Uzbekistan secures $800 mn World Bank loan to support economic reforms, social protection, and climate action — Daryo News

Uzbekistan secures $800 mn World Bank loan to support economic reforms, social protection, and climate action

The World Bank has approved an $800mn concessional loan to support Uzbekistan’s ambitious reform program aimed at strengthening its transition to an inclusive and resilient market economy. This financing will help Uzbekistan advance reforms in key areas, including the business environment, agriculture, energy, and railways, while also addressing climate change and expanding social protection.

“Uzbekistan will benefit from lower loan repayment costs, freeing up more budget resources for its social and economic priorities,” the World Bank stated. These low-cost, long-term loans provide more favorable repayment options than those available in international financial markets, allowing the government to focus on essential reforms.

Key aspects of the reform program include improving unemployment, sickness, and maternity benefits, combating gender-based violence, and introducing legal mechanisms to guarantee land tenure security for farmers. This will enable them to invest in agricultural practices that increase productivity and climate resilience.

To improve the business environment, Uzbekistan will adopt legislation to strengthen investor protections, enhance public finance management, and ensure transparency in public procurement processes. In the energy sector, the government plans to implement tariff reforms to boost operational efficiency while protecting vulnerable groups from increased costs. The World Bank also supports expanding private sector participation in renewable energy production.

Addressing climate change is a major focus of the loan. The funding will help Uzbekistan develop legislation to reduce emissions, improve energy efficiency in key sectors, and increase climate-sensitive investments. The government will also work on water resource management, introducing reforms to enhance water use efficiency and transboundary water management.

“This financing is crucial for strengthening Uzbekistan’s preparedness for climate and environmental risks,” the World Bank stated. By improving institutional capacity to assess climate impacts, the country aims to protect critical environmental components like water, air, and soil.

The loan will also support the modernization of Uzbekistan’s railway sector to improve performance and reduce emissions. Legal frameworks will be established to attract private investment into modernizing railway infrastructure, further contributing to Uzbekistan’s green transition.

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