Tashkent, Uzbekistan, September 17, 2021-A new investment from IFC will help small businesses in Uzbekistan improve their access to finance, develop the country’s green banking capacity and support privatization in the country’s banking sector.
IFC’s $ 75 million loan to Uzpromstroybank will support the bank’s privatization path, as it aims to finance more climate-friendly projects and expand lending to small and medium-sized enterprises (SMEs) in Uzbekistan. The financing will be structured in the form of a loan linked to the Uzbek soum to allow the bank to access long-term financing in local currency. Long-term financing – which is not readily available in the market given the COVID-19 pandemic – will further incent the transformation of the bank with an option for IFC to convert the loan into equity.
While the project proceeds will be allocated to on-lending to SMEs, 50% of the loan will be devoted to climate finance, allowing the bank to expand its green bank program.
Uzbekistan is considering selling shares of state-owned banks to investors as part of a campaign to transform the country’s financial sector. Privatization will bring new capital, global expertise and modern technology that will benefit the banking industry and its customers. Currently, state banks dominate the banking sector in Uzbekistan – 83% of banking assets are held by state banks.
âIFC applauds Uzbekistan’s determination to attract private investment in its financial sector,â said Makhtar Diop, Managing Director of IFC. âOur funding aims to help Uzpromstroybank prepare for its privatization and become a benchmark in SME lending and green finance. This initiative is in line with IFC’s strategy to support green growth by stimulating investments and seizing opportunities to help Uzbekistan meet its climate goals and build a greener and more resilient future.
Since 2019, IFC has been working with Uzpromstroybank, the country’s second-largest bank, to prepare for privatization by strengthening the bank’s corporate governance practices, commercializing its operations and reducing state participation in the decision-making, while helping the bank to build a green environment. bank franchise.
âThis agreement is the result of our intensive work with IFC to support the transformation of Uzpromstroybank and its subsequent privatization. IFC’s loan linked to the Uzbek soum will help expand the bank’s ability to finance domestic currency investment projects, de-dollarize its loan portfolio and support its path to privatization. IFC’s investment will be used to increase funding for SMEs and green projects, âsaid Sakhi Annaklichev, Chairman of the Board of Directors of JSCB Uzpromstroybank.
Uzbekistan, the most populous country in Central Asia, is undergoing an unprecedented economic transformation. As of September 1, 2021, IFC had investment commitments of $ 158 million in Uzbekistan. IFC’s advisory services aim to help the government of Uzbekistan prepare public banks for privatization, develop and diversify the financial market, transform the cotton sector, develop the chemical industry and pilot public-private partnerships (PPP) in the energy and health sectors. .
IFC, a member of the World Bank Group, is the world’s largest private sector-focused development institution in emerging markets. We work in over 100 countries, using our capital, expertise and influence to create markets and opportunities in developing countries. In FY2021, IFC committed a record $ 31.5 billion to private businesses and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
In regards to Uzpromstroybank (UzPSB)
UzPSB is the oldest bank in the Republic of Uzbekistan. Its history dates back to the opening of the Central Asian office of the Industrial Bank in Tashkent in 1922. The bank will celebrate its centenary next year. Today, the UzPSB is one of the largest banks in the country in terms of asset size, loan portfolio and deposit base. Beginning in 2018, with the help of IFC consultants, the bank initiated significant business process reforms, which led to the implementation of green banking practices, the introduction of special lending facilities for women entrepreneurs and online banking products. For more information, please visit www.sqb.uz