Wednesday, 11 May 2022
On 8 April 2022, the President signed Decree No. UP-101, which provides for improvement of the country’s competitive and investment environment, the acceleration of privatization, the reduction of the role of the state in the national economy, and wider implementation of public-private partnership (PPP) projects in previously state-dominated industries. This Legal Alert focuses on some of the most notable measures in the spheres of PPP and privatization. An inventory of large PPP projects envisaged to be implemented in 2022-2024, as contained in the Decree, is also attached (can be downloaded at the link at the bottom of this page).
The Decree provides for a number of measures aimed at wider implementation of PPP projects in energy, gas, transportation, and public utilities. In particular, it is envisaged that:
- by 1 May 2022, the Ministry of Housing and Communal Services and other state bodies will prepare a list of potential PPP projects for improving district heating, water supply, and sewerage systems across Uzbekistan. Measures shall also be proposed to ensure that the activities in utilities become a profitable business and no substantial state subsidies are required;
- by 9 June 2022, the Ministry of Transport and other state agencies will develop proposals for transferring international airports operated by JSC “Uzbekistan Airports”, including the Tashkent International Airport, for private management based on PPP;
- by 1 August 2022:
- private entities will be able to access tank farms of JSC “Uzbekneftegaz” through open tenders or based on PPP;
- proposals will be developed to engage private businesses into providing public transportation services in Tashkent based on, among others, PPP, in accordance with the approved Concept for the Development of Public Transportation in Tashkent;
- part of the rail freight and passenger transportation activities of JSC “Uzbekistan Railways” will be transferred to the private sector based on PPP or franchise agreements;
- by 1 September 2022, the Government will implement pilot projects for transferring operations related to the local distribution of gas and electricity from state-owned JSC “Hududgaztaminot” and JSC “Regional Power Grids” to private entities in 14 regions and cities of Uzbekistan;
- by 1 September 2022, proposals for the implementation of new PPP hydro power projects will be developed.
Transformation and Privatization
The Decree sets that purchasers of state assets and non-agricultural land are now allowed to pay a relevant purchase price in installments over a period of up to 3 years. Purchasers whose first payment is not less than 35% of the total value, are allowed to provide relevant objects as a collateral under loan agreements.
The Decree also provides for the transformation and privatization of a number of state-owned enterprises:
- by 1 May 2022, work will be initiated to privatize 49% of shares of the hydrocarbons extraction monopolist JSC “Uzbekneftegaz” and 51% of shares of the electricity generation monopolist JSC “Thermal Power Plants”, including through IPO;
- by 1 June 2022, a program for the transformation of JSC “Uzbekistan Railways” will be developed. By 1 November 2022, a policy will be developed for the engagement of private entities in the provision of ancillary services in railway transportation, including repair of wagons, preparation of goods for transportation, etc.
- by 1 August 2022, 10% of the shares of the large automobile plant JSC “UzAuto Motors” JSC will privatized through IPO; proposals will be developed for privatizing the remaining shares of the company as well as of JSC “UzAuto Motors Powertrain” and LLC “Samarkand Automobile Plant”;
- by 1 September 2022:
- work will be initiated to privatize 51% of shares of Uzbekistan’s national air carrier JSC “Uzbekistan Airways”, including through IPO;
- strategies for the reforming of the state-owned telecom company JCS “Uzbektelekom”, the national post operator JSC “Uzbekiston Pochtasi”, and the state-owned operator of hydropower stations JSC “Uzbekhydroenergo” will be developed.
Please click the button below to download the full version of this Legal Alert and the List of Large PPP Projects Envisaged to be Implemented in 2022-2024.