Uzbekistan Business & Economy - The Times Of Central Asia

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Education Reform

World Bank Approves $250 Million Loan to Expand Student Financing in Uzbekistan

The World Bank has approved a $250 million loan to support Uzbekistan’s ambitious reform of its student financing system, the institution announced on December 11. The funding will back the Edulmkon Program, a three-year initiative aimed at expanding equitable access to higher and vocational education across the country. Scheduled for implementation between 2026 and 2028, the program is expected to benefit approximately 600,000 young people. Roughly 80% of the loan will be allocated to tuition loans for students from low-income families and for women, groups that continue to face significant barriers to accessing higher education. Uzbekistan, home to around 10 million people aged 14 to 30, has made educational reform a national priority in recent years. This push has led to a surge in the number of universities and vocational institutions, as well as a dramatic rise in enrollment. Between 2017 and 2024, youth participation in higher education increased from 8% to 48%. However, the rapid expansion has exposed weaknesses in the country’s student loan system, which is based on state subsidized loans issued through commercial banks. The World Bank has noted that the current model is not well aligned with labor market needs, as loans are not directed toward high demand fields such as science, technology, engineering, and mathematics (STEM), as well as information and communication technology (ICT). This misalignment has contributed to graduate underemployment, while gender disparities persist. Although women represent more than half of all university students and are the primary recipients of tuition loans, only one-third of female students are enrolled in STEM disciplines. The Edulmkon Program, to be led by the Ministry of Economy and Finance, will address these challenges through a series of reforms. These include modernizing tuition loan management, improving inter-agency coordination, and launching a centralized digital platform to streamline loan processing and improve transparency. The program will also revise eligibility and subsidy criteria to better serve vulnerable students. A cornerstone of the reform is the introduction of an income-contingent loan system, where repayments are based on a graduate’s income. This approach is designed to protect low-income borrowers and those facing temporary unemployment after graduation. By the end of 2028, students are expected to access loans through 12 participating commercial banks operating in coordination with the Ministry. The World Bank also noted that the program aims to attract approximately $30 million in private capital, reducing fiscal pressure on the state while expanding access to education financing.

Foreign Debt

Opinion: Is Uzbekistan Importing a Future Crisis?

Once hidden from the view of international investors, Uzbekistan is rapidly rewriting its economic narrative. Over the past eight years, the nation attracted over $113 billion in foreign investment, drawing financial firms and mutual funds eager to seize the momentum of Tashkent’s trade liberalization and its ambition to double GDP by 2030. And rightly so; 40% of the country’s population, which is the largest in Central Asia, is under the age of 25, while its gold production is within the top ten globally. Uzbekistan is in its breakout moment. With Uzbek bonds receiving a further upgrade to a BB rating from both Fitch and S&P Global, comparisons to Vietnam or Indonesia no longer seem aspirational. However, the question remains: Is Uzbekistan ready to set foot on the financial global stage, and, more importantly, is it structurally equipped to stay there? Amidst its sweeping economic transformation, IMF officials have warned the administration to remain vigilant against economic shocks beyond its control: volatile commodity prices, contractions in foreign investor liquidity, and consequently, tighter external financing. These warnings are not theoretical. They come from decades of IMF experience with financial crises in other emerging markets, such as the Latin American debt crises in the 1980s, the “Tequila Crisis” in 1994, and the “Asian Flu” in 1997. In those historic cases, newly liberalized economies suffered not because they lacked growth, but because they lacked a defense against the liquidity cycle. The economic reality is that global capital flows are often driven by decisions made in New York or London, not Tashkent. This economic phenomenon is often explained by the “liquidity model,” which argues that changes in exogenous liquidity conditions - driven by the economic situation of investor countries - shape capital flows into emerging markets. Thus, without sufficient financial market depth, emerging capital markets cannot absorb external shocks. And when global liquidity tightens, these flows can abruptly reverse, resulting in prolonged economic instability and loss of monetary sovereignty. The sequence unfolds as follows: capital inflows surge and balance-sheet vulnerabilities quietly build up; then an external shock - such as a monetary tightening in the creditor economy - causes inflows to slow; the local currency depreciates; and a feedback spiral of declining confidence and weakening balance sheets pushes the economy into crisis. Currency loses trust, struggles to recover, and money flees. Some initial signs of this pattern can be observed in Uzbekistan’s current boom. The economy is increasingly reliant on foreign borrowing: external debt as a share of GDP rose from 24.7% in 2017 to 61.4% in 2024, reaching $78.5 billion by June 2025. According to CEIC benchmarks, this level is already comparable to Poland’s 51.8% and Malaysia’s 69.9%, and now exceeds Kazakhstan’s 59.2%, reflecting growing dependence on financing from the World Bank, Eurobond investors, and major East Asian institutions. High debt levels alone do not necessarily imply instability. They can reflect efforts to accelerate domestic development. The real source of fragility in past crises was not the volume of debt but its denomination. When...

Organization of Turkic States (OTS)

Organization of Turkic States Discusses Key Eurasian Energy Projects

At the 5th meeting of ministers responsible for energy within the Organization of Turkic States (OTS), held on December 10 in Istanbul, OTS Secretary General Kubanychbek Omuraliev outlined major joint energy initiatives underway among member states. Founded in 2009, the OTS comprises Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, and Turkmenistan. Hungary and Northern Cyprus participate as observer states. Omuraliev touched upon the following projects: Major oil and gas routes such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Baku-Tbilisi-Erzurum (BTE) gas pipeline, South Caucasus Pipeline, Trans-Anatolian Natural Gas Pipeline (TANAP), Trans Adriatic Pipeline (TAP), and the Iğdır-Nakhchivan gas pipeline; A strategic partnership between Azerbaijan, Kazakhstan, and Uzbekistan to develop and transmit green energy; The Azerbaijan-Georgia-Turkey-Bulgaria Green Energy Corridor, which extends the Central Asia-Azerbaijan corridor and opens new avenues for energy exports to Europe; Construction of the Kambarata-1 Hydropower Plant in Kyrgyzstan, a project jointly developed with Kazakhstan and Uzbekistan; and A planned Black Sea submarine cable to transmit renewable energy. Omuraliev emphasized that enhanced intra-OTS cooperation bolsters both the economic potential of member states and regional energy security. Ministers at the meeting noted the significant fossil fuel and clean energy resources held by OTS members and observers, describing the region as a strategic energy bridge between Asia and Europe. They stressed that advancing practical cooperation is essential amid growing global energy demand and the accelerating energy transition. Participants agreed to move forward with joint projects under the OTS framework, including the establishment of a Regional Center for Technologies and Green Initiatives. As previously reported by The Times of Central Asia, on December 5, the Board of Governors of the Turkic Investment Fund announced in Bishkek that the fund will begin operations in the first quarter of 2026. The Turkic Investment Fund is the first dedicated financial institution jointly established by OTS member states. Headquartered in Istanbul, its mandate is to promote economic cooperation, boost intra-regional trade, and support sustainable development by financing major joint initiatives across the region.

Electricity Supply

Uzbekistan Announces New Electricity Rationing Amid Power Shortages

Uzbekistan has announced a new electricity rationing schedule as power shortages strain the national grid. The Ministry of Energy said temporary evening outages would help stabilize supply while repairs and emergency measures continue. The outages, which began this week, are concentrated during peak hours between 5:00 p.m. and 9:00 p.m. and are expected to last until mid-January. Causes of the Shortfall The crisis stems from a major failure at the Syrdarya thermal power plant, one of the country’s largest. A newly installed Mitsubishi gas turbine suffered a mechanical fault in late November, forcing the station to shut down part of its capacity. A replacement 114-ton rotor was delivered by air on December 8, and engineers expect to finish installation and testing in four weeks. Seasonal factors have also reduced the available power supply. With winter’s shorter daylight hours, output from solar stations has dropped significantly, increasing the load on the grid. An unexpected gas supply disruption has further strained generation: Energy Minister Jurabek Mirzamakhmudov revealed that an accident in a neighboring country’s network cut Uzbekistan’s gas intake by about 6 million cubic meters per day. Natural gas fuels a large share of the country’s power plants, so this drop in fuel supply, combined with cloudy weather, has constrained electricity production. “Because of rain, there was neither wind nor sun,” Mirzamakhmudov said. These factors combined have left the grid struggling to meet peak demand in early December. Peak-Hour Outages to Balance Demand Officials have emphasized that rolling blackouts will be kept brief and targeted; each outage is not expected to last more than about two hours, and consumers will be notified in advance whenever possible. By shedding some load at peak times, the grid can avoid more dangerous unplanned breakdowns and ensure critical facilities remain powered. Residents have also been urged to use electricity sparingly and to monitor official announcements, rather than panic if an interruption occurs. The Energy Ministry has stressed that rumors of any nationwide “blackout” are unfounded, and any power cuts will be localized and limited in scope, not a return to the wide-ranging outages seen in the past. Citizens have been cautioned against spreading unverified information on social media and encouraged to rely on updates from authorities. Winter Energy Challenges and Reforms Winter months have historically tested Uzbekistan’s energy infrastructure. In previous years, electricity deficits forced scheduled outages – commonly known as rolling blackouts – across the country. However, officials note that the situation has improved markedly due to new power projects and efficiency measures. According to Energy Ministry data, the volume of electricity consumption that had to be curtailed through such restrictions fell from about 4 billion kWh in 2013 to just 357 million kWh in 2024. Even during the Central Asian energy crisis of winter 2022, Uzbekistan’s forced power cuts totaled around 2 billion kWh, a figure that has since sharply declined as new capacity comes online. Uzbekistan has been racing to expand its electricity generation to meet growing demand and reduce chronic winter shortages....

Agriculture

Uzbekistan to Import 300,000 Animals, Launch $367 Million in Livestock Projects

Uzbekistan’s President Shavkat Mirziyoyev has announced a sweeping expansion of the country’s livestock sector as part of broader agricultural reforms. Speaking on December 10 at a meeting with industry specialists to mark Agriculture Workers’ Day, the president outlined key initiatives aimed at boosting domestic production of meat and dairy products. According to the president’s press secretary, the government will import 100,000 head of cattle and 200,000 sheep and goats in 2026. Farmers working within cotton and grain clusters will be permitted to construct lightweight livestock facilities of up to 20 sotok (approximately 0.2 hectares) on their existing plots, a move designed to better integrate crop and livestock operations. Uzbekistan will also extend its subsidy program for imported breeding cattle and day-old chicks for an additional five years. To support the livestock sector’s growth, the government plans to allocate $157 million from funding provided by the World Bank and the International Fund for Agricultural Development. These loans will be issued to farmers at an interest rate of 17% for a term of up to 10 years, including a three-year grace period. Additional financing will include $150 million from the Japan International Cooperation Agency (JICA) and $60 million from the Asian Development Bank. Authorities say the efficient use of these resources could support the launch of 1,000 projects valued at 5 trillion UZS, including the establishment of 340 small livestock farms across 167 districts, modeled after a French framework. Last year, the European Union Delegation to Uzbekistan and the French Development Agency (AFD) signed agreements to support sustainable livestock development. The EU committed €4.7 million in grants for technical assistance and an additional €7.9 million to support Uzbekistan’s drinking water program, helping lay the groundwork for these agricultural reforms.

Finance

Wallet in Telegram Launches in Uzbekistan, Expanding Crypto Access to Millions

Wallet in Telegram, a global digital asset service integrated directly into the Telegram messaging app, officially launched in Uzbekistan on December 9, opening up crypto access to more than 27 million local users. The move marks a major expansion of Telegram’s financial ecosystem and reinforces Uzbekistan’s role as a regional leader in regulated digital finance. The service allows users to buy, store, and transfer cryptocurrencies without needing to install additional applications. Registration takes only seconds, and transactions can be completed using local payment systems such as Humo, Visa, and Mastercard. Wallet currently supports Bitcoin, Toncoin, USDT, and over 200 other digital assets. According to the company, the goal is to make crypto transactions as seamless as sending a message, an especially relevant approach in Uzbekistan, where Telegram usage exceeds 88% of the internet-connected population. By embedding financial tools into an everyday platform, Wallet aims to normalize digital asset use and broaden access to global financial technologies. The technical infrastructure for Wallet’s Uzbekistan launch is provided by Asterium, the country’s largest crypto ecosystem and a key fintech player. Asterium is responsible for ensuring secure transactions, identity verification, and data protection. “Our mission at Asterium is to make working with crypto assets simple and accessible for everyone. Wallet in Telegram reflects our product philosophy: it is convenient, transparent, and secure, meaning it is genuinely useful for people,” said Komilhodja Sultonov, CEO of Asterium. The service was licensed by Uzbekistan’s National Agency for Perspective Projects (NAPP), the regulatory body overseeing the digital asset sector. Uzbekistan has developed one of Central Asia’s most comprehensive legal frameworks for crypto, with a strong focus on user protection and structured innovation. In response to questions from The Times of Central Asia, NAPP clarified how Wallet aligns with current regulations. Askarjon Zakirov, Head of the Crypto-Assets Turnover Sphere Development Department, emphasized that Uzbekistan legally distinguishes crypto assets from fiat currency. “Firstly, we say that a crypto asset is not a means of payment or a monetary equivalent,” he said. [caption id="attachment_40689" align="aligncenter" width="300"] @TCA/Sadokat Jalolova[/caption] Zakirov explained that crypto is treated as a form of property under Uzbek law. As such, transferring cryptocurrency is regarded as a transfer of property rights rather than a financial transaction with monetary obligations. Pavel Khristolubov, COO of Fintech and Web3 at Wallet in Telegram, also underscored the platform’s commitment to regulatory compliance. “It’s very important for us to operate within the framework of our license. This means we don't compete with local payment systems,” he said. Khristolubov added that Wallet users can choose between custodial services and non-custodial, on-chain options, offering varying degrees of freedom and security. Andrew Rogozov, CEO of The Open Platform (TOP), the technology company behind Wallet, described Uzbekistan as one of the world’s most dynamic digital markets. “By combining Telegram’s scale with regulatory clarity and high mobile adoption, we see Uzbekistan as a model for how emerging markets can leapfrog into convenient, technology-driven finance,” he said. Globally, Wallet in Telegram has over 150 million registered users. Its launch...