As the Head of the European Bank for Reconstruction and Development (EBRD) in Uzbekistan, Andi Aranitasi plays a key role in driving the country’s economic transformation. Under his leadership, the EBRD has expanded its investments in key sectors such as energy, infrastructure, and private enterprise, supporting Uzbekistan’s shift toward a more open and sustainable economy. With a focus on green energy, digitalization, and financial reforms, Aranitasi’s efforts contribute to the nation’s long-term development and integration into global markets.

In 2024, the EBRD set an investment record in Uzbekistan by signing off on 34 projects worth €938 million (US $960 million). The country once again became the leading recipient of the Bank’s funding in Central Asia, with 55% of the Bank’s investments going towards green economy projects.

The EBRD has supported Central Asia’s first renewable hydrogen facility by providing a $65 million financing package to a joint venture of ACWA Power and Uzkimyosanoat, which will help to decarbonize the fertilizer production sector in Uzbekistan. The Bank also organized an A/B loan of US$ 226 million for developing, designing, constructing, and operating a 200MW solar photovoltaic power plant and a 501MWh battery energy storage system (BESS) in the Tashkent region. This is one of the most significant EBRD-supported BESS projects in the economies where the Bank operates. Its sovereign loan of $66.4 million to the National Electric Grid of Uzbekistan (NEGU) will support the construction of a 230 km 500 kV transmission line in the Navoi region. This project will help to eliminate bottlenecks in the grid, reduce electricity outages, and facilitate the integration of renewables. The EBRD’s sovereign loan of $238 million, meanwhile, will help rehabilitate a key road and build a bridge across the Amu Darya River in the Khorezm region, thus contributing to sustainable transport connections.

The country’s financial sector attracted over €300 million from the EBRD through trade finance limits and loans to local financial institutions. It offered credit lines and risk-sharing agreements to such domestic lenders as Hamkorbank, Ipoteka Bank, TBC Bank Uzbekistan, and Uzbek Leasing International. Special attention was paid to the development and support of SMEs, including those needing energy efficiency improvements and owned and managed by youth and women.

The EBRD also increased its equity investment in TBC Uzbekistan, the country’s first digital bank. Additionally, the EBRD and the government of Uzbekistan agreed to work jointly on the successful privatization of one of the country’s largest state-owned lenders, Asakabank. In 2024, the EBRD’s Advice for Small Business program in Uzbekistan launched 60 projects, increasing its outreach to domestic SMEs. Half of these were with women entrepreneurs, and over 40% were in rural areas. More than 80,000 entrepreneurs nationwide were reached through specialized training, networking, online outreach, and knowledge-sharing events. Throughout 2024, the EBRD was actively engaged in policy dialogue with the national authorities, which facilitated the approval of several key legal acts, such as laws on privatization, the electricity market, and subsoil use.

TCA spoke with Andi Aranitasi.

TCA: The EBRD has been involved in Uzbekistan for a long time. How would you describe the evolution of the bank’s projects here, especially since the country’s economic reforms began in 2016?

Since re-engaging with Uzbekistan in 2017, our relationship has been going from strength to strength. Our pipeline of projects in Uzbekistan allows us to forecast that, gradually, we will be able to invest in the area of €1 billion every year. We finance projects in sectors ranging from renewable energy to sustainable infrastructure and from support to SMEs to residential energy efficiency.  

TCA: Uzbekistan is one of the EBRD’s most significant countries of operations in terms of investment volume. What factors contributed to this growth?

We would like to commend the authorities, who have been making conscious efforts to improve the investment climate in Uzbekistan. Several key pieces of legislation, prepared with the EBRD’s support, have either been approved or are under preparation. The EBRD is a co-chair of Uzbekistan’s Foreign Investors Council (FIC). The FIC serves as an essential platform for dialogue between foreign investors and the authorities of Uzbekistan. We attach high importance to improving the country’s business environment, which President Mirziyoyev made a strategic national priority. For example, the constantly growing number of foreign investors attending the Tashkent Investment Forum speaks for itself and shows the country is moving in the right direction.

Sectoral Investment

TCA: Agriculture remains a vital part of Uzbekistan’s economy. Can you share details about recent EBRD projects aimed at modernizing this sector? Uzbekistan is one of the world’s largest cotton producers but has faced criticism over its water-intensive practices. How is the EBRD promoting sustainable water use in agriculture and industry?

Uzbekistan is badly affected by climate change. The EBRD is helping the country address pressing environmental issues, such as water stress, soil erosion and degradation, heat stress, and hydrological variability. We have already supported a significant water supply project in the Ferghana Valley and are exploring similar projects nationwide, including interventions in upgrading and improving the irrigation network. The EBRD has also provided climate resilience finance (through FINTECC) to domestic agribusiness companies such as Milk Euro Food and Tillo Domor (both in the dairy sector). Our Bank has supported Uzkimyosanoat, Uzbekistan’s state-owned chemical holding company (the leading domestic producer of fertilizers) to develop a low-carbon strategy and roadmap for the chemicals and fertilizer industry. 

TCA: Uzbekistan’s government has emphasized tourism as a driver of economic growth. How is the EBRD contributing to this goal, particularly in preserving and promoting historical sites like Samarkand or Bukhara?

We are not financing the restoration works but creating the necessary infrastructure for the growing tourism sector. This includes lending and expert advice for grassroots businesses such as food, catering, and service companies. The EBRD is actively working with relevant authorities to improve transport connections across the country.

TCA: What specific initiatives is the EBRD supporting in Uzbekistan to expand solar, wind, or hydropower capacity? How do these projects differ from those of other Central Asian countries?

The Central Asian region is characterized by high carbon intensity and low penetration of renewables. In this respect, all the regional economies face similar transformation problems on the way to their Paris alignment.  

The EBRD and the government of Uzbekistan have developed a long-term decarbonization strategy, which will support the country’s plan to achieve carbon neutrality in the power sector by 2050. These consolidated efforts will eventually end Uzbekistan’s reliance on fossil fuels and significantly improve the environmental situation across the country. Our Bank is also helping the government develop a national methane emissions program. 

We continue facilitating the rollout of renewables in Uzbekistan. The EBRD also supports competitive wind tenders, including the first-ever 200MW capacity with storage in Karakalpakstan. We’ll continue doing this as they help achieve the best price and attract the best investors. We want to support more renewable projects in the coming years to help Uzbekistan towards its 25GW 2030 target. The EBRD and the World Bank have agreed to work together to develop a Long-Term Low Carbon Development Strategy (LTS) for Uzbekistan.

Investment and Impact

TCA: Many SMEs in Uzbekistan need help accessing financing. What targeted programs or partnerships has the EBRD introduced to address this issue?

SMEs in Uzbekistan contribute almost 50% of GDP and employ nearly 80% of the workforce. It’s hardly surprising that President Mirziyoyev named support of SMEs as one of the top national priorities. As I identified in the new country strategy, the EBRD has also made this sector one of its main operational priorities. We provide credit lines and risk-sharing facilities to small and medium-sized enterprises through our partner banks. These include specialized facilities to support women- and youth-led enterprises, allowing them to take green and climate-resilient technologies on board. They have already helped stimulate the business activity of SMEs, improve their performance, and create new jobs. Banks and SMEs benefit from the EBRD’s Business Advisory Services (ASB) program.

In 2023, the EBRD launched a seven-year Youth in Business program for €200 million (US$ 218 million) in Central Asia. It is designed to provide better access to finance and relevant training to young entrepreneurs in the region, where up to one-third of the population is aged between 18 and 34.  The EBRD’s funds are complemented by a package of up to €30 million consisting of grants and concessional co-financing to stimulate inclusive lending and youth entrepreneurship.

Jointly with its long-term client, ACWA Power, the EBRD has developed a program on green skills for solar and wind technologies for the youth in Uzbekistan. It is implemented in Uzbekistan’s Shirin Energy College. 

Support for women entrepreneurs is crucial for Uzbekistan, aiming to increase the percentage of small and medium-sized businesses owned and run by women from 25% to 40%, which aligns with the country’s 2030 strategy for gender equality. The EBRD is rolling out its EBRD’s Central Asian Women in Business program, which became active in Uzbekistan in 2020. Supported by grant funding from the Women Entrepreneurs Finance Initiative, it is designed to help promote women’s entrepreneurship and business activity by assisting with access to finance, know-how, and technical advice.

TCA: Uzbekistan is pursuing privatization of state-owned enterprises. How is the EBRD involved in this process, and what challenges have you encountered?

Uzbekistan has approved the Law on privatization (we see this as a very positive development), and we have already seen the first major successful privatization in the banking sector (Ipoteka Bank by OTP Group). In the spring of 2024, the EBRD and the government of Uzbekistan agreed to work jointly on the successful privatization of one of the country’s largest state-owned lenders, Asakabank. The EBRD will provide necessary pre-privatization support through recommendations, knowledge-sharing, and technical assistance, and may consider a pre-privatization equity investment. As indicated in the accord, the parties will work on institutional transformation and corporate governance reform at Asakabank in preparation for its privatization. The EBRD stands ready to provide its experience and financial support to other pre-privatization and privatization undertakings. 

TCA: What are the EBRD’s top three priorities in Uzbekistan over the next five years, and what new sectors might you explore?

Our activity in Central Asia’s most populous state is outlined in the country strategy developed jointly with the authorities.  These are the Bank’s priorities in the country until 2029:

• Support of decarbonization, greater water efficiency, and cleaner energy 
• Development of the private sector and fostering employment, skills, inclusion, and the digital transition  
• Improvement of economic governance, the business climate, and infrastructure connectivity

The Bank will also focus on implementing already signed projects, mainly in the public sector.

TCA: Infrastructure is critical for Uzbekistan’s growth, particularly in remote areas. Can you provide examples of how the EBRD improves connectivity for rural communities? 

I wouldn’t separate infrastructure issues in the rural areas from the national/regional ones. They are very much interlinked, and by improving larger transportation arteries, we can stimulate upgrades of smaller infrastructure linked to them. 

Regional trade within Central Asia and beyond will greatly benefit from the upgrade and expansion of the Transcaspian transport corridor. Uzbekistan is an integral part of this intra-regional connectivity initiative. The country should upgrade its connector roads and railways, modernize border crossings, and eliminate unnecessary barriers to trade and transportation within the region. 

In early 2024, our Bank stated its readiness to invest around €1.5 billion in the Trans-Caspian Corridor-related infrastructure and associated transport solutions over the next 2-3 years. We are exploring several public-private partnership (PPP) initiatives and sustainable infrastructure projects in Uzbekistan, contributing to the fluidity of cargo traffic across the country and along the route. 

It is worth mentioning that Uzbekistan and the EBRD have recently established the Uzbekistan Project Development Facility (UPDF) supported by the Bank’s sovereign loan of up to €10 million. It will help develop public-private partnership (PPP) projects in the country. The UPDF will contribute towards creating a US$30 billion pipeline of PPP projects identified as of Uzbekistan’s key priorities by 2030. 

TCA: With Uzbekistan increasingly opening up to foreign investors, how does the EBRD position itself as a trusted partner amidst growing competition from players like China and Russia?

I would refrain from comparing major international economies active in Central Asia with a bank. We operate in Uzbekistan according to our country’s strategy, and in the private sector, we are very market-demand-driven. 

We are among Uzbekistan’s most active investors, and we would like to see a stable and predictable business environment, greater openness of the country, and new good laws. As mineral demand for clean energy technologies is expected to rise by at least four times by 2040 to meet climate goals, Uzbekistan should attract investors to explore its subsoil. Developing local capital markets is also very important for global investors and financiers.