Uzbekistan : Green economy support program

Uzbekistan is one of the most vulnerable countries to climate change: 80% of its territory is considered grassland and desert areas and the country’s average temperature has increased twice as fast as the global average since the 1950’s. Without additional adaptation measures, climate change and resources overexploitation will decrease country’s economic potential (water scarcity and thus of hydroelectricity, soil impoverishment threatening agri-food sector etc.) and its tourism potential.

Aware of the need of a more sustainable growth Uzbek authorities want to make the transition to a greener economy main emphasis of their next development plan. Uzbek authorities have asked the support of AFD to prepare, finance and implement this new strategical framework

The transition to a greener economy is a long-term process. AFD’s program will be based on a 5 years period (2022-2026). During this period, AFD will be financing a series of three concessional loans, the sums of which will be made available to the Uzbek Treasury depending on the progress actively achieved.

A technical cooperation program will simultaneously support the Uzbek institutions in their formulation of strategical framework, its translation in public finances (environmental tax, sustainable governance of public companies, green budget) and its translation in sectorial policies and programs (renewable energies, water management, biodiversity).

The sub-program n°1 -first of the three loans- aims structural measures such as the adoption of the new strategical framework, the implementation of fiscal measures to encourage clean transport or integration of environmental criteria in public procurement. This funding will soon be complemented by European funds delegated to AFD.

At the end of the sub-program n°1 (2022-2023), Uzbek authorities are expected to have a renewed action plan backed by a coherent budgetary and fiscal strategy. This basis will allow them to carry on the transition to a more resource and carbon efficient model which is a sustainable source of employment and growth for the Uzbek population.