TASHKENT

Uzbekistan has announced the sale of two state-owned banks – Poytaxt Bank and UzAgroExportBank – through an open process, the State Assets Management Agency (UzSAMA) said.

The application process is open to all interested parties and bids until June 20.

In both sales bids will be held on the terms of maximising the value of the transaction, as well to further develop and increase the financial stability of the banks, UzSAMA said.

The agency said that the selling process would consist of four stages – expression of interest, pre-qualification selection, qualifying selection of commercial and financial proposals, and the conclusion of the transaction.

The Central Asian country is making efforts to improve its investment climate after more than two decades of economic isolation. The closed, autarkic system viewed most foreign investments as a threat. That ended when Islam Karimov, who had led Uzbekistan since before the Soviet breakup, died in 2016.

President Shavkat Mirziyoyev, who was once a prime minister under Karimov and then succeeded him, has made attracting foreign investors one of his top priorities in an increasingly ambitious plan to open Uzbekistan to the outside world.

Poytaxt Bank was founded as a joint-stock company by the government to support the construction of affordable multi-unit apartment buildings in the capital of Tashkent in 2017. Local inter-bank rating company Akhbor Rating assigned Poytaxt Bank a credit rating of uzB+ with a Stable outlook. Global advisory firm Deloitte was selected as the bank’s privatisation consultant.

UzAgroExportBank was established in 2017 to provide financial support to local export firms, to ensure effective and sustainable development of the export potential of fruit and vegetable products, to further create favourable conditions for producers of agro-industrial products. Grant Thornton, the international business advisor, will act as the bank’s privatisation consultant.

Mirziyoyev issued a decree in October 2020 ordering the full or partial privatisation of over 620 state-owned companies and properties. The list includes state companies in banking, energy, mining, chemical sectors, as well as Uzbekistan Airways.

As well as by offering its state assets for sale, Uzbekistan has sought to improve its investment climate and restore foreign investors’ trust by setting up a special legal panel for investment and competition issues.

The country’s reform drive has not gone unnoticed. The World Bank has rapidly scaled up a support to Uzbekistan, with 21 projects totalling around $3.5 billion – the second largest World Bank programme in the Europe and Central Asia region.  The European Bank for Reconstruction and Development (EBRD) re-engaged with Uzbekistan in September 2018 after a long hiatus, raising its portfolio to 1.8 billion euros.