The Role of the Private Sector and Privatization in the “Uzbekistan – 2030” Strategy

Since the beginning of economic reforms in 2017, the Republic of Uzbekistan has entered an active phase of transformation aimed at building an open and liberal market economy. One of the central directions of this transformation has been privatization and the expansion of the private sector’s role, viewed as key factors in ensuring sustainable economic growth and investment attractiveness.

By 2030, the private sector is expected to become the main driver of growth, contributing up to 85% of the country’s GDP. This shift reflects the state’s strategic focus on creating efficient market institutions, promoting entrepreneurship, and developing an innovation-based economy.

1. State Policy on the Private Sector

1.1. Business Development Reforms

Within the framework of reforms for 2017–2025, large-scale liberalization of trade and the currency regime has been carried out, creating conditions for free capital movement and attracting foreign investment.

Key measures include:

• Reduction of taxes (VAT from 20% to 12%, profit tax to 15%);
• Introduction of a “One Stop Shop” mechanism for businesses;
• Simplification of business registration (down to 1 working day);
• Elimination of more than 500 state regulatory functions.

The establishment of the Foreign Investors Council under the President provided an institutional platform for continuous dialogue between business and the state.

1.2. Public–Private Partnership (PPP)

The Law “On Public–Private Partnership” (2019) established legal mechanisms for the joint implementation of infrastructure, energy, and social projects. By 2024, more than 130 PPP projects with a total value exceeding USD 8 billion have been registered, including those in healthcare, energy, and logistics.

2. Privatization as a Tool for Economic Modernization

2.1. Stages of Privatization

The privatization process in Uzbekistan proceeds in stages:

1. Inventory and restructuring of state-owned enterprises (2019–2021);
2. Transition to open sales via the stock exchange and international auctions (2022–2025);
3. Listing of large companies on foreign stock exchanges (after 2025).

A key instrument has been the Uzbekistan National Investment Fund (UzNIF), which manages shares in strategic companies and banks. The fund’s goal is to increase asset market value and attract strategic investors.

2.2. Privatization of Banks and Strategic Sectors

In the energy and banking sectors, privatization aims to improve management efficiency and ensure access for private capital. In 2024, the sale of stakes in Asaka Bank, SQB, Aloqabank, and others—previously fully state-owned—was launched. In the oil and gas industry, partial privatization of Uzbekneftegaz is being considered to enhance transparency and increase the sector’s export potential.

3. Economic Results and Investment Effects

3.1. Growth of Investment and Role of Private Capital

According to expert forecasts, total investment in Uzbekistan’s economy will reach USD 250 billion by 2030, with private investment accounting for at least 70%. The most active sectors include:

• Energy (including renewable sources);
• Industry and construction materials production;
• Digital technologies;
• Transport and logistics.

3.2. Impact on Employment and Income

The growth of private entrepreneurship contributes to increased employment and rising real incomes. By 2030, real incomes are expected to grow by 6% annually, while unemployment will fall below 6% due to the expansion of private enterprises.

4. Privatization and the “Uzbekistan – 2030” Strategy

The “Uzbekistan – 2030” Strategy consolidates the course toward further market transformation, including:

• Reducing the state’s share in the economy to 15–20%;
• Privatizing key industries (energy, transport, communications);
• Developing an innovative private sector;
• Enhancing corporate governance efficiency;
• Promoting ESG principles and sustainable growth.

Privatization is viewed not only as an economic measure but also as a socio-economic transformation that fosters a new business culture based on responsibility, transparency, and innovation.

The role of the private sector and privatization in the “Uzbekistan – 2030” strategy is systemic. Shifting away from state dominance toward market mechanisms and entrepreneurial initiative transforms Uzbekistan into an attractive jurisdiction for investors, ensuring sustainable growth and modernization. The comprehensive implementation of the privatization program and support for small and medium-sized enterprises lay the foundation for a new economic development model based on innovation, competitive freedom, and social partnership.

Privatization Plan by Economic Sector (2020–2025)

№	Economic Sector	Major Privatization Targets	Number of Enterprises	Expected / Attracted Investments (USD bn)	Key Investors / Partners	Expected Outcomes
1	Banking Sector	Asaka Bank, SQB, Ipoteka Bank, Aloqabank, Turonbank	6	3.5	EBRD, IFC, UzNIF, private investors from UAE and Singapore	Increased efficiency; introduction of corporate governance; IPOs on international exchanges
2	Energy	Uzenergo, Uzbekneftegaz (partial), Hududgazta’minot, Talimarjan Power Plant	8	6.0	ACWA Power, TAQA, Mubadala, TotalEnergies, Masdar	Growth in renewable energy investments; reduced state subsidies; increased sector transparency
3	Industry	UzAuto Motors, Uzmetkombinat, Almalyk MMC (partial), UzKimyoSanoat, Uztextilprom	12	4.2	Indorama (Singapore), CNPC (China), Korea Zinc, Rieter AG, Youngone Corp	Industrial modernization; export growth; ESG standards integration
4	Transport and Logistics	Uzbekistan Railways, Uzbekistan Airways, airports of Tashkent, Samarkand, Urgench	7	2.8	ADQ (UAE), Lufthansa Consulting, Changi Airports Int’l, Korea Airports Corp.	Management optimization; development of logistics corridors; growth in transit potential
5	Communications & Digital Infrastructure	Ucell, Uztelecom, IT Park (partial stake)	5	1.2	Beeline (VEON), Huawei, Ooredoo	Digitalization of public services; market competitiveness enhancement
6	Agro-Industrial Sector	UzAgroHolding, cotton and grain clusters	10	0.9	IFC, ADB, Indorama Agro	Increased agricultural efficiency; implementation of sustainable practices
7	Construction & Real Estate	State construction holdings, Uzqurilishmateriallari	6	0.7	Turkish Yapi Merkezi, UAE Emaar	Development of private real estate and building materials industries
8	Water Supply & Utilities	HududSuvTaminot, ToshkentSuvTaminot	4	0.5	ADB, EBRD, Veolia (France)	Investment in network modernization and water loss reduction

 

Summary of Privatization by Sector (2020–2025)

Sector	Number of Enterprises	Share in Total Privatization (%)	Investment (USD bn)
Banking	6	20	3.5
Energy	8	35	6.0
Industry	12	25	4.2
Transport & Logistics	7	20	2.8
Total (4 sectors)	33	100	16.5

Key Analytical Findings

• Focus on Strategic Sectors: The largest share of privatization investments falls on energy (36%) and industry (25%), where large-scale technological and structural reforms are required.
• Financial Transformation: The banking sector is shifting from state-owned to private-institutional models, prioritizing ESG lending and IPOs of major banks on the London and Tashkent Stock Exchanges.
• Transport Liberalization: The privatization of transport assets is linked to Uzbekistan’s goal of becoming a Central Asian logistics hub through the development of international transport corridors.
• General Outlook: By 2025, privatization volume is expected to exceed USD 16 billion, while the private sector’s share in GDP will reach 70%, aligning with the strategic goals of “Uzbekistan – 2030.”