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 Officer
    Shah, Syed Ali-Mumtaz H.
    Sectors Group
    Request for information
  • Country/Economy
    Uzbekistan
  • Sector
    • Finance

Related Projects

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)
Concessional ordinary capital resources lending US$ 100.00 million
TA 6796-UZB: Supporting the Financial Markets Development Program
Technical Assistance Special Fund US$ 500,000.00
TA 6796-UZB: Supporting the Financial Markets Development Program
Financial Sector Development Partnership Special Fund US$ 125,000.00
TA 6796-UZB: Supporting the Financial Markets Development Program
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).
Responsible ADB Officer Shah, Syed Ali-Mumtaz H.
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

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 Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 100.00 Cumulative Contract Awards
ADB 100.00 25 Sep 2023 100.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 25 Sep 2023 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 Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,025,000.00 0.00 0.00 0.00 0.00 0.00 1,025,000.00 25 Sep 2023 781,022.50

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Related Publications

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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.