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NEWS

ADB $154 Million Loan to Boost Horticulture Sector in Uzbekistan

www.adb.org
28 November 2016

The Asian Development Bank (ADB) today approved a $154 million loan to enhance horticulture value chain development in all 12 regions in Uzbekistan and the autonomous region of Republic of Karakalpakstan.

“ADB’s support will help increase access to long term financing for horticulture farmers and enterprises along the horticulture value chain,” said Bui Minh Giap, Senior Natural Resources and Agriculture Economist with ADB’s Central and West Asia Regional Department. “It will allow them to increase their investments, maintain and expand employment, and generate stable incomes for themselves, their employees, and suppliers.” 

The government will relend the ADB loan to participating financial institutions (PFIs) that will extend the subloans to interested and qualified farmers and enterprises to finance horticulture operations, including planting materials, processing and storage equipment, and mechanical equipment.

Eight PFIs were selected among commercial banks that expressed interest to participate in the project. They are Asaka Bank, Davr Bank, Hamkorbank, Ipak Yuli Bank, Ipoteka Bank, National Bank of Uzbekistan, Turon Bank, and Uzpromstroybank.

Agriculture is an important sector in Uzbekistan, accounting for 32% of total employment. It is also a key income source in rural areas, where 49% of the population resides. 

Although it is expected to continue growing, the country’s agriculture sector is characterized by low productivity and has remained labor intensive. The horticulture sector is constrained by limited access to long-term debt financing, quality land, specialized horticulture machinery, and appropriate inputs. Many producers and enterprises along the horticulture value chains also lack business and managerial skills and access to information on market opportunities and technology which hamper the sector’s growth.

Uzbek horticulture exports could expand significantly by capturing a larger share of the Russian Federation market and entering European markets. However, it will require improvements in horticulture quality, safety standards, certification systems, storage, processing, and marketing technologies.

In addition to access to financing, the project will provide support to farmers and enterprise subborrowers to improve their business planning, horticulture agronomic techniques, post-harvesting operations, and export market penetration.

Since Uzbekistan joined ADB in 1995, the country has received $5.1 billion in loans and $64.9 million in technical assistance grants.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.