A resolution of the President of Uzbekistan “On measures to implement the project “Modernization of agriculture of the Republic of Uzbekistan” with the participation of the International Bank for Reconstruction and Development and the International Development Association was adopted.
To finance the project “Agricultural Modernization of the Republic of Uzbekistan” on 20 March 2020, the World Bank Board of Directors for a period of 30 years approved the allocation of:
a) the International Bank for Reconstruction and Development (IBRD) a loan of US$181 million, including a 10-year grace period;
b) International Development Association (IDA):
a loan of US$100 million, including a 10-year grace period;
soft loan of US$219 million with a 5-year grace period.
The total cost of the project is US$659.3 million, of which the share of Uzbekistan is equivalent to US$159.3 million, including:
in the form of granting tax and customs benefits, payment of financial expenses during the investment period – the equivalent of US$124.3 million;
share of the Project participants (beneficiaries) – equivalent to US$35 million.
The Project implementation period is 6 years (2020–2026).
The document defines the priority areas of financing within the framework of the Project:
creation in agriculture of an effective system of scientific research, education and consulting services, integrated with production;
introduction of reliable and transparent methods of digitalization of agriculture, accumulation, analysis and dissemination of statistical information;
ensuring the safety of food products and strengthening control over the quality of agricultural production on the basis of the principle “from the field to the consumer”, the creation of agricultural logistics, road and other necessary infrastructure;
stimulating exports, creating a favorable agribusiness climate and value chain in the production of competitive, export-oriented agricultural products with high added value for international markets;
diversification of agriculture and food industry, reduction of state participation in the sphere, development of a system of cooperation and increase of investment attractiveness of the industry;
rational use of land, water resources and forest resources;
introduction of modern management systems into the industry, improvement of service delivery.
The document approved:
feasibility study and main indicators of the Project;
scheme for the use of IBRD and IDA funds for the Project;
“Roadmap” for the implementation of the Project;
schedules for the use and repayment of the IBRD loan and IDA loans, payment of commissions and interest under the Project;
forecast indicators of export volumes of fruits and vegetables for 2021–2025 In the project’s boundaries;
the composition of the Working Group for the implementation of the Project.
The project is being implemented in all regions of the republic. Timely and full implementation, as well as its effectiveness is ensured by the Ministry of Agriculture. The executive body responsible for the timely and complete implementation, management of the Project, monitoring and reporting during the period of its implementation is the Agency for the Implementation of Projects in the Field of Agro-Industrial Complex and Food Supply.
According to the legislation, within the framework of ongoing projects at the expense of loans provided by international financial institutions and foreign government financial organizations:
the turnover for the sale of goods (services) purchased by legal entities, if these projects are approved by the said organizations before July 1, 2020, are not subject to VAT and excise tax;
goods imported into the customs territory by legal entities are exempted from customs duties at the expense of these borrowed funds;
legal entities – non-residents of Uzbekistan are exempt from income tax until 1 July 2021.
The funds saved as a result of these benefits are considered Uzbekistan’s contribution to the implementation of the Project.
The Council of Ministers of Karakalpakstan and regional khokimiyats should ensure to take measures for the implementation of activities within the framework of the Project, ensuring its effectiveness, as well as transparency and prevention of corruption in the process of using the funds raised;
Within the framework of the Project, in accordance with the established procedure, it is planned to allocate land plots to horticultural cooperatives, including large agricultural logistics complexes being built in the regions, for agricultural and forestry losses without charging compensation on the basis of the right to free use.
The costs of providing compensation to land users on allocated land plots (for losses incurred by farms, felled trees, resettlement of citizens, all losses incurred by citizens) and ensuring the connection of agricultural logistics complexes to engineering, road and transport infrastructure, as well as other expenses will be covered at the expense of funds of the local budgets and other sources not prohibited by law.
