Uzbekistan Business & Economy - The Times Of Central Asia

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Real Estate

Uzbekistan Emerges as Key Market for China’s Real Estate Giants

Since 2021, China’s property sector has been navigating one of the most severe downturns in its history. A combination of mounting developer debt, strict government lending rules, and a large stock of unsold housing has pushed the country’s real estate giants into prolonged distress. As speculative construction slows at home, Chinese companies are increasingly turning outward. Similar to firms in renewable energy, waste-to-energy, and electric vehicle industries, real estate developers now see foreign markets as essential for restoring balance and sustaining growth. In this broader search for new opportunities, Uzbekistan has emerged as a highly compelling destination for Chinese investment. The country offers a rare mix of rapid demographic growth and urgent housing needs that few markets can match. Uzbekistan’s population is expanding at a fast pace, and more than 60,000 new households form every year. This demographic surge is placing enormous strain on the country’s already limited housing stock. Official data shows that around 85,000 families are waiting for housing, yet annual construction increases the existing stock by only one to two percent. The result is a persistent shortage that cannot be resolved without sustained and large-scale capital investment. If this deficit remains unaddressed, it risks creating long-term social frustration. Against this backdrop, the interests of Chinese real estate developers and Uzbekistan’s housing priorities are beginning to align. Chinese firms looking for stable and high-demand markets increasingly view Uzbekistan as an attractive place to expand. Tashkent, in particular, has become a center of growing cooperation with Chinese partners. Several recent agreements illustrate this momentum. The Chinese firm TSC HK Investment is preparing a $340 million project for a residential complex and business center in the Chilanzar district of Tashkent. The city authorities have also signed agreements worth about $1 billion with CSCEC, including a major housing development valued at $440 million. Beyond the capital, another Chinese investor plans to allocate $250 million to build a modern complex covering 55 hectares in the city of Babur in the Andijan region. For Chinese companies, Uzbekistan offers a large and expanding market that helps absorb China’s massive overcapacity in construction services, heavy machinery, and industrial materials such as steel and cement. Investing in Uzbekistan not only eases domestic economic pressure but also allows Chinese firms to demonstrate their capabilities in shaping the daily lives of Uzbek families. Large residential projects provide opportunities to familiarize local communities with Chinese standards, technologies, and urban design practices. When these projects are executed successfully, they can contribute to a positive image of China and strengthen its soft power presence in the country. For Uzbekistan, China’s growing involvement brings several advantages. Chinese investment can help meet the country’s rapidly rising demand for housing and reduce the likelihood of long-term social frustration linked to shortages. Chinese developers often work with integrated models that go beyond simple residential blocks. They build high-density and multi-functional complexes combining housing, business centers, educational facilities, and public services. This approach aligns closely with Uzbekistan’s strategy to encourage sustainable urbanization, improve living conditions, and...

Ethanol Refinery

Uzbekistan to Build Central Asia’s Largest Ethanol Refinery

Allied Biofuels FE LLC and India’s Praj Industries Ltd have signed a Memorandum of Understanding (MOU) to construct what is set to become Central Asia’s largest ethanol refinery in Uzbekistan’s Khorezm region, the companies announced on November 17. Praj will provide first-generation ethanol technology, proprietary equipment, and full-spectrum support, including design, engineering, procurement, and commissioning. The planned facility will produce 890 tonnes of 95% ethanol per day, or approximately 293,700 tonnes annually, using sorghum as the primary feedstock. The plant will also capture biogenic CO₂ generated during the production process. Allied Biofuels intends to convert this ethanol into 160,400 tonnes of Sustainable Aviation Fuel (SAF) and 5,040 tonnes of green diesel each year. Biogenic CO₂ will also be combined with synthesis gas and green hydrogen, produced from 2,000 MW of PEM electrolysers, to generate 257,000 tonnes of Electro-Sustainable Aviation Fuel (e-SAF) annually. The project represents the first phase in establishing Central Asia’s first integrated refinery for SAF, e-SAF, and green diesel. According to the companies, the initiative supports Uzbekistan’s climate objectives and aligns with the goals of the national Net Zero Emissions Office. “This MOU is a landmark moment for Uzbekistan and for Central Asia’s clean-energy future,” said Alfred Benedict, Chairman and Managing Director of Allied Biofuels. “This project will strengthen energy security, reduce emissions, and create long-term economic opportunities for the region.” Praj Industries Chairman Dr. Pramod Chaudhari added, “With our proven expertise and advanced technologies, Praj will help develop the ethanol facility and support Uzbekistan in advancing its sustainability targets.” The investment is expected to generate hundreds of skilled jobs and position Uzbekistan as a regional leader in advanced biofuels. The Times of Central Asia has previously reported on Uzbekistan’s increased emphasis on renewable energy and efforts to attract international clean-technology partnerships.

Regional Cooperation

Made In Central Asia: Leaders Eye $20 Billion Trade Milestone as Regional Cooperation Deepens

The first meeting of trade and investment ministers from Central Asian countries, joined by Azerbaijan, has taken place in Tashkent, where participants agreed to nearly double mutual trade to $20 billion and discussed launching a regional brand, Made in Central Asia. Opening the session, Uzbekistan’s Minister of Investment, Industry, and Trade, Laziz Kudratov, highlighted the substantial potential for increased trade due to the complementarity of regional economies and growing business interest in joint initiatives According to Uzbek data, intra-regional trade doubled between 2017 and 2024, reaching approximately $11 billion. Kudratov proposed developing an action plan to raise trade turnover to $20 billion. The proposed strategy includes harmonizing customs procedures, implementing digital document management, mutually recognizing permits, and developing “single window” systems at borders. Additional measures under discussion include creating a regional electronic catalog of goods and producers and integrating the digital platforms of chambers of commerce, industry, and export agencies. Uzbekistan also proposed hosting the Central Asia and Azerbaijan Investment Forum in Samarkand in 2026, positioning it as a platform to launch the Made in Central Asia brand. Kazakhstan’s Minister of Trade and Integration, Arman Shakkaliev, urged countries to shift from a “buy-sell” model to an “invest-produce-sell” approach. He noted that Kazakhstan is entering a new investment cycle aimed at building export-oriented industries and sustainable value chains. Shakkaliev added that the upcoming industrial cooperation development program with Uzbekistan could be expanded to other Central Asian countries and Azerbaijan. Kazakhstan also supported the common branding initiative and proposed a pilot project using digital trading platforms. Tajikistan’s Minister of Economic Development and Trade, Zavki Zavkizoda, underscored the importance of digital technologies and cited examples of regional companies operating at an international level. Nazar Agakhanov, Turkmenistan’s Minister of Trade and Foreign Economic Relations, stressed that simplifying trade procedures and developing electronic platforms are essential to meeting shared goals. Ashgabat expressed its readiness to join the working group to be established following the meeting. Kyrgyzstan was represented by its ambassador to Uzbekistan, Duishonkul Chotonov, who noted that Bishkek views the format as a platform for collective decisions that advance regional economic development. Azerbaijan’s First Deputy Minister of Economy, Elnur Aliyev, reported that trade with Central Asian states grew by 58% in the first nine months of 2025, surpassing $1 billion. He said Azerbaijan is prepared to expand its transport infrastructure through new logistics hubs and the promotion of joint ventures. The meeting concluded with the signing of a joint communiqué expressing intentions to deepen economic ties, establish joint ventures, and develop new instruments for investment cooperation. The seventh Consultative Meeting of the Heads of State of Central Asia will be held in Tashkent on November 15-16. Azerbaijani President Ilham Aliyev is also expected to attend.

Energy

Uzbekistan and SOCAR Advance $2 Billion Ustyurt Energy Project

Uzbekistan’s Minister of Energy, Jorabek Mirzamahmudov, has outlined the country’s deepening energy cooperation with Azerbaijan’s state oil company SOCAR, highlighting progress on a recently signed Production Sharing Agreement (PSA) for the Ustyurt region and broader plans in petrochemicals and electricity trade. In an interview with Azerbaijani media outlet Report, Mirzamahmudov confirmed that Uzbekistan, SOCAR, and Uzbekneftegaz have already established a joint operating company to oversee the Ustyurt project. Fieldwork is expected to accelerate soon, with seismic surveys covering over 3,000 linear kilometers set to begin before year-end, followed by the drilling of the first exploration well. The PSA structure splits ownership equally between the state and investors, with SOCAR and Uzbekneftegaz as the primary partners. British energy major BP has shown interest and is in preliminary discussions to join the consortium. Azerbaijani President Ilham Aliyev stated in August that SOCAR had commenced work at an Uzbek oil field following the contract signing. He expressed optimism about potential discoveries within the next one to two years. Mirzamahmudov acknowledged that earlier data on Ustyurt had not suggested large hydrocarbon reserves but said that modern interpretation techniques have revealed greater potential. While refraining from early reserve estimates, he said SOCAR specialists are optimistic about promising oil indicators. If confirmed, Uzbekistan plans to build a new refinery. Total investment in the Ustyurt project is projected at around $2 billion. The minister said SOCAR and Uzbekneftegaz would finance the project’s initial stages, with BP possibly joining later. He did not rule out future collaboration with Azerbaijan on major fields like Shah Deniz or Absheron but emphasized that Uzbekistan’s current priority is increasing domestic production. In the long term, joint ventures in third countries are also being considered. Trans-Caspian Energy and Renewables Push Mirzamahmudov also discussed the proposed trans-Caspian high-voltage direct current (HVDC) cable project aimed at exporting renewable energy to Europe. A joint venture involving Azerbaijan, Kazakhstan, and Uzbekistan has already been formed. The Asian Development Bank is assisting in selecting a consultant for the project’s feasibility study. Several countries, including Saudi Arabia, have expressed interest. Uzbekistan currently generates more than 20% of its electricity from renewables and aims to increase that share to 54% by 2030. In the Ustyurt region alone, wind projects totaling over 2.5 GW are under development, with the first 100 MW already operational. The government also plans to deploy hybrid wind-solar-storage systems with a minimum capacity of 5 GW. Localization and Petrochemical Cooperation Mirzamahmudov noted that future oil and gas processing facilities could be localized in special economic zones in Bukhara, Karakalpakstan, and Khorezm, which are currently being evaluated for infrastructure and logistics readiness. A joint venture with SOCAR Trading is already exporting polymer products, and ongoing discussions aim to expand cooperation in fuel production and fertilizer manufacturing.

Finance

ADB Approves $300 Million Loan to Support Small Business Growth in Uzbekistan

The Asian Development Bank (ADB) has approved a $300 million policy-based loan to boost the development of micro, small, and medium-sized enterprises (MSMEs) in Uzbekistan, with a particular focus on women-led businesses. The bank announced the decision on November 12. Of the total funding, $100 million will be provided on concessional terms to expand access to finance for MSMEs and strengthen Uzbekistan’s microfinance sector. The loan forms part of the second phase of the ADB’s Inclusive Finance Sector Development Program, which builds on earlier efforts to improve the legal and institutional framework for inclusive finance in the country. Key reforms have included raising the ceiling on microloans, modernizing microfinance regulations, joining the Women Entrepreneurs Finance Code, and introducing frameworks for Islamic microfinance. “ADB is proud to support Uzbekistan’s transition to a more inclusive and market-based financial system,” said ADB Country Director for Uzbekistan Kanokpan Lao-Araya. “This program will help unlock access to finance for the self-employed and microentrepreneurs, promote gender equality, and strengthen consumer protection in the financial sector.” The latest phase of the program introduces new policy measures aimed at enhancing responsible lending, regulating emerging products such as “buy now, pay later” services, and strengthening digital financial supervision. It also advances gender equality by supporting sectoral policies that implement gender-based financing quotas and improve the reporting of sex-disaggregated data. An evaluation of Uzbekistan’s National Financial Inclusion Strategy (2021-2023) revealed that 60 percent of adults now hold accounts with formal financial institutions, a significant gain attributed to rapid digitalization. The new program aims to further modernize the microfinance sector by allowing the creation of deposit-taking microfinance banks, two of which have already received preliminary licenses. This year marks the 30th anniversary of ADB-Uzbekistan cooperation. Since 1995, the bank has committed $14.6 billion in loans, grants, and technical assistance to the country. Uzbekistan has also been selected to chair the ADB Board of Governors for 2025-2026. Samarkand is set to host the ADB’s 59th Annual Meeting in May 2026.

Pharmaceuticals

Uzbekistan’s Pharmaceutical Market in 2025: Rapid Growth, Foreign Investment, and Localization

Uzbekistan’s pharmaceutical sector is experiencing explosive growth in 2025. According to the analytics firm IQVIA, in September 2025, the market volume reached $204.9 million (wholesale) with 83.1 million packages of medicines sold. This is 36.4% higher in value terms and 24.1% higher in volume than a year earlier, indicating a recovery in consumer demand and a robust post-pandemic market rebound. The total annual market volume (MAT, the twelve months to September 2025) is estimated at $2.14 billion, whereas in 2018 it was about $0.888 billion. Thus, the average annual growth rate over 2018–2025 exceeded 13.4%, with acceleration in 2024–2025. As a result, the country’s pharma market has entered a phase of accelerated development, laying the foundation for further expansion in 2026. Market Structure: Price Segments, Import Dependence, and Prescription Shift to premium segments. The structure of pharmaceutical consumption in Uzbekistan is shifting towards more expensive medications. The share of the cheapest drugs (priced up to $1 per package) is shrinking, whereas the $1–5 and $5–10 segments are growing. At the same time, the niche of drugs priced above $10 is strengthening, reflecting a shift of part of consumer demand toward branded original medicines and complex therapies. This trend indicates qualitative market development: whereas previously inexpensive generics dominated, now an increasing share of revenue comes from innovative and imported products. Imports and local production. Despite localization efforts, the market remains import-dependent – around 90% of sales by value are generated by foreign drugs, with a slight trend toward imports further expanding their share. As of MAT/09/2025, imported medicines have raised their value share from 87% in 2018 to 89%. Nonetheless, in volume terms, the share of local manufacturers has inched up from 40% to 41.2% thanks to the production of affordable generics. Local companies are increasing their presence in the low-price segment by competing on cost. The government is encouraging localization of production, offering incentives (for example, tax and customs benefits in pharmaceutical free economic zones) and reserving 20% of state procurements for domestic companies’ products. These measures have already led a number of foreign companies to begin setting up manufacturing in Uzbekistan. Market Leaders: Companies and Brands Uzbekistan’s pharmaceutical market is highly fragmented – the combined share of even the largest players is relatively small. According to IQVIA for MAT/09/2025, the top three companies by sales value are Slovenia’s KRKA, Turkey’s World Medicine, and Ukraine’s Farmak. These companies together control about 9.9% of the market, which indicates intense competition and a market crowded with numerous brands and manufacturers. Notably, the top ten manufacturers have collectively increased their share since 2018 from 24% to 27%. Among local manufacturers, the Uzbek company Nika Pharm stands out with roughly a 2.5% share, rising from 32nd position in 2018 to 7th in 2025 with a +40.4% increase in sales (in value terms). Nika Pharm has become the most dynamic player in the domestic market and the only local manufacturer in the top ten. Competition at the individual brand level is also intense, with the...