Public-Private Partnership in Uzbekistan

Publication date: 23.07.2025

Public-Private Partnership (PPP) is one of the key forms of interaction between the state and business aimed at solving socio-economic problems, modernizing infrastructure, and improving the quality of services. In the Republic of Uzbekistan, the legal framework for PPP is established by the Law "On Public-Private Partnership" dated May 10, 2019 (Law No. ZRU-537), which laid the foundation for a modern institutional and legal system in this area.

According to the law, PPP represents a legally formalized, fixed-term cooperation between a public partner and a private partner, based on the pooling of resources to implement projects aimed at solving economic, social, and infrastructure challenges.

Key concepts include:

PPP project – a set of activities involving private investment;
PPP object – property, infrastructure, land plots, works, and services created under the agreement;
Concession – a form of PPP in which the state transfers property or land plots to a private partner for conducting economic activities.

Principles of Public-Private Partnership

The law sets out the key principles of PPP:

Equality of the parties before the law;
Transparency of procedures;
Competitiveness and objectivity in partner selection;
Prohibition of discrimination and corruption.

State Regulation and Institutions

Several levels of state governance are involved in implementing PPP:

Cabinet of Ministers – develops a unified policy, approves projects worth over USD 10 million;
PPP Development Agency under the Ministry of Finance – the authorized body maintaining the project register, approving documentation, and coordinating stakeholders;
Local authorities (hokimiyats) – identify facilities for project implementation and allocate land plots.

Parties to the PPP Agreement and Their Rights

A PPP agreement is concluded between a public partner and a private partner. The state undertakes to provide conditions for project implementation, ensure support and supervision, while the private partner must fulfill contractual obligations and invest funds.

Project Initiation and Preparation

Projects may be initiated by either public or private initiators.

Public initiator develops a concept in line with the priority areas of the economy.
Private initiator has the right to propose innovative projects, which may be implemented through a tender or direct negotiations.

Project implementation includes concept development, approval by the authorized bodies, and registration.

Procedures for Selecting a Private Partner

The law provides for tender procedures (one-stage and two-stage), as well as the possibility of direct negotiations in cases of national security or exclusive rights. Selection is based on objective tender criteria: financial indicators, technical advantages, innovative nature of the project.

PPP Agreement

The agreement regulates in detail the rights and obligations of the parties, implementation timelines, risk allocation, tariffs, payment terms, dispute resolution procedures, and monitoring. The term of the agreement ranges from 3 to 49 years.

Support Mechanisms

To protect the interests of investors and lenders, the state provides:

Subsidies and revenue guarantees;
Tax incentives and preferences;
State loans and grants;
Legal stability guarantees;
Possibility to conclude state support agreements.

Significance of PPP for Uzbekistan

PPP has become an important tool for attracting investment into infrastructure and social projects. It contributes to:

Improving the quality of public services;
Developing transport, energy, and social infrastructure;
Creating conditions for innovative economic growth;
Attracting foreign investment.

Public Administration Bodies and Their Authorities in the Field of PPP

State Body	Main Powers in the Field of PPP	Legal Basis
Cabinet of Ministers of the Republic of Uzbekistan	- Develops unified state policy in the field of PPP; - Determines the public partner if not specified; - Adopts regulatory legal acts in PPP; - Approves projects worth over USD 10 million; - Establishes the procedure for maintaining the PPP Project Register; - Determines the amount of one-time payment by the tender winner or negotiation participant for concluding a PPP agreement.	Art. 11 of the Law on PPP
PPP Development Agency under the Ministry of Finance (Authorized Body)	- Implements PPP policy; - Develops methodological documents and model agreements; - Approves project agreements over USD 1 million; - Maintains the PPP project register; - Monitors project implementation; - Coordinates with investors and IFIs; - Evaluates project concepts and submits them to the Cabinet for approval (if over USD 10 million); - Ensures training and retraining of PPP specialists; - Engages consultants and negotiates with international organizations.	Art. 12 of the Law on PPP
Local Executive Authorities (Hokimiyats)	- Identify facilities that may be implemented as PPP projects; - Study and determine promising projects based on regional needs; - Identify and remove obstacles to implementation; - Ensure allocation of land plots for PPP projects to public partners (without auction).	Art. 121 of the Law on PPP
Public Partner (ministries, agencies, organizations)	- Concludes PPP agreements with private partners; - Prepares tender documentation; - Controls agreement performance; - Provides property and land plots for lease to private partners; - Assists in obtaining licenses and permits; - Submits copies of agreements to the authorized body; - Bears full responsibility for performance of obligations.	Arts. 13–14, 31 of the Law on PPP
Tender Commission	- Formed by the public partner in agreement with the Cabinet of Ministers; - Reviews and evaluates bids; - Determines the winner and reserve winner; - May declare the tender void and announce a re-tender; - Ensures objectivity and transparency of procedures.	Art. 24 of the Law on PPP
President of the Republic of Uzbekistan	- May make decisions on PPP projects, including pegging prices to foreign currency in exceptional cases; - Approves state support agreements; - Determines the procedure for transferring ownership of PPP objects.	Arts. 33, 38 of the Law on PPP
Ministry of Finance of the Republic of Uzbekistan	- Signs state support agreements on behalf of the Republic of Uzbekistan; - Approves all types of guarantees and support affecting the state budget; - Participates in tender commissions.	Art. 38 of the Law on PPP

Parties to the PPP Agreement, Their Rights and Obligations

Party	Rights	Obligations	Legal Basis
Public Partner (Republic of Uzbekistan, public authorities, local executive bodies, other legal entities authorized by the Cabinet)	- Request reports from the private partner on project implementation; - Monitor compliance and evaluate results; - Demand elimination of violations and compensation for damages; - Engage consultants to prepare PPP projects.	- Comply with legislation and the agreement; - Provide tender documentation and clarifications to participants; - Ensure conditions for familiarization with the project object; - Transfer property for project activities; - Assist in obtaining licenses and permits; - Submit copies of agreements to the authorized body; - Not restrict the private partner's rights to manage investments and income; - Not interfere with business operations of the private partner; - Bear liability for breach of obligations.	Arts. 13–14 of the Law on PPP
Private Partner (individual entrepreneurs, legal entities of Uzbekistan or foreign states that have signed an agreement with the public partner)	- Receive necessary information from the public partner; - Propose changes to the agreement terms; - Demand compensation for damages caused by the public partner.	- Comply with legislation and the agreement; - Bear liability for breach of obligations; - Not transfer lease rights to third parties (except as provided by law).	Arts. 13–14, 35 of the Law on PPP
Special Project Company (SPC) – legal entity established by the tender winner, reserve winner, or private initiator	- Implements the PPP project on behalf of the private partner; - May delegate functions to contractors and subcontractors.	- Ensure project implementation in accordance with the agreement; - Comply with legislation and the agreement.	Arts. 3, 13 of the Law on PPP
Delegated Organizations (on the side of the public partner)	- May act on behalf of the public partner and undertake obligations within the agreement.	- Bear full responsibility to the public partner for fulfillment of obligations.	Art. 13 of the Law on PPP
Engaged Organizations (on the side of the private partner)	- May perform certain obligations under the agreement (contractors, subcontractors, suppliers).	- The private partner remains fully responsible for performance.	Art. 13 of the Law on PPP

Important:

Public and private partners are equal parties to the agreement (Art. 5 of the Law).
Both parties bear financial liability for improper performance of obligations (Art. 32 of the Law).
Disputes are resolved in court or in the manner provided by the agreement (Art. 40 of the Law).