Prime Picks for a Green Pivot

Investment Rating - The report emphasizes the potential for state-owned financial institutions (SOFIs) and state-owned enterprises (SOEs) to drive green investments in Uzbekistan, suggesting a positive outlook for their role in climate action financing [14][15][26]. Core Insights - The Government of Uzbekistan is committed to a green economic transition, recalibrating investment policies and introducing incentives to spur climate investment, with a target of allocating 30% of state funding to green projects by 2026 [14][41]. - SOFIs and SOEs collectively hold significant financial power, with nine SOFIs providing 70% of all loans in the economy, and state investment funds expected to finance about 10% of GDP in 2024 [15][54]. - The report identifies three prime candidates for green financing: the Entrepreneurship Development Company (EDC), Business Development Bank (BDB), and Uzbekistan Mortgage Refinancing Company (UzMRC), each with specific strategies and goals for green investments [19][20][21]. Summary by Sections Executive Summary - Uzbekistan's government has initiated a green economic transition, aligning investment policies and introducing incentives for climate investment [14]. - SOFIs and SOEs are seen as crucial for mobilizing private sector investments by reducing market risks associated with green technologies [16][26]. Purpose and Approach - The study aims to identify SOFIs and SOEs that can effectively adopt climate change and environmental targets in their financing operations, with a focus on readiness to implement the National Green Economy Taxonomy (NGET) [40][41]. The Footprint of Public Finance - A long list of 26 state funds and 37 SOEs was compiled, with significant government spending projected for 2024, including UZS 99 trillion (7.7% of GDP) from state funds [54][55]. - SOEs are expected to play a vital role in enhancing infrastructure and promoting technological advancements, with a budget allocation of UZS 28.1 trillion (2.2% of GDP) for investments [55]. Priority Entities - EDC aims for 35% of its financing to be green by 2026, while BDB is developing a Sustainable Finance Framework and plans to join international green finance platforms [20][21]. - UzMRC is positioned to lead in green housing finance and is preparing to issue green bonds, contingent on the adoption of industry-wide standards for green buildings [22]. Recommendations - The Ministry of Economy and Finance (MEF) should leverage its shareholder rights to mandate green investment strategies across SOFIs and SOEs, ensuring alignment with national climate goals [17][25]. - A central coordination function for climate finance is recommended to streamline resources and optimize synergies between public incentives and private capital [16][17].