Development finance assessment

Boosting private sector investments in infrastructure 
The private sector is well placed to contribute to development in areas that blend with 
private investment, such as infrastructure and clean energy. These investments deliver 
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A successful example would be the Afghanistan Reconstruction Trust Fund (ARTF) which was established in 2002 as 
a coordinated international response to a firm request from the Afghan government for a single source of untied aid.

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RECOMMENDATIONS
value for money, while limiting contingent fiscal risk, and can bring access to technological 
innovation, and increase delivery capacity. Addressing energy inefficiencies could accelerate 
the economy’s competitiveness and modernize its agricultural sector. Quick fixes would 
entail regulatory reforms to address the low, state-controlled energy prices (UNEP, 2015). 
The JP focuses on:
Diversifying available bonds to harness private investment for thematic priorities: 
The successful sovereign bond issuance revealed a strong appetite from institutional 
investors to invest in Uzbekistan. While the COVID-19 crisis may have led to a temporary 
weariness of emerging market debt, the GoU may consider issuing bonds that cater for 
specific financing needs. This recommendation is being operationalized through the JP. It will 
develop a roadmap for adopting several innovative financing mechanisms, including: 
 
„
Green bonds
with specific climate related or environmental objectives can finance 
Uzbekistan’s Strategy for a green transition. “Green bonds” are instruments that tie the 
proceeds of a bond issue explicitly to environmentally-friendly investments. These may 
be relevant financing instruments for clean transportation, energy efficiency, sustainable 
energy investments, waste management and climate change adaptation. Uzbekistan is 
eyeing to issue its first set of green bonds packaged as 
Sukuk bonds
, with support of the 
IsDB and the UNDP.
„
Diaspora bonds (see below)
Mainstream the SDGs across the recently adopted PPP framework.
Considering their PPP setup is still very recent and in the process of fine-tuning, this 
is a timely opportunity to consider mainstreaming the SDGs more explicitly across all 
phases of PPP development: identification, preparation, transaction and management. 
This can be achieved by, for example, including SDGs in PPP communications and wider 
PPP capacity building programs; putting SDGs in project eligibility/selection /prioritization 
criteria; considering gender and inclusiveness in the composition of PPP institutions; and 
incorporating sustainability considerations into procurement processes (through project 
specifications and award criteria). 
UNECE’s People-first PPP concept
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promotes such an SDG-aligned approach. They 
developed a set of Guiding Principles
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to help governments implement the People-first 
PPP for the SDGs. A critical pillar of the People-first PPPs is its zero-tolerance for corruption. 
The OECD (2019) recommends strengthening the role played by civil society and non-
governmental organizations in monitoring infrastructure projects and the transparent 
execution of their public procurement processes. Strengthening transparency and public 
scrutiny is essential to monitor whether PPPs deliver on their promise of value for money 
including the broader welfare benefits for society, such as the impact on poverty and 
sustainable development.
Adopt innovative financing instruments to crowd-in private investments into risky projects. 
Innovative risk-sharing tools, such as credit guarantee schemes, can enhance access to 
finance to firms lacking collateral. Guarantees for development
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, particularly those issued 
by MDBs, can provide the assurance that investors need to back long-term infrastructure 
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People-first PPPs can deliver a pipeline of projects that: i) Improve access and equity to infrastructure and public 
services ii) Are economically effective iii) Invest in resilience and climate change iv) Are replicable v) Ensure large 
stakeholder engagement (UNECE; 2018).
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https://www.unece.org/fileadmin/DAM/ceci/ppp/Standards/ECE_CECI_2019_05-ru.pdf
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Guarantees are a type of innovative financing instrument that protects governments, banks or investors from the 
risk of non-payment or loss of value of an investment.

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DEVELOPMENT FINANCE ASSESSMENT FOR THE REPUBLIC OF UZBEKISTAN
investments and thus increase the chances of the project materializing. Using such guarantees 
could enable Uzbekistan access capital held by pension funds and insurers in the OECD and 
develop financial markets at the local level. For example, at a time of rapid urbanization where 
financing constraints create bottlenecks in public services and other urban infrastructure 
necessary for inclusive growth, guarantees can back municipal bonds and diversify the pool 
of assets for investors.