Uzbekistan: Horticulture Value Chain Development Project

Sovereign Project | 47305-002

The Asian Development Bank is working with Uzbekistan to enhance horticulture value chain development. The project is increasing access to long-term financing for horticulture farmers and enterprises along the horticulture value chain.

Project Details

  • Project Officer
    Nasirov, Tal'at Ubaydullaevich
    Central and West Asia Department
    Request for information
  • Country
    Uzbekistan
  • Modality
    • Loan
  • Sector
    • Finance
Project Name Horticulture Value Chain Development Project
Project Number 47305-002
Country Uzbekistan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3471-UZB: Horticulture Value Chain Development Project (Formerly: Innovations for Agriculture Modernization Project)
Asian Development Fund US$ 154.00 million
Loan 3673-UZB: Horticulture Value Chain Development Project (Additional Financing)
Concessional ordinary capital resources lending US$ 198.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agro-industry, marketing, and trade - Land-based natural resources management

Finance / Small and medium enterprise finance and leasing

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will provide a loan to the Republic of Uzbekistan to channel through qualified participating financial institutions (PFI's) who will on-lend to horticulture-related farmers and businesses for fixed asset investments such as intensive orchards, cold storages, processing and packaging equipment. The project will address the critical constraint lack of long term resources in the Uzbekistan banking system. Since horticulture sector has high value produces, the project will contribute significantly to creating sustainable enterprises, increasing employment, and improving household income. Key lessons learnt from previous and ongoing projects financed by ADB and development partners are taken into account in the project design: (i) there needs be a dedicated project management office, other than the Ministry of Finance, to monitor the PFIs' lending activities and safeguards compliance; and (ii) terms and conditions of PFIs' subloans must be business- and demand-based without any government interventions.
Project Rationale and Linkage to Country/Regional Strategy

Agricultural gross domestic product (GDP) grew at an annual average rate of 9.8% over the period 2010 2013. In spite of its decline during the past 10 years as a reflection of the strong growth in other sectors, agriculture still plays an important role in employment creation and as major source of cash income and wellbeing. During the period 2005 2015, the horticulture sector has witnessed dramatic change and increased importance to the economy. Production areas have increased significantly (vegetable by 41%, melons (and watermelons) by 53%; fruits and berries by 28%). The government aims to enhance the horticulture value chain to increase export of horticulture produces from 0.6 million tons in 2015 to 2.2 million by 2020. It is estimated that this effort will require a budget of approximately $500 million to finance farmers and enterprises to improve and/or set up intensive orchards, cold storages, processing and packaging equipment.


As part of the export promotion strategy, a farm size optimization program targeting horticulture sector announced in December 2015 has resulted in more registered farmers an increase of 57,969 farmers in the horticulture sector alone. Under this program, numbers of registered horticulture and grape producers increased by 196% while for farmers registered as producing fruits and vegetables, the change in numbers was increased by 86%. This program addresses inequities in rural employment and to bring more unemployed people into the workforce as registered farmers.


However, small farm sizes bear risks of inability to attract credit because of issues with levels of fluctuating profitability, available cash flow, lack of suitable levels of security and collateral to access finance as well as inefficiencies of scale. Although bank credit outside the capital city represents about 65% of total credit, universal access to finance for private individuals and small businesses in rural areas is constrained by weak rural branch networks and limited mobile banking services. Also, most available bank loans carry a short tenor of up to one year, which do not match farm cash flows generated by the typical multiyear agricultural product cycles. Farmers and small businesses have limited business sophistication and skills, which impede their growth, with surveys indicating that they lack access to information on market opportunities, suppliers, competitors, technology, and banking products. Low financial literacy of small businesses and low-income households, many of which are led by women, limit their access to financial services and their ability to invest and grow.


Significant cost of funding, perceived risks, and administrative costs associated with lending require banks to charge interest rates that range from 11% 25% for local currency and 6% 15% for foreign currency loans. Especially individuals and small businesses borrow at higher rates. Traditional bank credit processes restrict the use of cash flow-based lending and emphasize recourse to collateral. Insufficient collateral limits the size of loans, thus restricting small businesses from borrowing.


The financial system is dominated by banks, which control 94% of finance sector assets. Eight state-owned banks control 75% of banking assets and provide the bulk of credit to state-owned entities. During 2011 2015, bank credit to small businesses substantially increased from 4.5% to 7.1% of GDP, reflecting a compound annual growth rate (CAGR) of 34.1%. However, lending to small businesses still represents less than one-third of overall bank credit, which is insufficient given their economic significance. Eighty percent of small businesses are still being funded by family and friends and informal resources. Access to finance remains a key constraint for private business growth.

Impact Contribution of horticulture sector to inclusive economic growth and rural employment improved (Presidential Decree UP-4707)
Project Outcome
Description of Outcome Production and marketing of horticultural products increased
Progress Toward Outcome Good progress. All targets are expected to be achieved by 2022.
Implementation Progress
Description of Project Outputs Finance to the horticulture sector increased
Status of Implementation Progress (Outputs, Activities, and Issues)

Loan 3471-UZB (original loan). The cumulative: (a) disbursement is $152.9 million, accounting for 99% of total loan proceeds; and (b) commitment (liquidation) is $152.4. Funds released to PFIs for sub loan financing is $151.4 million, of which $151.2 million has been disbursed by PFIs to sub borrowers. The remaining $0.2 million has also been committed to eligible subprojects. The average size of the sub-loan is $0.9 million. The project has supported 166 horticulture subprojects through sub loans. Of the subprojects financed to-date, 74 with a sub loan value of $88.1 million have been for production, and 92 with a sub loan value of $63.3 million have been for post-harvest storage and processing. The project has helped to establish 3,509 hectares (ha) of intensive orchards and 136.6 ha of water- and energy-saving greenhouses and increased refrigerated storage capacity by 69,400 tons, post-harvest processing capacity by 122,291 tons, packaging material manufacture of 13.5 million m2, and procurement of 179 units of agricultural machinery. Given the nature of subprojects financed, in both production and post-harvest activities, the project will have a positive effect on the production and marketing of horticultural produce. During the implementation of these subprojects, 3,558 new jobs have been created, of which 2,272 are for men and 1,286 for women (36%).

Loan 3673-UZB (additional financing). The cumulative: (a) disbursement is $187.8 million (95%); and (b) commitment (liquidation) is $138.5 (70%). Funds released to PFIs for sub loan financing is $187.8 million, of which $186.3 million has been disbursed by PFIs to sub borrowers. The project has supported 177 horticulture subprojects through sub loans. Of the subprojects financed to-date, 131 with a sub loan value of $141.9 million have been for greenhouses, 18 with a sub loan value of $22.2 million have been for processing, 18 with a sub loan value of $17.3 million have been for cold storage, 2 with a sub loan value of $2.7 million have been for packaging, 7 with a sub loan value of $1.5 million have been for intensive orchards and 1 with a sub loan value of $0.5 million have been for agricultural machinery. The project has provided financing to establish 399.1 hectares (ha) of water- and energy-saving greenhouses, increased refrigerated storage capacity by 35,100 tons, post-harvest processing capacity by 97,437 tons, packaging material manufacture of 7.5 million m2. During the implementation of these subprojects, 3,978 new jobs have been created, of which 2,502 are for men and 1,464 for women (36.8%).

Geographical Location Nation-wide
Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects The existing ESMS policy and procedures ensures project screening, categorization before subproject approval and monitoring/reporting for all environment category B subprojects. The screening procedures established under ESMS ensures that following subprojects are excluded from ADB financing (i) all subprojects included in the project Prohibited Investment Activities List (PIAL); (ii) all subprojects falling under category A or Classes 1 and 2 (UZB categorization by Decree No. 152/5); (iii) all subprojects with activities or significant risks as identified in the Environmental Exclusion Checklist and (iv) all subprojects with involuntary resettlement. The EA monitoring department conducts monitoring at the project sites once every six months. In line with the ESMS monitoring requirements the credit officer/ESMS coordinator conducts quarterly monitoring of environmental issues and risks as part of a general monitoring process.
Involuntary Resettlement There were no land acquisition and involuntary resettlement identified.
Indigenous Peoples There were no indigenous peoples impact identified.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations and meetings were held with all stakeholders and parties involved in the project.
During Project Implementation Consultations with all related stakeholders are conducted on regular basis to address any issues related to project implementation.
Business Opportunities
Consulting Services

Three (3) consulting services packages worth $600,000 for the following: (i) technical advisory services for PFIs; (ii) capacity development for project beneficiaries, including gender development; and (iii) Uzagroexport capacity development.

One (1) package for project financial audit worth $150,000

Procurement Shopping (goods) in five (5) contracts worth $91,000 for the following: (i) motor vehicles for PMO's project monitoring; (ii) computers and printers for PMO; (iii) air-conditioners; (iv) office furniture; (v) accounting software
Responsible ADB Officer Nasirov, Tal'at Ubaydullaevich
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Uzbekistan Resident Mission
Executing Agencies
Agency for Implementation of Projects in Agro-Food
[email protected]
1A, Block "A", Lazbak Street,
Tashkent, 100000
Republic of Uzbekistan
Tashkent
Timetable
Concept Clearance 26 Sep 2016
Fact Finding 19 Aug 2016 to 30 Aug 2016
MRM 07 Oct 2016
Approval 25 Nov 2016
Last Review Mission -
Last PDS Update 30 Apr 2021

Loan 3471-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Nov 2016 03 Mar 2017 28 Apr 2017 30 Jun 2022 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 215.00 Cumulative Contract Awards
ADB 154.00 18 Oct 2021 151.43 0.00 100%
Counterpart 61.00 Cumulative Disbursements
Cofinancing 0.00 18 Oct 2021 151.43 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - Unsatisfactory - Unsatisfactory

Loan 3673-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Jun 2018 05 Nov 2018 03 Dec 2018 30 Jun 2022 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 326.00 Cumulative Contract Awards
ADB 198.00 18 Oct 2021 194.81 0.00 98%
Counterpart 128.00 Cumulative Disbursements
Cofinancing 0.00 18 Oct 2021 191.71 0.00 97%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - Unsatisfactory - Unsatisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Horticulture Value Chain Development Project (Additional Financing): Ipak Yuli Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Oct 2021
Horticulture Value Chain Development Project: Davr Bank Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Oct 2021
Horticulture Value Chain Development Project: AIFSA Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Aug 2021
Horticulture Value Chain Development Project: Turon Bank Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Aug 2021
Horticulture Value Chain Development Project: Hamkorbank Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Aug 2021
Horticulture Value Chain Development Project: Ipoteka Bank Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Aug 2021
Horticulture Value Chain Development Project: Uzpromstroybank Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Jul 2021
Horticulture Value Chain Development Project (Additional Financing): National Bank for Foreign Economic Activity of the Republic of Uzbekistan Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project (Additional Financing): Ipoteka Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project (Additional Financing): Uzpromstroybank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project (Additional Financing): Davr Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project: Ipoteka Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project: NBU Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project: Uzpromstroybank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project: Davr Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jan 2021
Horticulture Value Chain Development Project (Additional Financing): Ipak Yuli Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Dec 2020
Horticulture Value Chain Development Project: Turon Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Dec 2020
Horticulture Value Chain Development Project (Additional Financing): Turon Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Dec 2020
Horticulture Value Chain Development Project: Hamkorbank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Oct 2020
Horticulture Value Chain Development Project: Project Administration Manual Project/Program Administration Manual Sep 2020
Horticulture Value Chain Development Project (Additional Financing): Updated Project Administration Manual Project/Program Administration Manual Sep 2020
Horticulture Value Chain Development Project: Asaka Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Sep 2020
Horticulture Value Chain Development Project (Additional Financing): Asaka Bank Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Aug 2020
Horticulture Value Chain Development Project: AIFSA Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jul 2020
Horticulture Value Chain Development Project: UzPromStroyBank Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Oct 2019
Horticulture Value Chain Development Project: Asaka Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Oct 2019
Horticulture Value Chain Development Project: Ipak Yuli Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Oct 2019
Horticulture Value Chain Development Project: Ipoteka Bank Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Oct 2019
Horticulture Value Chain Development Project: Davr Bank Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Oct 2019
Horticulture Value Chain Development Project: AIFSA Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Sep 2019
Horticulture Value Chain Development Project: Turon Bank Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Sep 2019
Horticulture Value Chain Development Project: Hamkorbank Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Sep 2019
Horticulture Value Chain Development Project (Additional Financing): Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Aug 2019
Horticulture Value Chain Development Project: Procurement Plan Procurement Plans Feb 2019
Project Agreement for Loan 3673-UZB (Ipoteka Bank): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Project Agreement for Loan 3673-UZB (Ipak Yuli Bank): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Loan Agreement (Ordinary Operations [Concessional]) for Loan 3673-UZB: Horticulture Value Chain Development Project (Additional Financing) Loan Agreement (Ordinary Resources) Nov 2018
Project Agreement for Loan 3673-UZB (National Bank for Foreign Economic Activity of the Republic of Uzbekistan): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Project Agreement for Loan 3673-UZB (Rural Restructuring Agency): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Project Agreement for Loan 3673-UZB (Turon Bank): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Project Agreement for Loan 3673-UZB (Asaka Bank): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Project Agreement for Loan 3673-UZB (Davr Bank): Horticulture Value Chain Development Project (Additional Financing) Project/Program Agreements Nov 2018
Horticulture Value Chain Development Project: Rural Restructuring Agency Audited Project Financial Statements (2 March 2017-31 December 2017) Audited Project Financial Statements Aug 2018
Horticulture Value Chain Development Project (Additional Financing): Gender Action Plan Gender Action Plans May 2018
Horticulture Value Chain Development Project (Additional Financing): Report and Recommendation of the President Reports and Recommendations of the President May 2018
Horticulture Value Chain Development Project (Additional Financing): Project Administration Manual Project/Program Administration Manual May 2018
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Project Agreement for Loan 3471-UZB: Horticulture Value Chain Development Project Project/Program Agreements Mar 2017
Loan Agreement (Special Operations) for Loan 3471-UZB: Horticulture Value Chain Development Project Loan Agreement (Special Operations) Mar 2017
Horticulture Value Chain Development Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2016
Horticulture Value Chain Development Project: Gender Action Plan Gender Action Plans Nov 2016
Horticulture Value Chain Development Project: Project Administration Manual Project/Program Administration Manual Oct 2016
Horticulture Value Chain Development: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Sep 2016
Horticulture Value Chain Development: Project Preparatory Technical Assistance Report Project Preparatory Technical Assistance Reports Sep 2016

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Consulting services for Financial Audit for 2020-2022 fiscal years Firm - Consulting Closed 14 Jan 2021 12 Feb 2021
Consulting Services for Project Mid-term assessment Firm - Consulting Closed 08 Apr 2020 07 May 2020
Establishment of Women Farmers Associations (WFA) and creation of Council of Women Farmers (CWF) Firm - Consulting Closed 19 Sep 2019 18 Oct 2019
Training and capacity development to PFIs in the assessment, monitoring and management of environmental and social protection measures of the sub-loans implemented in the horticulture sector Firm - Consulting Closed 09 Aug 2019 09 Sep 2019
Consulting services to improve the capacity of JSC "Uzagroexport" to increase exports of horticulture products of the Republic of Uzbekistan and promote these products to foreign markets Firm - Consulting Closed 25 Oct 2018 23 Nov 2018
Training for main stakeholders and beneficiaries on the topic "Storage and processing of fruits of & vegetables" and associated gender development & mainstreaming Firm - Consulting Closed 05 Jun 2018 04 Jul 2018
Training for main stakeholders and beneficiaries on the topic "Production & growing of fruits & vegetables" and associated gender development & mainstreaming Firm - Consulting Closed 05 Jun 2018 04 Jul 2018
Training for main stakeholders and beneficiaries on the topic "Delivery of fruits of & vegetable products to the consumer and exporting" and associated gender development & mainstreaming Firm - Consulting Closed 05 Jun 2018 04 Jul 2018
Audit of Annual Project Financial Statements for FYs 2017, 2018 and 2019 Firm - Consulting Closed 31 Dec 2017 15 Jan 2018
Project Management and Implementation Firm - Consulting Closed 31 Dec 2017 15 Jan 2018

Contracts Awarded

No contracts awarded for this project were found


Procurement Plan