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EBRD Approves $50 Million Loan to Support Young Entrepreneurs in Uzbekistan

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The European Bank for Reconstruction and Development (EBRD) has approved financing of up to $50 million for Uzbekistan’s O’zsanoatqurilishbank (SQB) to expand lending to young entrepreneurs, as many small businesses continue to face challenges in obtaining bank financing despite playing a major role in the country’s economy.

The funding is being provided under the EBRD’s Youth in Business programme for Central Asia and will support micro, small and medium-sized enterprises owned or led by entrepreneurs under the age of 35.

The initiative comes as Uzbekistan’s young population continues to grow. Official figures show the country had 9.63 million people aged between 14 and 30 at the beginning of 2025, representing 25.7% of the total population.

The loan is one of two EBRD operations in Uzbekistan’s financial sector worth up to $100 million. Alongside the SQB financing, the bank is providing an additional loan of up to $50 million to the Mortgage Refinancing Company of Uzbekistan to support the country’s residential mortgage market and promote more consistent lending practices.

Small businesses remain a key driver of Uzbekistan’s economy. According to the National Statistics Committee, they accounted for 51.5% of the country’s gross domestic product during the first nine months of 2025. More than 1.2 million small business entities were operating across the country as of October 1, 2025.

Despite strong economic activity, access to finance remains a significant obstacle for many entrepreneurs.

Francis Malige, Managing Director and Head of the Financial Institutions Business Group at the EBRD, said the issue is not a shortage of available capital but ensuring that financing reaches smaller businesses.

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“Liquidity is certainly abundant,” Malige said. “What we see is that a lot of it goes to sovereign lending, to state borrowing, but not necessarily to financing the real economy.”

He noted that many small businesses struggle to meet banks’ lending requirements because they often lack detailed financial records, formal business planning and sufficient operating history. According to Malige, banks assessing smaller firms must also consider the experience of founders, the quality of management and the strength of business plans rather than relying solely on traditional lending criteria.

Collateral remains another major challenge. Many young entrepreneurs and first-time business owners do not own property or other fixed assets that banks typically require as security for loans.

To address those barriers, the EBRD provides technical assistance, training and risk-sharing mechanisms that encourage financial institutions to lend to businesses with limited collateral.

The financing programme also aims to improve opportunities for women entrepreneurs. Ceren Güven Güres, Head of the UN Women Central Asia Liaison Office, said Uzbekistan has introduced important reforms supporting women’s economic participation, but many continue to face obstacles beyond access to credit.

She said awareness of available programmes, social expectations, gender stereotypes and family care responsibilities continue to affect women’s ability to establish and grow businesses. Güres added that entrepreneurs benefit not only from financing but also from mentoring, training and ongoing business support as their companies expand.

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Uzbekistan Targets $5 Billion in IT and AI Exports by 2030 to Drive Digital Economy Growth

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June 30, 2026

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Government officials say the strategy focuses on moving beyond traditional outsourcing by attracting investment in higher-value digital services, supported by a young workforce, expanding internet access and investments in technology infrastructure.

According to Digital Technologies Minister Sherzod Shermatov, Uzbekistan’s annual IT exports have increased from less than $1 million in 2017 to nearly $1 billion, reflecting rapid growth in the sector. He said the next stage of development will depend on strengthening technical skills, encouraging investment and expanding the use of AI across businesses and public institutions.

Speaking during the Tashkent International Investment Forum, Shermatov said Uzbekistan aims to become a regional hub for companies seeking skilled talent, multilingual service teams and delivery centres capable of serving international markets.

The country’s digital ambitions are supported by favorable demographics. Official figures show Uzbekistan had around 9.6 million people aged between 14 and 30 at the beginning of 2025, while internet penetration reached 89 percent by the end of the year. Authorities view this as a strong foundation for developing a skilled workforce capable of supporting future growth in AI and digital services.

Data from the National Statistics Committee showed that companies operating within IT Park generated $191.8 million in service exports during the first quarter of 2026. The government hopes to build on this momentum by attracting both established technology firms and startups looking to expand internationally.

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Officials are also promoting investments in AI-related infrastructure, particularly data centres. Shermatov said growing demand for artificial intelligence requires substantial computing power, making reliable energy supplies essential. Rather than exporting electricity as a raw commodity, Uzbekistan plans to use its energy resources to support data centres that provide cloud computing and AI services for international clients.

To attract investors, the government is offering incentives including reduced electricity costs, tax exemptions, IT Park residency and duty-free imports of AI equipment.

Industry experts believe Uzbekistan’s opportunity lies in developing AI applications rather than competing directly with global leaders in building advanced AI models. Benedict Macon-Cooney, Chief AI and Innovation Officer at the Tony Blair Institute for Global Change, said countries such as Uzbekistan can benefit by connecting skilled workers, businesses and digital infrastructure to create services for global markets.

Alongside infrastructure development, Uzbekistan has launched its “5 Million AI Leaders” programme to improve artificial intelligence literacy. More than one million people have already completed the initiative, which targets students, teachers, government employees and workers across multiple industries.

Experts also stressed that wider AI adoption will depend on strong cybersecurity, reliable data systems and public trust. They said AI could improve government services through more efficient tax administration, compliance checks, fraud detection and public service delivery, while helping businesses increase productivity and competitiveness in international markets.

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Europe’s June Heatwave Pushes Up Electricity Demand and Power Prices Across the Continent

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June 30, 2026

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Europe’s record-breaking June heatwave has sharply increased electricity demand and driven wholesale power prices higher across the continent, highlighting the growing strain that rising temperatures are placing on energy systems as demand for cooling continues to grow.

Extreme temperatures across several European countries have led households, businesses and offices to rely more heavily on air conditioning and other cooling systems, increasing electricity consumption at a time when some sources of power generation have been constrained.

Although air conditioning remains less common in Europe than in many other regions, its use has been expanding steadily. According to the International Energy Agency (IEA), around 20 percent of European households now have air conditioning, and ownership has risen by about 50 percent over the past decade. Annual sales have also increased by roughly 30 percent over the last five years.

The latest heatwave saw temperatures reach record levels across the continent. Germany recorded 41.7 degrees Celsius in the eastern town of Coschen on June 28, while France experienced its hottest June day on record, with temperatures climbing to 43.8 degrees Celsius in Palluau. Spain also registered record June temperatures during the same period.

Data from Eurelectric showed electricity demand rose significantly across the European Union’s four largest economies as temperatures climbed. In Germany, daily electricity consumption increased from 1,267 gigawatt-hours on June 11 to 1,396 gigawatt-hours on June 25. France recorded an even larger increase, with demand rising from 1,048 gigawatt-hours to 1,255 gigawatt-hours over the same period. Italy and Spain also reported noticeable increases.

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France experienced the largest rise, with electricity demand climbing by nearly 20 percent within two weeks. French grid operator RTE said electricity consumption typically increases by between 0.7 and 1 gigawatt for every one-degree Celsius rise in temperature during heatwaves.

The surge in demand was reflected in wholesale electricity markets. According to Eurelectric, wholesale electricity prices climbed sharply in Germany, France and Spain, reaching their highest levels between June 23 and 24 as temperatures peaked.

Germany recorded wholesale electricity prices exceeding €200 per megawatt-hour, while prices in France approached €160 per megawatt-hour. Spain also saw prices rise above €110 per megawatt-hour.

Supply constraints added to the pressure. Wind power generation in Germany declined during the hottest days, increasing reliance on more expensive gas and coal-fired generation. In France, state-owned utility EDF reduced nuclear output by 4.1 gigawatts after river water temperatures became too high to safely cool several reactors.

Eurostat data shows household energy use for cooling has roughly doubled across the European Union since 2015, although cooling still accounts for only 0.8 percent of the bloc’s final energy consumption.

IEA energy efficiency policy analyst Fabian Voswinkel said Europe’s electricity systems are capable of managing higher cooling demand, provided investments continue in energy-efficient cooling technologies, flexible electricity networks and renewable power generation. He added that solar energy is expected to play an increasingly important role because peak cooling demand generally coincides with peak solar electricity production during daylight hours.

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Uzbekistan’s Record IPO Sparks Investor Interest as Focus Shifts to Capital Market Reforms

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June 27, 2026

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Uzbekistan’s largest-ever public market offering has drawn strong international investor interest and highlighted the country’s progress in economic reform, while attention is increasingly turning to the next phase of strengthening its financial markets through improved governance, liquidity and regulatory reforms.

The listing of the National Investment Fund of Uzbekistan, managed by Franklin Templeton, raised more capital than all previous initial public offerings (IPOs) in the country’s three-decade history combined, according to Marius Dan, Central Asia Chief Executive at Templeton Global Investments.

The landmark transaction is being viewed as a significant milestone for Uzbekistan’s financial sector, demonstrating growing confidence among global investors. Industry leaders, however, say sustained growth will depend on building stronger institutions and creating a more mature investment environment.

Julia Hoggett, Chief Executive of the London Stock Exchange, said investors first assess a country’s economic fundamentals, including inflation, currency stability, growth prospects and demographic trends, before examining its regulatory framework.

“What investors really want to know is that they’ll put their money in and that they will get their money back,” Hoggett said.

Uzbekistan is now preparing a series of financial reforms aimed at expanding investment opportunities and attracting additional international capital.

Investment, Industry and Trade Minister Laziz Kudratov said legislation establishing the Tashkent International Financial Centre is expected to be signed soon. The proposed financial hub will operate under common law principles, offering international financial institutions a legal framework aligned with global standards.

The government also plans to introduce legislation covering alternative investment vehicles, including venture capital, private equity and limited partner-general partner investment structures.

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Kudratov said the financial centre will provide long-term tax incentives lasting 50 years, including exemptions from corporate income tax, value-added tax, property tax and customs duties. He added that reforms introduced since 2017, including currency liberalisation, tax changes and the removal of restrictions on profit repatriation, have significantly improved the country’s investment climate.

“Any investor can come, invest and get their revenues out of the country within one day,” Kudratov said.

Dan noted that the National Investment Fund listing proved international investors are prepared to back Uzbekistan when investment opportunities are structured appropriately. He said continued listings of state-owned enterprises would be essential to deepen the country’s capital markets and broaden investment options.

He also pointed to growing interest in local debt markets from domestic retail investors, suggesting the financial sector is beginning to expand beyond reliance on foreign institutional capital.

Corporate governance remains another key priority. Dan said several companies within the National Investment Fund have already strengthened oversight by appointing independent directors to their boards.

Hoggett said successful public markets require companies to meet financial targets consistently while maintaining strong internal controls, transparent accounting and effective management systems.

Market participants believe Uzbekistan’s continued reforms will depend not only on attracting foreign investment but also on creating broader opportunities for domestic investors through deeper capital markets, stronger governance standards and greater market liquidity.

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