The Operation’s objective is to advance Uzbekistan's transition to an inclusive and resilient market economy by supporting reforms to help create markets, improve fiscal risk management and public procurement, and support social inclusion and green resilience.
The Operation is proposed to be supported under the COVID-19 Crisis Recovery Facility (the Facility) of the Bank and co-financed with the World Bank (WB) under the WB’s Policy on Development Policy Financing (DPF).
The Operation supports the Government of Uzbekistan (GoU) in the transition to an inclusive and resilient market economy. The reforms supported by this Operation are organized under the following three pillars: (i) creating markets, (ii) improving fiscal risk management, and (iii) supporting social inclusion and green resilience. A suite of sectoral reforms in energy, agriculture, rail, and chemical sectors will be implemented to establish arms-length regulation and the basis for private sector entry while maintaining fiscal prudence. Reforms, particularly in infrastructure sectors, are essential in supporting the delivery of health care and public services and in stimulating economic recovery in the post-COVID-19 period. The consolidation of Uzbekistan's growing social protection system under one umbrella will improve the effectiveness of the social assistance programs. Furthermore, the Operation will support Uzbekistan's actions to tackle climate risks and facilitate the transition to a green economy.
This Loan will be co-financed with the WB as lead co-financier, and its environmental and social (ES) risks and impacts have been assessed in accordance with the WB’s Development Policy Financing (DPF) Policy. AIIB’s Environmental and Social Policy (ESP) was designed to apply to investment projects and has no provisions for its application to DPF operations. Therefore, as permitted by the decision of AIIB’s Board of Directors set forth in the Decisions to Support the COVID-19 Crisis Recovery Facility (CRF), the WB’s DPF Policy will apply to this operation in lieu of AIIB’s ESP. This will ensure a harmonized approach to addressing the ES risks and impacts of the Operation. The Ministry of Economy and Finance (MoEF) is responsible for implementing the program supported by the proposed Operation. As the main implementing agency, the MoEF will coordinate with other government agencies involved in the implementation of the operation.
In accordance with the DPF Policy, the WB assessed the measures under the operation. Most of the prior actions in all three pillars under this Operation benefit the environmental and social sectors without having any major adverse impact expected to be caused by these interventions. The first pillar of this Operation is creating markets in key sectors that will generate positive environmental outcomes on the environment, forests, or other natural resources. The second pillar will mainly improve the fiscal management and procurement system of Uzbekistan, and the third pillar, which is supporting social inclusion and green resilience, will have direct positive environmental and social benefits by strengthening the implementation and monitoring of programs under the National Strategy of Social Protection and ensuring transparency through the digitization of records, which particularly will benefit poor and vulnerable people who are at the edge of economic shocks.
Asian Infrastructure Investment Bank
Emil Zalinyan
Infrastructure Sector Economist
World Bank
Pinar Yasar
Senior Economist
Home What We Do Project List Uzbekistan: First Inclusive and Resilient Market Economy Development Policy Operation
