WASHINGTON – The World Bank’s Board of Directors today approved $200 million in financing for the second Rural Enterprise Development Project (REDP) to support the creation and expansion of farms and businesses. rural enterprises in 10 regions of Uzbekistan. The financing includes a $180 million loan from the International Bank for Reconstruction and Development (IBRD) and a $20 million credit from the International Development Association (IDA).
The REDP will help create new jobs and ensure a flow of finance to micro, small and medium-sized enterprises (MSMEs), as well as financial institutions, in Tashkent, Syrdarya, Jizzak, Samarkand, Kashkadarya, Surkhandarya, Navoiy, Bukhara, Khorezm and Karakalpakstan.
Bank financing under the project will focus on measures to stimulate rural sector growth and address gaps in service delivery and access to technology for rural entrepreneurs. The project supports the “Strategy for the agricultural development of Uzbekistan in 2020-2030” of the government of Uzbekistan.
MSMEs are drivers of economic growth and development globally and in Uzbekistan. However, the limited financing for MSME investments remains a key barrier to their growth and the entry of new businesses. The sector also needs better access to advisory services and business development support. The REDP is designed to provide financial and non-financial support to rural MSMEs and financial institutions in Uzbekistan.
“The World Bank is proud to continue its partnership with the Government of Uzbekistan, building on and expanding the work of the Ferghana Valley Rural Enterprise Development Project (FVREDP), which has so far supported some 450 small and medium enterprises and contributed to the creation of 7,850 jobs,” said Marco Mantovanelli, World Bank country director for Uzbekistan. “The new project will support climate-resilient investments in rural areas, offer business advice and business development, foster the creation of value chains and productive partnerships between producers, processors and traders, and support the ‘women’s entrepreneurship in rural communities’.
A major component of the REDP is addressing key barriers to accessing finance faced by farmers, agribusinesses and other beneficiaries engaged in agriculture and rural economic activities through the expansion of two financing instruments : a line of credit and partial credit guarantees. REDP will also provide technical support to new and existing farms, agribusinesses and rural enterprises in these target regions.
The World Bank has provided significant support for the implementation of the government’s 2017-2021 development strategy. The Bank’s program in Uzbekistan includes 26 projects in areas such as economic management, modernization of agriculture, water resources management, health, education, drinking water and sanitation, energy, transport, social protection, urban and rural infrastructure, national innovation system and taxation administration and the government’s response to the health, economic and social implications of the COVID-19 pandemic.
Under its new five-year Country Partnership Framework, currently being developed, the World Bank will continue to provide financial and analytical support to the government to implement the reforms outlined in Uzbekistan’s development strategy for 2022-2026.