Procedure for Implementation and Financing of Public-Private Partnership (PPP) Projects in Uzbekistan

The development of infrastructure and social services requires a comprehensive approach to attracting private capital. In Uzbekistan, the public-private partnership (PPP) mechanism continues to evolve. One of the most important steps in this direction was the adoption of Cabinet of Ministers Resolution No. 720 of October 30, 2024, which approved the regulation on the procedure for implementing PPP projects. This document establishes a detailed framework for interaction between public and private partners at all stages of project implementation.

Key Stages of PPP Project Implementation

1. Project Initiation

PPP projects may be initiated by government entities (public initiator) or private entities (private initiator). At this stage, a project concept and a feasibility document are prepared. If a project is initiated by a private party, its acceptance is only possible after preliminary qualification.

2. Concept Evaluation

The PPP project concept must include:

• calculation of project cost,
• proposed sources of financing,
• assessment of economic feasibility,
• risk allocation,
• anticipated obligations of the parties.

For projects exceeding $10 million, it is mandatory to involve international and/or local consultants.

3. Concept Approval

• Projects up to $1 million may be approved independently by the public partner.
• Projects from $1 million to $10 million are coordinated with the Ministry of Economy and Finance and approved by the public partner.
• Projects exceeding $10 million are approved by the Cabinet of Ministers based on agreement with the authorized body.

4. Selection of the Private Partner

The selection is carried out through:

• Open tender (single- or two-stage);
• Direct negotiations, if:
  • the project is related to defense and security,
  • the project requires the use of exclusive rights or a specific real estate asset,
  • the project is implemented under Presidential decrees or Cabinet resolutions.

If only one proposal is submitted for a private initiative within 45 days of its publication, direct negotiations may be initiated.

5. Conclusion and Registration of the Agreement

After determining the winner of the tender or completing direct negotiations, a PPP agreement is signed.

• Agreement duration: from 3 to 49 years, depending on the project’s characteristics and investments.
• Projects are registered in the unified PPP registry, after which information about the project is published on the website of the authorized body.

6. Allocation of Land and Property

For PPP project implementation, the state provides the necessary land plots and property on lease terms. In some cases, transfer of ownership or management rights may be envisaged.

7. Tariff Setting and Monitoring

Prices for goods and services under PPP projects may be regulated by the state or approved jointly with the private partner.
In case of significant changes in external conditions, tariffs may be revised.

The public partner and the authorized body carry out continuous monitoring of project execution.

Resolution No. 720 and the approved regulation create a clear regulatory framework for PPP development in Uzbekistan. They contribute to investment attraction, risk allocation, and improved quality of public services through private initiative. Implementation of these norms is an important step toward modernizing the country's infrastructure and achieving sustainable economic growth.

Financing of Public-Private Partnership Projects

To stimulate PPP project implementation, Cabinet of Ministers Resolution No. 720 of October 30, 2024, also approved the Regulation defining their financing procedure. Below are the key mechanisms, sources, and principles for budget fund allocation within PPP projects.

Main Forms of PPP Project Financing

According to the regulation, financing is provided through the following sources:

• Budget funds — direct financing from budgets at all levels.
• Subsidies — non-repayable state aid to private partners.
• Budget loans — repayable loans with zero or preferential interest rates.
• Credit lines — loans through commercial banks funded by treasury accounts.

Financing from Budget Funds

Projects whose concept is approved by the Cabinet of Ministers may be financed from the State Budget. Funds are allocated to the public partner through treasury accounts and then transferred to the private partner. Unused funds are returned to the budget and may be reallocated in the next fiscal year.

Subsidies for Private Partners

Subsidies are granted for:

• guaranteed minimum income,
• partial coverage of project expenses,
• financing works, services, construction, and asset modernization.

The procedure for obtaining a subsidy includes submitting an application, verification by the public partner, approval by economic and financial authorities, and subsequent transfer of funds. A refusal is possible if the project is not registered or the subsidy is not provided for in the agreement.

Budget Loans

Budget loans are:

• granted for up to 6 months — interest-free,
• for up to 3 years — at 2% per annum,
• require repayment and strict targeted use.

The loan is granted based on calculations confirming the need and sources of repayment. In case of delay, recovery measures are applied, including penalties.

Credit Lines

Financing through credit lines is carried out by allocating funds to commercial banks via a special treasury account. Banks provide loans to private partners for a period from 3 to 15 years at an interest rate not exceeding the Central Bank’s key rate + 2%.

Exceptions: loans are not granted for gambling, alcohol, tobacco, communication fees, purchase of private property, etc.

Control, Liability, and Reporting

The regulation introduces clear control mechanisms:

• public partners must submit quarterly reports on the use of funds,
• both public and private partners bear responsibility for the accuracy of reporting,
• misuse of funds is prohibited,
• control is carried out by authorized bodies in accordance with the law.

The adopted regulation creates a unified, transparent, and controlled mechanism for financing PPP projects in Uzbekistan. It ensures a balance between state and business interests, reduces investment risks, and strengthens state control over public resource spending. This approach promotes sustainable infrastructure development and attracts private investment into socially significant projects.