November 25, 2020 – On November 25, the United Nations Development Program (UNDP) in Uzbekistan and the Capital Market Development Agency of the Republic of Uzbekistan, in cooperation with the Islamic Development Bank and the UNDP Istanbul International Center for Private Sector Development (IICPSD), organized an online workshop aimed at presenting and discussing the possibilities for introducing green sukuk as a new financial instrument in Uzbekistan. The event was attended by more than 90 representatives from Uzbek ministries and agencies, research institutions, commercial banks, the private sector and international financial institutions.
Green sukuk represents a type of sukuk that is used to finance environmentally sustainable projects, and as such has great potential for financing projects and initatives in the areas of renewable energy sources development, the introduction of energy efficient and resource-saving technologies, solid waste management and others. Over the past several months, the United Nations Development Program, as part of its joint initiative with the Capital Market Development Agency, has been supporting the Government of Uzbekistan in its efforts to explore the possibilities for introducing green sukuk as an avenue for raising additional funding for the Sustainable Development Goals (SDGs) and national development priorities in Uzbekistan. As part of this initiative, the IICPSD conducted a pre-feasibility assessment for the issuance of green sukuk in the country.
The workshop started off with an overview of the global green bonds and sukuk market, as well as the experience of the first green sukuk issuances in Malaysia and Indonesia. Southeast Asian experience is of great importance, as the region has become a leader in financing renewable energy projects through green sukuk. The IICPSD researchers and their partners involved in the preparation of the pre-feasibility study then presented the findings of their research, which in addition to a brief overview of the capital markets in Uzbekistan, included a discussion on potential opportunities and challenges to green sukuk introduction in Uzbekistan. It was suggested that the starting point is creating an appropriate regulatory framework for the issuance and introduction of green sukuk in the Uzbek capital markets. The IICPSD also presented a list of identified potential bankable projects in the area of agriculture, water management, energy sector with focus on renewable energy sources (wind, solar or hydropower), construction of energy efficient housing, etc.
The Capital Market Development Agency also presented the main provisions of the draft Resolution of the President of the Republic of Uzbekistan on measures to introduce securities based on the principles of Islamic finance, which was recently submitted for wide discussion. Based on the outcomes of the workshop discussions, the practical recommendations were proposed on the next steps towards further promoting and successfully launching the green sukuk initiative in Uzbekistan.
For more information on GIFIIP and IICPSD visit the following website:http://www.iicpsd.undp.org/