ADB grants $198m loan to Uzbekistan’s horticulture sector

The Asian Development Bank has granted $198m in additional financing in order to support horticulture value chain development across 12 regions in Uzbekistan, in addition to the autonomous region of the Republic of Karakalpakstan.

The additional $198m loan is set to complement the current Horticulture Value Chain Development Project, which was approved in November 2016 and enabled the government to offer subsidiary loans to participating financial institutions (PFIs).

Additionally, the initiative aims to help PFIs expand their lending portfolio to qualified farmers and enterprises in order to finance horticulture operations, including building greenhouses, planting materials, establishing intensive orchards, and installing machinery and equipment, along with the development of processing and storage facilities.

ADB senior natural resources and agriculture economist for Central and West Asia Bui Minh Giap said: “More horticulture farmers and enterprises along the horticulture value chain will be able to access long-term financing from this additional support.

“The project will help promote long-term economic and environmental sustainability and enhance profitability for farmers and agribusiness enterprises.”

The $198m loan will help bolster the outreach of seven of the project’s PFIs, namely Davr Bank, Ipak Yuli Bank, Ipoteka Bank, Asaka Bank, Turon Bank, the National Bank of Uzbekistan and Uzpromstroybank.

Farmers, agro-processing enterprises, and owners and operators of cold storage facilities, as well as trading and logistics service suppliers will gain access to market-based finance as a result of the project.

Furthermore, the funding is expected to boost farm productivity in the region by improving processing and storage capacity, in addition to reducing post-harvest losses via the creation and upgrade of intensive orchards and various processing, storage and refrigeration facilities.

The agriculture sector is an important contributor to Uzbekistan’s economy, comprising approximately 32% of the total employment opportunities within the country.