Uzbekistan: Spotlight On Uzbekistan: Kinstellar's Regular Look At The Uzbek Market

Last Updated: 22 May 2019
Article by Joel Benjamin and Muborak Kambarova

May 2019 – Kinstellar's regular look at the Uzbek market

Further improvement of mechanisms for attraction of foreign investments

In order to increase the efficiency of activities to attract foreign direct investment in the economy of Uzbekistan, the Presidential Resolution No. PP-4300 was adopted. The Resolution provides that FDI can be attracted through the sale of shares in 29 companies:

  1. Financial Institutions: 25% of the state share will be sold in three banks ("Alokabank", "Turonbank", "Asia Alliance Bank") and one insurance company ("Kafolat"). A part of "Alokabank" and "Asia Alliance Bank" shares will be offered to the public through IPO and SPO.
  2. Construction: 35% of "Kizilkumcement" (Navoi region) shares and 74.9% of "Quartz" (Fergana region) shares will be sold in. Moreover, 20% of "Quartz" shares will still be offered through SPO. Last year, the company held an IPO, and the stake will be sold with the condition of making an investment of USD 15 million.
  3. Fat and Oil Industry: A controlling stake, from 51% to 84.5%, will be sold in "Evrosnar", "Kattakurgon yog-moy", "Urgench yog-moy", "Toshkent yog-moy combinati", "Fargona yog-moy" and "Karshi yog extraction".
  4. Alcohol Production: 71.2% of "Khovrenko Samarkand winery" shares, 57.2% of "Namangan wine" shares and 51% of "Shokhrud" shares will be sold.
  5. Food Industry: A controlling stake (57%) of the shares will be sold in Coca-Cola Ichimligi Uzbekistan.
  6. Chemical Industry: The control packages (48% and 2.9%) of "Fergana Nitrogen", "Kungrad Soda Plant" (51%) and "Dekhkanabad Soda Plant" (more than 51%) will be sold.
  7. Electric Power Industry: Thermal power plants - Angren (99%) and Novo-Angren (99.5%) will be sold. Oil and gas industry: A controlling stake, from 51% to 100% will be sold in "Bukhoroneftgazparmalash", "Uzneftekazkuduktamirlash", "Kashkadaryoparmalash ishlari", "Neft va gaz kudukchilarni sinash", "Surhon parmalash ishlari", "Andijanneftgazkuduktamirlash", "Fergana oil depot" and "Gulistan oil depot".

The Resolution also provides that the Tashkent International Investment Forum (the "Forum") will be held. The organizing committee for the preparation of the Forum is headed by Prime Minister, Abdulla Aripov. In addition, the committee is granted with the right to attract leading foreign companies for financial, legal and information support of the Forum.

Presidential Resolution "On Measures for Further Improvement of Mechanisms of Attraction of Foreign Direct Investments in Economy of the Republic" No. PP-4300 of 29 April 2019.

Changes on import of pharmaceutical products

On 10 April 2019, the Presidential Decree "On Measures to Further Develop the Pharmaceutical Network of the Republic of Uzbekistan in 2019–2021" was adopted. In accordance with the Decree, the Agency for Pharmaceutical Network Development has been transferred to the Ministry of Health. A list of the medical products to be produced in Uzbekistan, is compiled by the Agency and approved by the Cabinet of Ministers.

The Cabinet of Ministers approves the list of raw materials, pharmaceuticals and medical equipment for pharmaceutical production. In addition, raw materials and materials not produced in Uzbekistan, used for the maintenance of preclinical studies and production of medicines (exempt from the VAT on imports until 1 January 2022), were approved.

Moreover, in 2019–2020, production of 10 types of pharmaceutical products, which includes antibiotics and oncological medication, will be produced locally.

Presidential Decree "On Measures to Further Develop the Pharmaceutical Network of the Republic in 2019–2021" No. UP-5707 of 10 April 2019.

Private health care will be developed through PPP projects

On 16 April 2019, the President signed the Resolution "On Measures to Develop Public–Private Partnership in the Healthcare Sector." The Regulation is aimed to develop the private healthcare system and attract foreign investment.

PPP projects in healthcare are implemented in the following forms:

  • design, construction, reconstruction, equipping, financing and maintenance of public health infrastructures;
  • provision of goods and services in healthcare.

According to the Regulation, the private partner is selected on the basis of a tender or direct negotiations. The term of the agreement is determined by the partners, but may not be less than three nor more than forty-nine years. At the end of the agreement, allocated land plots, the purchased medical and other equipment, as well as the facilities built by the private partner, are to be transferred to the public partner.

The Fund for Reconstruction and Development of Uzbekistan provides preferential loans only for the purchase of imported equipment and inventory. The term of such loans is up to eight years with a three-year grace period. However, the purchased equipment and inventory obtained with such financing should not exceed 20% of the total investment.

Presidential Resolution "On Measures to Develop Public–Private Partnership in the Healthcare Sector" No. PP-4290 of 16 April 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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