SINCE JOINING IN 2003, ISDB HAS PLEDGED $5.45 BILLION TO UZBEKISTAN. WHAT HAS THE PARTNERSHIP DELIVERED, AND WHAT DEFINES THE CURRENT PHASE?

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It has been a very fruitful relationship since Uzbekistan joined the Islamic Development Bank (IsDB) in 2003. The partnership has grown into one of the country’s most significant development collaborations, with cumulative approvals reaching US$5.45 billion as of the end of 2025. Currently, the active, under-implementation portfolio comprises projects in the Health, Education, Rural Development, and Transportation sectors. The IsDB greatly values its strong partnership with Uzbekistan.

 

57% of approvals are through Ordinary Capital Resources (OCR) in favour of the Public Sector, complemented by trade financing (27.9%) and private-sector support from the Islamic Corporation for the Development of the Private Sector (15%). Support for the agriculture sector is among the highest in the country, signifying our profound commitment to enhancing food security and diversifying the economy.

 

Cognizant of the importance of improving transportation corridors to enhance the country's economic competitiveness, we also invest heavily in enhancing Uzbekistan's regional connectivity with its neighbors. One of the prominent projects that the Bank is presently reviewing, in close coordination with other partners, is the Trans-Afghan Railway Corridor, which will play a significant role in the development of not only Uzbekistan but the region.

 

We have an ongoing Member Country Partnership Strategy (MCPS) with the government, which will conclude this year, prioritising economic transformation and human capital development. A mid-term review undertaken in October 2024 confirmed a significant enhancement in developmental impact spurred by the MCPS. Building on the successes of the ongoing MCPS, we will develop a new MCPS, envisioned to be initiated in the second half of the current year and will fully align with the priorities outlined in the Uzbekistan 2030 Strategy.

 

UZBEKISTAN SIGNED ISLAMIC BANKING LEGISLATION IN MARCH 2026. WHAT DOES THIS OPEN UP FOR PRIVATE CAPITAL AND FINANCIAL SECTOR REFORM?

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The adoption of Islamic banking legislation in March 2026 is a transformative turning point for the country’s financial sector. It provides the long awaited legal support to promote Shariah compliant products by mainstreaming Islamic finance as an integrated and regulated part of the national financial system.

 

For private capital, this will open a new opportunity for long term, risk sharing finance aligned with real economic activity. Islamic instruments such as Istisna’ (Construction on Demand), Mudarabah (Profit-sharing Partnership), Musharakah (Equity Financing) and Ijara (Leasing) are particularly well suited to support the development of infrastructure, agribusiness, SMEs and affordable housing sectors that require long-term capital and close linkage to assets.

 

The legislation will promote Uzbekistan as a preferred destination for Islamic Finance Investments globally, thereby attracting FDI and catalysing the country's economic development. For IsDB, this milestone validates years of our technical assistance, policy dialogue, and capacity building, provided by the entire IsDB Group, including the IsDBI, ICD, and ITFC.

 

Presently, we have an active, ongoing collaboration with the Central Bank to support the implementation of the legislation through capacity development initiatives. The Bank is also working on the introduction of Islamic Capital Market legislation and will continue to support the establishment of Islamic Finance infrastructure in the country.

 

WHAT IS YOUR MESSAGE ON ISDB'S COMMITMENT TO GLOBAL INVESTORS?

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Uzbekistan has entered a new phase of accelerated development. IsDB’s long term commitment to Uzbekistan sends a positive signal to the global investment community of our strong confidence not only in Uzbekistan’s growth prospects, but also in the positive direction of the country’s economic reforms.

 

As an institution, we are proud of our long-standing relationship with the Country. IsDB’s mandate goes beyond financing individual projects. Our engagement in Uzbekistan reflects the Bank's strong commitment to inclusive and sustainable long-term growth. The IsDB Group’s investments in the country will serve to facilitate crowding-in private capital for catalysing rapid economic transformation.

 

At a time when investors are seeking resilient markets with diversification opportunities, Uzbekistan stands out as a shining star. IsDB’s commitment is a testament to its firm faith in the country’s long-term development trajectory, which is instrumental in attracting long term investment, generating both economic returns and development impact.