Interim Session of the Council of Foreign Investors under the President of the Republic of Uzbekistan
On November 20 this year, Tashkent hosted the Interim Session of the Council of Foreign Investors under the President of the Republic of Uzbekistan arranged by the Ministry of Investment and Foreign Trade of the Republic of Uzbekistan supported by the European Bank for Reconstruction and Development (EBRD).
The Minister of Investment and Foreign Trade of the Republic of Uzbekistan S. Umurzakov, Managing Director of the EBRD for Central Asia B. Balvanera, Head of EBRD Representative Office in Uzbekistan A. Drakinos, representatives of the World Bank, International Finance Corporation, Asian Development Bank, Islamic Development Bank, Heads of the State Assets Management Agency, the Ministry of Economy and Industry and the Central Bank of the Republic of Uzbekistan attended the session.
It was also attended by the heads of foreign companies operating or planning to invest in Uzbekistan, such as British American Tobacco (Great Britain), JP Morgan Chase (USA), CNPC (China), KNOC (South Korea), Lukoil (Russia), Knauf (Germany), Carlsberg (Denmark), Posco Daewoo (South Korea), etc. Besides, experts from international consulting agencies, i.e. Ernst & Young, KPMG, Deloitte, Pricewaterhouse Coopers, Dentons and media representatives were invited.
The Council of Foreign Investors has a primary target to participate directly in creating a favorable investment climate and effective tools to stimulate local and foreign entrepreneurs to invest in priority economic sectors and regions in order to organize advanced competitive export-oriented productions.
The Session took the format of an open discussion involving such issues like improvement of interaction between investors and government bodies, creating favorable required legal, regulatory and institutional foundations for privatization, improvement of valuation activities and corporate legislation.
During the opening ceremony, the Head of the Session, S. Umurzakov, noted the importance of a healthy and transparent business environment within climate of confidence providing adoption of innovative ideas and promising business initiatives. In turn, this will provide a significant advantage under persistent international competition to strengthen Uzbekistan's position in global investment flows.
On behalf of the Government, he disclosed firm intention to continue consistent work improving legal basis, eliminating excessive administrative barriers and developing the infrastructure. He also called on the participants of the Session to focus on bank and financial sector reforming, acceleration of privatization of state property and introduction of objective assets evaluation. At this stage of economic transformation, this will significantly increase the investment attractiveness of Uzbekistan, ensure additional investment, and generally improve the country’s economic performance.
The representatives and consultants of the EBRD also addressed during the Session and highly appreciated the confidence and dynamism of changes in the country. In turn, they noted a positive trend in the increase of investment activity in the Central Asian region against the decrease in global foreign direct investment over the past three years.
The EBRD Advisor G.Kvirikashvili shared his opinion on the prospects for further Council’s activity. The structure will be transformed into an open platform for discussion and study of pressing concerns of foreign investors. Subsequently, based on the specifics of incoming requests, there will be created the working groups to study specific cases and develop solutions directly supported by the Council’s Secretary's Department. This format will significantly increase the practical significance of the Council.
The Session was also marked with speeches of the Council’s members - foreign entrepreneurs shared their views on this structure significance both for the country and within their personal participation in the projects in Uzbekistan.
The event called on and considered number of constructive proposals related to the agenda. In particular, the participants proposed to introduce such terms as ‘holding company’, ‘pass-through taxation’ and various classes of shares and other world-wide corporate law concepts into the Uzbek Law, as well as provide the investors with greater flexibility in defining of corporate policy.
They selected a unified view on the prospects of accelerated privatization of commercial banks through the sale of controlling interest to interested investors, as well as optimization of Banks’ current activity in Uzbekistan by digitalizing the banking system and introducing advanced products and practices.
The participants discussed the need to develop a legal basis for establishment and operation of branches of foreign commercial organizations and a single electronic registry reflecting full data about business entities and enabling lookback analysis of each company from the very establishment. Leading international consulting companies vested an interest in active launch of initiatives announced.
The meeting resulted in signing of loan agreements between the Republic of Uzbekistan and the European Bank for Reconstruction and Development on the following projects (totally USD 246.1 million):
- construction of a 220 kV line, 500kW sized, 177 km long from the Navoi TPP to the 220 kV switching point Besopan (loan amount – USD 96.1 million, implementation agency - National Electric Networks of Uzbekistan JSC);
- reconstruction and construction of a sewage systems in Karshi, Kashkadarya region (loan amount – USD 60.0 million, implementation agency – the Ministry of Housing and Public Utilities);
- reconstruction and construction of a sewage system in Urgench, Khiva and Pitnak of the Khorezm region (loan amount – USD 90.0 million, implementation agency - the Ministry of Housing and Public Utilities).
For reference: the Council of Foreign Investors was created according to the Resolution of the President of the Republic of Uzbekistan No. PP-4519 dd. November 13, 2019 on Measures to create and organize the Council of Foreign Investors under the President of the Republic of Uzbekistan.
This Council was formed of managers and representatives of foreign companies, banks, international financial institutions and foreign government financial organizations, in particular the EBRD.
The Council holds its events as plenary sessions headed by the President of the Republic of Uzbekistan and interim sessions headed by the Minister of Investment and Foreign Trade of the Republic of Uzbekistan.