On January 16, 2020, the Cabinet of Ministers adopted the Resolution No. 27 “On Measures for Effective Management of the State Debt and Ensuring the Targeted Use of the Attracted Debt” (the “Resolution”). The Resolution provides for a general strategy for managing the state (sovereign) debt in 2020, introducing a number of procedural requirements and setting some thresholds. The Resolution also mentions legal entities and banks, in which the state share is more than 50 %. The goal is to gradually shift them to market-based financing. Some important developments brought in by the Resolution are briefly described below. (An unofficial translation of the Resolution is available in English at the following link)
As part of the strategy, on February 1, 2020, a specialized guarantee fund under the Treasury of the Ministry of Finance (the “Fund”) will be established to ensure that state loans / state-guaranteed loans are properly repaid by borrowers and refinancing banks. The Fund will make relevant payments, where borrowers (banks) do not make timely and full payments themselves. Such payments will have to be reimbursed to the Fund.
Thresholds for 2020
Giving a reference to the Law on the State Budget for 2020, the Resolution reiterates that:
Procedural Requirements for Financing Projects Through Sovereign Loans
Starting from January 1, 2020, the following procedural requirements will apply:
Regulations on criteria for the selection, the relevant review procedure and on the monitoring of the projects and programs financed through sovereign loans is going to be developed and adopted shortly.
As the Resolution provides, from now on, a relevant medium-term strategy for managing the state debt will be adopted by the Cabinet of Ministers annually with corresponding thresholds and, if required, procedural requirements being updated.
 Rules for the Procedure for Charging Fees for the Provision of Guarantees of the Republic of Uzbekistan for Attracted Foreign Loans No. 7 of January 7, 2004 stipulate that sovereign guarantees on loans extended on preferential terms are charged at the rate of 0.1 % per annum. Therefore, it is unclear whether the Resolution is intended to abolish such a practice.
 The Resolution makes reference to programs of socio-economic and strategic importance that, accordingly, do not require the development of a preliminary project documentation and are funded through sovereign loans.