Assalomu aleykum janob Odilbek Isakov! Birlashgan Millatlar Tashkiloti Taraqqiyot Dasturi nomidan sizni qutlayman. 

Congratulations to Ministry of Finance, Islamic Corporation for Development of the Private Sector, and Ansher Capital for organizing this event. 

Financing of Uzbekistan’s National Development priorities and the SDGs 

Uzbekistan continues implementation of its ambitious reform agenda. Relying on foreign direct investment, unleashing its domestic private sector and a ‘growth-spur’ from the demographic dividend, along with a strong commitment to achieve the SDGs, the authorities aim for Uzbekistan to increase the GDP per capita 1.6 times during the next 5 years and join the group of higher middle-income countries by 2030.

Achieving the ambitioned economic diversification and modernization requires stepping up investments in both human capital and economic infrastructure. We all understand that these ambitious goals require significant financial resources. 

Early 2020 UNDP supported Development Finance Assessment which pointed that achieving SDGs requires at least estimated annual additional investments worth USD 6 billion, with important additional spending required in agriculture, health sector and in energy and transport infrastructure.It also pointed that harnessing the country’s growing private financial flows, both domestic and international, will be critical to complement ongoing reforms improvements in public spending efficiency, effective governance and the doing business environment.

And this is the situation not only with Uzbekistan. The need to leverage additional investments through introduction of innovative financing instruments prevails in other contexts as well. Countries are increasingly looking for new sovereign and thematic bonds (e.g., SDGs bonds, green bonds, etc.), blended finance mechanisms, Islamic Finance instruments, to complement the public development finance. 

With this in mind, UNDP has been supporting Uzbekistan to develop Integrated National Finance Framework - a framework to help build more holistic approach for mobilizing and aligning public and private finance with national objectives, and strengthen dialogue and collaboration across government, the private sector and civil society. The related Financing Strategy is now being elaborated.

Uzbekistan has made exceptionally good start with introduction of new financing instruments to mobilize private sector finance to national development process. Clear example is the successful last year’s issuance of Sovereign SDGs Bonds in only in soums to finance public SDG-oriented programmes in seven areas (Education, Water Management, Health, Green Transportation, Pollution Control, Management of Natural Resources, Green Energy). UNDP is proud to have supported this undertaking, and we continue with other. For example, we start to work on promoting inclusive insurance and integration of insurance into development planning and financing in Uzbekistan. Basically, to use insurance risk instruments and work side-by-side with the insurance industry to scale protection and build long-term resilience in key sectors (agriculture). 

UNDP’s ongoing joint initiative with the MOF and IsDB on Green Sukuk

Part of UNDP’s support is promotion of Islamic Finance in Uzbekistan.  We are aware that as the world financing systems are becoming more sophisticated and discover new operating models, Islamic Financing instruments - including sukuk - have emerged as a new promising tool to attract development financing. Sukuk instruments are gaining recognition not only in the Muslim countries, but also worldwide. According to Firth Rating, total global amount of sukuks issued in 2021 reached USD 252 billion, while total outstanding sukuks in the market exceeded USD 711 billion. 

“Green” sukuk is a new type of sukuk that is used to finance environmentally sustainable projects, for example, in development of renewable energy sources, introduction of energy efficient and resource-saving technologies, solid waste management. Green Sukuk is becoming extremely important due to its two-fold benefit of both as an alternative instrument to finance SDGs and as a support to the climate change action. We believe that green sukuk can be a steppingstone on a journey to channel finances towards sustainable development in Uzbekistan. Moreover, introduction of sukuks could pave the wave for development of other instruments based on Islamic finance principles and help achieve greater financial inclusion of Uzbekistan’s population.

Considering this, UNDP, together with the Islamic Development Bank, initiated a Technical Assistance project – to assist the Government in establishing a proper enabling environment for green sukuk. The goal is to develop relevant legislative, institutional and regulatory framework. Currently, the work started on reviewing the national legislation and existing gaps as well as developing recommendations for improvement of the legislative and regulatory environment. Later today representatives of the White & Case will provide insight on the work so far. 

We are very glad that today’s webinar is being organized during the time when Uzbekistan is hosting an International Investment Forum aimed at presenting the investment potential of Uzbekistan as well as attracting investors to the dynamically developing market of Uzbekistan. I hope today’s event will be opportunity to share the views and international good practices in Sukuk as well as to discuss with business community and investors the attractiveness and applicability of this instrument in the context of Uzbekistan. 

Thanks, and Conclusion

I wish all the participants of today’s event an interesting and productive discussion. Etiboringiz uchun katta rahmat! (Thank you for your attention!)