Uzbekistan has secured an additional $800 million loan from the World Bank

Uzbekistan has secured an additional $800 million loan from the World Bank. This allocation, provided on special preferential terms, was confirmed by the bank's press service.

The World Bank's Board of Executive Directors has sanctioned this operation to bolster Uzbekistan's development policy. This financial aid is intended to assist the government in implementing a new phase of reforms encompassing social, economic, and climate-related domains. The primary objectives of these reforms are to expedite the country's transition to a market-oriented economy, ensure equal economic opportunities for citizens, and establish a robust foundation for sustainable national economic growth.

"While Uzbekistan has made significant strides in transitioning to a market economy, there remains a need to expedite this process and pivot the current economic model toward a more environmentally conscious and equitable framework. These measures will enable the country to attain several socio-economic development and environmental protection goals," stated the announcement.

The government's targets include halving the poverty rate by 2026 and positioning the country among upper-middle-income economies by 2030. To achieve these milestones, expediting economic growth is imperative. This necessitates reducing state control over the economy and empowering the private sector as the primary driver of economic progress.

"The new World Bank operation aims to facilitate the reduction of state control in pivotal sectors outlined in the government's agenda, such as agriculture, railways, chemical industry, and energy. It offers an opportunity for more active involvement in development. Additionally, this operation will fortify social and legal protections for vulnerable populations, addressing challenges related to climate change and environmental preservation," remarked Marco Mantovanelli, the Head of the World Bank's representative office in Uzbekistan.

As part of this operation, the World Bank will extend $800 million in financial aid to the government in the form of loans on preferential terms. These funds will be provided at lower interest rates and for an extended repayment period compared to current borrowing opportunities in international financial markets. Consequently, Uzbekistan's loan repayment costs will be substantially reduced, allowing the country to conserve vital financial resources that can be redirected toward prioritized socio-economic initiatives.

"The government is resolutely committed to a reform program that will transform Uzbekistan into a more open and competitive market economy. The World Bank's provision of expertise, international experience, and financing is instrumental in assisting the country to achieve this objective," emphasized Jasur Karshibayev, Uzbekistan's Minister of Economy and Finance.

The financial resources furnished by the World Bank will support pivotal reforms and necessary measures across several vital sectors of the economy, including energy, chemical industry, agriculture, state fiscal obligations management, social protection, ecology, and railway infrastructure enhancements.

This development follows an earlier report detailing the World Bank's $50 million loan commitment to Uzbekistan.