Signing of Agreement on Financing the Second Phase of the Project 'Diversification and Modernization of Agriculture' with the International Fund for Agricultural Development

On August 4 this year, President of the International Fund for Agricultural Development (IFAD) G. Houngbo and Deputy Prime Minister - Minister of Investment and Foreign Trade of the Republic of Uzbekistan S. Umurzakov signed a Financing Agreement worth USD 47 million under the 2nd phase of the project 'Diversification and Modernization of Agriculture' via video-conferencing.

 According to the Agreement, the IFAD will allocate long-term concessional borrowed funds amounted to USD 46.2 million, as well as grant funds amounted to USD 800 thousand.

The project involves Andijan, Namangan and Fergana regions and includes a number of components, namely:

- financing of projects for the diversification and modernization of agriculture through the State Fund for Supporting Entrepreneurship of Agroindustrial Enterprises and Farmers to build the potential of Uzbekistan's agricultural sector, support the Association of Business Women of Uzbekistan, the Association of Fish Farming, the Research Institute of Livestock, Poultry, Fisheries, and to implement international quality and safety standards in agriculture.

- support of youth and women's entrepreneurship in rural areas by expanding access to credit products;

- modernization of irrigation systems, weather-stations and other infrastructure to diversify agricultural production, increase the fruitfulness of planting acreage and improve water management.

The project provides for the creation of modern greenhouses, intensive gardens, the introduction of environmentally friendly and water-saving technologies, an increase in mechanization rate, refining capacity and expansion of storage facilities in Fergana valley regions.

It is expected that the project will positively effect on the growth of incomes of more than 375 thousand residents of the region by increasing labor productivity in agriculture due to implementation of modern farming methods, as well as the creation of additional highly paid workplaces in rural areas.

The participants of the ceremony noted the importance of this project to achieve the strategic goals outlined in the Strategy for the Development of Agriculture in Uzbekistan for 2020–2030, i.e. efficient use of land and water resources, improvement of investment climate in the industry and increase in the competitiveness of the domestic agro-industrial sector.

Following the meeting, the parties expressed their commitment to actively cooperate and intensify the development of agriculture in Uzbekistan through sustainable value chains and introduction of modern technologies and developments in this sector, which will ensure dynamic growth of production and exports, new jobs and will positively effect the development of the Republican's regions in general.

For reference: IFAD is a specialized UN agency mainly focused on the mobilization of financial resources to increase food production and improve the nutritional status of people in developing countries.  Since 1997, The IFAD has provided about USD 10 billion in concessional loans and grants to finance more than 700 programs and projects to help 350 million people in 90 countries.

The IFAD's project pipeline in Uzbekistan includes 4 projects totaling USD 139.5 million, including 1 project worth USD 28.3 million aimed at support of the development of the fruit and vegetable sector in Uzbekistan, which was implemented in 2019. Other projects focused on the development of agriculture and value chains in the dairy sector are in the implementation phase.

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