Uzbekistan : Financial Markets Development Program (Subprogram 1)

Sovereign Project | 53161-001

The program proposes to introduce reform measures that deepen and broaden Uzbekistan's financial markets by (i) developing the public debt management framework to promote a more liquid government bond market; (ii) enhancing institutional investor demand by broadening, deepening, and diversifying the investor base; (iii) supporting the money markets; (iv) developing critical market infrastructure including surveillance systems, consolidating trading systems, and enhancing post-trading systems; and (v) enhancing the supply of alternative financial instruments such as exchange-traded funds.

Project Details

Project Name
Financial Markets Development Program (Subprogram 1)
Project Number
53161-001
Country / Economy
  • Uzbekistan
Project Status
Active
Project Type / Modality of Assistance
  • Loan
  • Technical Assistance
Source of Funding / Amount
Loan 4123-UZB: Financial Markets Development Program (Subprogram 1)
Source Amount
Concessional ordinary capital resources lending US$ 100.00 million
TA 6796-UZB: Supporting the Financial Markets Development Program
Source Amount
Technical Assistance Special Fund US$ 500,000.00
TA 6796-UZB: Supporting the Financial Markets Development Program
Source Amount
Financial Sector Development Partnership Special Fund US$ 125,000.00
TA 6796-UZB: Supporting the Financial Markets Development Program
Source Amount
Technical Assistance Special Fund US$ 400,000.00
Operational Priorities
  • OP2: Accelerating progress in gender equality
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Finance / Finance sector development

Gender
Some gender elements
Description
The program proposes to introduce reform measures that deepen and broaden Uzbekistan's financial markets by (i) developing the public debt management framework to promote a more liquid government bond market; (ii) enhancing institutional investor demand by broadening, deepening, and diversifying the investor base; (iii) supporting the money markets; (iv) developing critical market infrastructure including surveillance systems, consolidating trading systems, and enhancing post-trading systems; and (v) enhancing the supply of alternative financial instruments such as exchange-traded funds.
Project Rationale and Linkage to Country/Regional Strategy

The Government of Uzbekistan has accelerated its transition toward a market economy with the adoption of the Strategy on Actions for Further Development of Uzbekistan (2017-2021) and follow-on Roadmap of Reforms (2019-2021). Both the strategy and the road map recognize the central role played by the banking sector and financial markets in fostering this transition. The Roadmap of Reforms tasks the government with modernizing and developing financial markets to better address the financing needs of the real economy, which is moving away from a state-led and state-dominated economy towards a market-oriented, private sector-led model. Underdeveloped financial markets have contributed to the ineffective mobilization of savings with gross domestic savings at 31% of gross domestic product (GDP), which is lower than regional peers such as Kazakhstan (42% of GDP). The introduction of market-based instruments, backed by a sound enabling environment for competitive financial markets, will mobilize private sector financing and help the private sector become the driver of sustainable economic growth.

The proposed program will support demand and supply measures to broaden and deepen the financial system in Uzbekistan to facilitate effective intermediation. It will support policy, regulatory, and institutional (including market infrastructure) reforms necessary to create an enabling environment for competitive financial markets in line with the government's Strategy on Actions for Further Development of Uzbekistan (2017-2021) and follow-on Roadmap of Reforms (2019-2021), Asian Development Bank (ADB) country partnership strategy (CPS) for Uzbekistan, 2019-2023, and the ADB country operations business plan for Uzbekistan, 2021-2023. The programmatic approach, comprising two subprograms, will help sequence reforms over a 4-year timeframe (2019-2023) and provide flexibility to incorporate changes if warranted. TA attached with the program's concept paper approval in 2019 supported reform measures from 2019 to 2021. With its emphasis on creating an enabling environment for financial market development, the program design is robust and fits well with the country's needs as a growing and economically diversifying economy. The attached TA will assist in implementing the program.

Impact

Well-functioning financial system that supports basic capital and investment needs and the country's long-term economic objectives.

Project Outcome

Description of Outcome

Greater capacity and size of the financial markets.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

The legal and regulatory structures for the development of the securities market have improved.

The supply and demand of securities have increased.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Nation-wide

Safeguard Categories

Environment
C
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Business Opportunities

Consulting Services
ADB will engage a consulting firm to implement the TA. It is estimated that 15 person-months of international and 3 person-months of national consultants' services will be required. The proposing entities may propose some adjustments with justification. Given the highly specialized expertise needed, the consulting firm will be engaged through quality and cost-based selection method using a standard qualitycost ratio of 90:10. ADB will select the consulting firm based on a simplified technical proposal. The team of consultants will have expertise in capital markets, insurance and pensions development and facilitation across diverse technical facets (including institutional, legal and regulatory, infrastructure).

Contact

Responsible ADB Officer
Kuchkarov, Adhamjon
Responsible ADB Department
Sectors Group
Responsible ADB Division
Finance Sector Office (SG-FIN)
Executing Agencies
Ministry of Economy and Finance

Timetable

Concept Clearance
16 Jul 2019
Fact Finding
13 Apr 2020 to 07 May 2020
MRM
09 Jul 2021
Approval
07 Oct 2021
Last Review Mission
-
Last PDS Update
07 Oct 2021

Funding

Loan 4123-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Oct 2021 09 Dec 2021 21 Feb 2022 31 Dec 2021 02 Mar 2022 01 Mar 2022
Financing Plan
  Total (Amount in US$ million)
Project Cost 100.00
ADB 100.00
Counterpart 0.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 100.00 0.00 100%
Cumulative Disbursements 06 Jun 2024 100.00 0.00 100%

TA 6796-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Oct 2021 30 Oct 2021 30 Oct 2021 30 Sep 2023 31 Mar 2025 -
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
1,025,000.00 0.00 0.00 0.00 0.00 0.00 1,025,000.00
Cumulative Disbursements
Date Amount
06 Jun 2024 833,623.59

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.


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.

None currently available.


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
Supporting the Financial Markets Development Program Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.