Uzbekistan Business & Economy - The Times Of Central Asia

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China Mining Energy Group to Partner in Uzbek Copper Project

China Mining Energy Group will be participating in a project to mine and process copper ore in the Chust district of Uzbekistan's Namangan region. The new partner is expected to increase the mine's budget by 121 billion sum ($9.5 million), and create 420 jobs. Geological exploration is scheduled to begin in April. The project is expected to cost $200 million and have an annual capacity of 30,000 tons of copper. For comparison, the largest producer of copper in Uzbekistan, the Almalyk Mining and Metallurgical Combine, produced 148,000 tons of copper in 2023. China Mining Energy Group was established in 2003 and employs 40,000 people. It has $32 billion in assets. The company mines aluminum, copper, and gold in 17 countries.

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Kyrgyzstan Takes Issue With Uzbekistan’s Hydropower Plans

Uzbekistan's grandiose hydropower development plans are irking neighboring Kyrgyzstan, which is experiencing a shortage of water resources. These shortages have in part been caused by Kyrgyzstan swapping its water with Uzbekistan and Kazakhstan in exchange for electricity. Uzbekistan's construction of six hydroelectric power plants (HPPs), with a total capacity of 228 megawatts, has begun on the Naryn River in the Namangan region. The Uzbekhydroenergo project is estimated at $434 million and will generate up to 1 billion kilowatt-hours of electricity per year, enough to provide energy for 430,000 households. This will allow the country to save up to 310 million cubic meters of gas annually, to help alleviate shortages which has seen Uzbekistan turn to Russia. The launch of the hydro project will provide the Namangan region with 7.8 billion kWh per year, which far exceeds local demand. This surplus energy will be transferred to neighboring regions in the Fergana Valley, and will guarantee energy supply during periods of peak consumption. These plans contrast greatly with Kyrgyzstan's situation, as the republic imports 3 billion kWh of electricity from neighboring states during the fall and winter seasons. Uzbekistan and Kazakhstan supply Kyrgyzstan with electricity in winter, and in return Kyrgyzstan provides them with water in summer, measuring the volume of water using a generator, and thus paying back the debt for the electricity. According to official data, the Toktogul Reservoir in Kyrgyzstan is designed to hold 19.2-19.6 billion cubic meters of water. Kyrgyz Deputy Energy Minister, Talaibek Baigaziyev noted at a March 4 press conference in Bishkek that with electricity consumption on the increase and water levels falling, people urgently needed to curtail their usage. Water levels had already stopped at 7.7 billion cubic meters, versus a normal level of 17.3 billion cubic meters, leading to a risk of possible blackouts. If the level reaches anything below 6.5 billion cubic meters, the Toktogul HPP will stop. In 2024, the Kyrgyz authorities plan to launch 11 HPPs, five large and six small. According to the Eurasian Development Bank, Kyrgyzstan's energy sector will be operating under a state of emergency from now until the end of 2026. Kazakhstani experts have also expressed concern about their neighbors' energy development plans. They say water shortages could worsen in the region, with water already scarce in Kazakhstan. Bulat Yesekin, an expert on environmental policy and institutional frameworks for environmental protection, notes that "large hydropower plants further aggravate the problem of water supply and disrupt environmental sustainability. All over the world today there are campaigns to demolish hydroelectric dams and restore the natural regime of rivers. Only the preservation of natural river regimes can reduce water scarcity and create a more reliable basis for water supply for agriculture and industry." The construction of HPPs in border areas continues to create transnational problems. Altering river courses can destroy or alter ecosystems, change biodiversity, affect fisheries and agriculture, erode coastlines, and increase the risk of flooding in certain areas; yet access to electricity is a key issue across Central...

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Uzum Deal Makes It Uzbekistan’s First Tech ‘Unicorn’

A digital ecosystem called Uzum has become Uzbekistan's first tech 'unicorn' -- a pre-IPO company with a valuation of over $1 billion -- by attracting investment of more than $100 million this month. The bulk of this capital was put up by a Californian company, FinSight Ventures. Uzum, founded by Jasur Jumaev, the co-founder of KupiKupon, and Boris Dobrodeyev, the former CEO of the Russian social network VKontakte, provides e-commerce services and banking projects for individuals and small and medium-sized businesses through a superapp. The investors will hold stakes of less than 5% apiece, while Uzum's overall valuation has reached over $1.1 billion. Under the structure of the deal, the equity capital investment amounted to more than $50 million, and another $50 million was raised earlier in the form of loans. Prior to that, the founders had planned to raise $300 million. "We still plan to raise about $300 million during this year, but we have divided the round into two parts. This is the first one. The second part is already with the participation of funds from the Middle East, the UK and the U.S.," Jumaev said. The company has aggressive plans: to launch Uzbekistan's largest logistics complex for e-commerce, which will increase its turnover by 2.5 times and expand the area of warehouses to 500,000 square meters, and an increase in the number of order delivery points. By the end of 2023, Uzum had 10 million monthly users, and its e-commerce revenue exceeded $150 million. The next step for the first Uzbek tech unicorn will be an IPO, which is scheduled for 2026. According to Jumaev, the company is "considering all possibilities for optimal capital raising. One of the scenarios is to enter the Tashkent Stock Exchange and/or the Abu Dhabi Stock Exchange with parallel placements on Western markets." FinSight Ventures believes that Uzum is a national leader in key business verticals such as fintech and e-commerce, which in the future will allow it to follow the example of Kaspi.kz, from neighboring Kazakhstan, and become the standalone leader of Uzbekistan's tech market. According to the international auditing company KPMG, Uzbekistan is showing very strong economic growth: the country's GDP growth for 2023 was 6%, and by 2030, under the strategy "Uzbekistan-2030," overall GDP may reach $160 billion. Uzbekistan's e-commerce is the fastest growing in Central Asia, forecasted to reach $1.8-$2.2 billion by 2027. That potential is attracting major online retail players to the country: the Russian company Wildberries has been operating in Uzbekistan since 2022, and Ozon, also of Russia, entered Uzbekistan in November 2023. In this context, burgeoning national champion Uzum has a solid chance at becoming the largest retailer in the country as early as next year.

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Production Decrease and Import Increase in Energy Resources in Uzbekistan

According to the Statistics Agency of Uzbekistan, in January-February 2024, imports of natural gas increased 95-fold at a cost of $166.7 million. In the same period, Uzbekistan also increased its imports of oil by 5.3% costing $302.9 million and coal by 43.6% costing $42 million. Imports of electricity doubled, costing $36.4 million. In the first two months of 2024, natural gas production in Uzbekistan amounted to 7.7 billion cubic meters; a decrease of 454 million cubic meters compared to early 2023. Oil production decreased by 8.8 thousand tons to 118.5 thousand tons, and coal production decreased by 23 thousand tons to 659 thousand tons.

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Canada Joins List of Developed Countries Seeking Uzbek Migrant Labor

Following a meeting in February between Uzbek Minister of Employment and Labor Relations Bekhzod Musayev and Canadian Ambassador to Uzbekistan Alan Hamson, the Agency for External Labour Migration has reported that North American construction companies are to invite 5,000 citizens of Uzbekistan to work in Canada. The recruitment is part of the Canadian authorities' plan to attract 500,000 immigrants annually until the end of 2025. Through an unprecedented wave of newcomers, the government expects to compensate for Canada's acute labour shortage aggravated by the country's aging population. The country is currently seeking carpenters, welders, electricians, plumbers, concrete workers, glaziers, roofers and flooring assistants, and depending on qualifications, will offer wages of $12.50 to $30 per hour. Applicants must be aged between 18-45, should be proficient in English, French or Spanish, and have a local credential, certificate or diploma of vocational training in a professional trade. Uzbekistan has been actively developing legal labour-migration pathways to developed countries and for several consecutive years, Germany has hired Uzbek workers in 330 sectors under the Ausbildung (work and study) program. In 2022, some 2,000 Uzbek seasonal labour workers were hired in the United Kingdom; a number topped only by those from Ukraine. Against the backdrop of the escalating Arab-Israeli conflict and the departure of Palestinian workers en masse, Israel has now decided to hire Uzbek workers for construction projects. Japan has also been actively recruiting Uzbek labour migrants in construction, as well as in medical services. Qualified Uzbek specialists with an appropriate level of Japanese language can earn $1,000-1,500 per month in Japan. According to statistics, in 2023, 38,400 Uzbek labour migrants were officially employed in jobs outside Uzbekistan and to date, the Agency for External Labour Migration has trained over 58,00 citizens in foreign languages and professions to prepare for work abroad. The remittances of labour migrants to their home country account for 17.8 percent of Uzbekistan's GDP.

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EU Supports Renovation of Agricultural College in Bukhara

The Gijduvon Technical College of Agro Technologies recently opened its newly renovated facilities in Bukhara at an event attended by representatives of UNESCO, local government officials, the college's staff and students, and members of Gijduvon’s community. Integral to the 'Skills Development for Employability in Rural Areas of Uzbekistan' project, the renovations were funded by the European Union. Since its inception, Gijduvon College has been committed to providing vocational education for rural youth. Supported by the European Union, UNESCO’s extensive renovations have modernized workshops, classrooms, and laboratories through the installation of new flooring, ceilings, and enhanced lighting. In addition to revitalizing learning spaces, the project has also provided essential tools and resources, including tractors, greenhouses, refrigeration units, and contemporary furniture. By contributing to the College’s success in equipping students with the skills necessary for work in agriculture and irrigation, the improved facilities will help further sustainable development and enhanced living standards in rural Uzbekistan.