources, including air, soil, and water.

Climate-Sensitive Investments: Boosting the share of state funds in climate-friendly projects to accelerate Uzbekistan's transition to a green economy, with a focus on preserving depleting natural resources.

Railway Sector Modernization: Reforming the legal framework to improve the performance and profitability of the railway sector while attracting private investments to modernize infrastructure and reduce emissions.

Energy Sector Reforms: Introducing energy tariff reforms to enhance the sector's operational effectiveness and attract private investments in renewable energy projects. Measures will be taken to protect vulnerable populations from tariff hikes as reforms are implemented.

This financial support from the World Bank will help Uzbekistan meet its long-term goals of sustainable growth, economic diversification, and environmental protection while enabling a smooth transition to a green and resilient economy. The reforms align with Uzbekistan's broader efforts to modernize its infrastructure, attract global investment, and position itself as a competitive player in the international market.