DIPLOMATIC ECONOMY

EBRD Increases Trade Support In Uzbekistan

…With New Limit For NBU

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By Anton Usov

More businesses in Uzbekistan, including small and medium-sized enterprises (SMEs), will benefit from export and import opportunities available through a trade finance agreement signed between the EBRD and the country’s leading lender, the National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU).

The funds are part of the EBRD’s response to the Coronavirus pandemic and its economic impact. Part of the package is an increase in trade finance which in Uzbekistan alone has now reached US$ 220 million. It will help mitigate the disruptions that severe market conditions have caused in trade and supply chains.

An additional trade limit of up to US$70 million to NBU under the EBRD’s Trade Facilitation Programme (TFP) will help domestic exporters and importers continue their business activities. It follows a package of up to US$150 million made available to Asaka Bank, Ipoteka Bank and UzPromstroybank under the EBRD’s TFP earlier this month.

NBU operates 93 branches across Uzbekistan. The bank is well-placed to provide much-needed support to Uzbek businesses to enable them to better manage commodity stocks and plan for longer trade cycles.

Despite a decline of exports and imports in Uzbekistan in the first quarter of 2020 by around 3 per cent, trade remains an important factor in the national economy: In 2019 alone the country’s trade turnover was around US$43billion.

The EBRD Board of Directors in late April approved the increase of its Resilience Framework to €4 billion. The resources are available to the Bank’s existing clients in order to support their urgent liquidity, short-term working capital and trade finance needs. The latter is particularly important in circumstances when the availability of commercial trade finance credit lines is likely to remain constrained.

TFP promotes international trade to, from, and within the Bank’s countries of operations, including Uzbekistan. The EBRD is currently working with seven Uzbek financial intermediaries, which collectively have trade finance limits worth US$ 340 million.

In addition the EBRD also offers access to compliance and advances trade finance skills: over 500 local bankers from commercial banks and the Central Bank of Uzbekistan have received professional specialised training since 2017.

The EBRD’s e-Learning programme scholarships for trade finance are one of the largest among IFIs. They were extended to staff of local banks that are currently at home but don’t have access to the bank’s systems.

The EBRD has also created an online knowledge sharing platform, where professionals from Armenia, Georgia and Ireland help Uzbek bankers to discuss cases in trade finance.

To date, the EBRD has invested €1.85 billion through 79 projects in Uzbekistan’s economy.

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