Tashkent, the challenges and hardships unleashed by the COVID-19 pandemic has made access to concessional finance through Public Private Partnerships (PPPs) even more important for countries such as Uzbekistan.
This is particularly so in developing the healthcare, transport, and renewable energy sectors maintained HE Mr Shukhrat Vafaev, Deputy Minister of Investments and Foreign Trade in his keynote address at the High-Level Panel Discussion on “The Role of ICIEC to Attract PPP Investments in the Post-COVID19 Era” held yesterday in Tashkent during the 46th Annual Meetings of the IsDB Annual Meetings. ICIEC organized this timely event in partnership with the Investment Promotion Agency of Uzbekistan.
With a growing population estimated to reach 40 million by 2025, Uzbekistan will see a growing demand for social and development infrastructure. “It is difficult for the government to finance all this,” added Mr Vafaev. “Instruments provided by ICIEC and MIGA are critical for raising financing for modernizing our infrastructure. Our private sector is actively seeking Shariah-compliant financing and insurance solutions for projects. There is great potential in Uzbekistan for ICIEC and other IFIs.”
The Government, he observed, is very encouraged by the interest shown by international companies to tender and participate in Uzbekistan’s PPP strategy for renewable energy especially solar power plants. “We are keen for similar participation in the transport sector especially the road infrastructure. We are a landlocked country and depend on out road network. We are currently promoting two PPP projects, including the Tashkent-Samarkand Toll Road Project plus projects in healthcare provision. I believe all these projects would not be possible without the support from our international development partners including the IsDB Group and ICIEC.”
Tashkent’s strategy encompasses a private sector enabling strategy which includes a funding mix comprising PPP, Green Finance, Project Finance etc. It is keen to diversify its sources of funding options which help investors to de-risk their investments. Institutions such as ICIEC, stressed Mr Vafaev, can play a vital role in instilling trust and confidence amongst the private sector with a relatively small investment in relation to the overall size of the project. Not only in Uzbekistan but the wider Central Asia region.
Mr Oussama Kaissi, CEO of ICIEC, in his opening remarks, reminded that when well-designed and implemented in a balanced regulatory environment to avoid unnecessary fiscal risks, PPPs can bring greater efficiency and sustainability to the provision of public services, thus allowing to free-up scarce public resources for other purposes.
A burgeoning private sector and investment in infrastructure can lead to the recovery from the COVID-19 pandemic for economic transformation, job creation, and inclusive growth. Like many other sectors, infrastructure was brought to a near standstill by Covid-19. “ICIEC,” stressed Mr Kaissi, “has risen to the challenge by responding swiftly to the pandemic by forging strategic partnerships, ensuring the continuance of critical trade flows, and creating innovative de-risking solutions to help mitigate fallout in Member Countries. Political risk insurance and credit enhancement have a track record of effectively de-risking and thus catalyzing private investment into emerging markets through capital-efficient instruments.”
Cumulatively, over 27 years, ICIEC has insured US$78 billion in trade and investment, with the latter accounting for US$15.6 billion in various ICIEC member countries. ICIEC contributed US$643 million in insurance coverage towards the implementation of the IsDB Group’s US$2.3 billion Covid mitigation Strategic Preparedness and Response Program (SPRP), guided by the 3 Rs (Respond, Restore, Restart) ethos. ICIEC and IsDB jointly also launched the US$2 billion COVID-19 Guarantee Facility (CoGF), which is specifically aimed at supporting the private sector, in particular, COVID hit industries in member countries and to attract cross-border investments.
“We are encouraged by the Government of Uzbekistan’s stated intention to use PPPs to channel increasing levels of private investment towards infrastructure investments in various sectors,” observed Mr Kaissi. “I would like to reiterate that ICIEC is keen to leverage its unique position as the leading Shariah-compliant ECA in the world and its prominent partnerships with MIGA and ECAs by providing credit and investment de-risking solutions to effect development impact through improving the lives of citizens in Member Countries, to promote inclusiveness and connectivity among them and to improve access to Islamic finance.”
About ICIEC The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is a member of the Islamic Development Bank (IsDB) Group, effectively its export credit and investment insurance agency, gurantees provider and reinsurance. ICIEC was established in 1994 as a multilateral institution to strengthen the economic relations between member countries of the OIC. ICIEC’s vision is to be recognized as the preferred enabler of trade and investment for sustainable economic development in Member Countries. Its mission is to facilitate trade and investment between member countries and the world by providing Shariah-compliant risk mitigation tools and financial solutions.
