The Asian Development Bank (ADB) has approved two policy-based loans totaling $400 million that support the Government of Uzbekistan’s initiatives to enhance the country’s financial markets and develop a sustainable, market-led power sector.

“Strong participation of the private sector is vital to Uzbekistan’s economic growth and transformation,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “Reforms supported by these programs will help shape an enabling environment for regulators and firms to play their part in boosting development by building robust domestic financial markets and addressing energy needs while tackling climate change.”

A $300 million loan for subprogram 2 of the Power Sector Reform Program provides budget support for policy actions aimed at improving the power sector’s structure, legal and regulatory framework, and governance to encourage private sector investment and promote financial sustainability.

The program supports reforms to reduce carbon intensity and improve energy efficiency. These include an action plan to develop the electricity market; establishment of an independent energy regulator to promote competition and ensure transparency; decoupling and transferring of central buyer and retail functions to newly created independent entities; and an energy sector masterplan to increase renewables, reduce greenhouse gas emissions, and modernize the country’s transmission and distribution network.

A $100 million loan for subprogram 2 of the Financial Markets Development Program supports regulatory and institutional reforms focused on improving market facilitation to streamline financial transactions and services as well as increasing supply and demand measures to grow Uzbekistan’s capital and money markets.

Among the key initiatives supported in this subprogram are the delegation of all capital market regulatory responsibilities to a dedicated regulator; a proposed law consolidating all capital market-related regulations; publishing integrated market data online to promote transparency and access; a public debt law that supports the issuance of bonds to finance green and social projects; and a fintech regulatory sandbox regime to facilitate capital market access.