Uzbekistan has emerged as a dynamic destination for foreign direct investment (FDI), with its industrial and trade sectors leading the way. As the country continues to modernize and reform its economy, several key industries are driving the inflow of foreign capital, supported by investor-friendly policies and ambitious development programs.
Policy Framework Encouraging Investment
Uzbekistan’s Law on Investments and Investment Activities guarantees the unrestricted transfer of funds out of the country and protects investments from nationalization. To enhance public-private interactions, the Government of Uzbekistan (GOU) has created a multi-level communication platform. This includes the Foreign Investor’s Council under the President, the Ministry of Investments, Industry, and Trade (MIIT), regional deputy governors, diplomatic missions, and commercial banks.
By pursuing this policy, the GOU aims to strengthen the role of the private sector and attract more private and foreign direct investment to reduce the share of public financing in development projects. In 2023, the economy consumed over $30 billion in investment, of which 87% came from private or corporate sources and only 13% from public financing. This proactive policy framework has positioned Uzbekistan as a regional leader in attracting foreign capital.
Key Statistics on FDI Inflows
In 2023, Uzbekistan attracted $7.2 billion in FDI, primarily from:
- China: 25.6% of total FDI
- Russia: 13.4%
- Saudi Arabia: 7.9%
- Turkey: 6.4%
- UAE: 5.8%
- Germany: 4.3%
Major Achievements in 2024
Currently, Uzbekistan has an overall portfolio of investment projects with open financing amounting to $148 billion. Of this, $36 billion was utilized in 2024, which is 1.3 times more than the previous year. Moreover, over 240 large and medium-sized projects involving foreign investments were commissioned in 2024.
For example, in the energy sector alone, 24 projects worth over $7 billion were commissioned. Specifically, in the Bukhara, Navoi, Namangan, and Tashkent regions, five solar and wind power plants with a total capacity of about 2,300 megawatts, as well as five high-voltage substations, were connected to the grid.
In the metallurgy sector, three projects worth $881 million were launched; in the chemical sector, 15 projects worth $267 million; and in the textile industry, 32 projects worth $546 million. These developments highlight Uzbekistan’s diverse industrial growth.
Vision for 2030: Uzbekistan’s Economic Goals
President Shavkat Mirziyoyev has set ambitious targets for Uzbekistan’s economy, aiming to reach a GDP of $200 billion by 2030, provided the country continues its reforms and maintains effective governance. During a speech in the Legislative Chamber of the Oliy Majlis on November 20, 2024, he outlined key government tasks for the next five years:
- Maintaining an annual economic growth rate of 6-7%.
- Achieving a sustainable reduction in inflation to 5-6%.
- Ensuring the budget deficit does not exceed 3% of government expenditures.
- Increasing export volumes to $45 billion, with a focus on joining the World Trade Organization (WTO) and raising the share of finished products in exports to 50%.
The President also highlighted the importance of combating the shadow economy, setting a goal to increase the share of cashless payments to 60% by 2025. These reforms and initiatives align with Uzbekistan’s National Development Strategy 2030, which aims to transition the country to an upper-middle-income status by the end of the decade.
Energy and Oil & Gas: The Pillars of Investment
The energy sector continues to attract substantial foreign capital, with investments directed toward renewable energy projects such as solar and wind farms, as well as traditional oil and gas ventures. The GOU’s ambitious plan to generate 25% of its energy from renewable sources by 2030 is a major driver of FDI in this sphere. Notable investors include companies from China, Saudi Arabia, and the UAE, which are contributing to large-scale projects aimed at modernizing the country’s energy infrastructure.
Industrialization: A Key Focus
Industrialization projects across Uzbekistan’s provinces are another significant recipient of foreign capital. These projects are designed to enhance local production capabilities, reduce dependency on imports, and foster economic diversification. With robust support from the MIIT, these initiatives are creating opportunities for investors in manufacturing, agribusiness, and infrastructure development.
Trade and Logistics
Uzbekistan’s strategic location as a landlocked country in Central Asia makes it a natural hub for trade and logistics. Investments in this sector are focused on modernizing transport infrastructure, improving cross-border trade efficiency, and developing industrial parks. These improvements aim to position Uzbekistan as a vital link in regional and global supply chains.
From Startup to Unicorn
Uzum, Uzbekistan’s leading fintech and e-commerce ecosystem, is preparing to raise $300 million in anticipation of a potential initial public offering (IPO).
Having doubled its size this year, the company aims to sustain its rapid growth into next year. To support this trajectory, Uzum plans to launch a Series B funding round, which will fuel its development and advance IPO preparations.
In 2024, Uzum successfully secured over $100 million during its Series A funding round, elevating its valuation to over $1 billion and earning it the distinction of being Uzbekistan’s first unicorn. Investors from the United States, the Gulf Cooperation Council (GCC), and other international markets participated in this milestone round.
The Series B funding is slated for the second quarter of 2025, with the goal of raising up to $300 million. This capital will support Uzum’s expansion and bolster its readiness for a public offering. The company is considering a dual listing on the UAE stock exchange and Nasdaq in the United States as potential IPO venues.
Conclusion
The spheres of industry and trade in Uzbekistan have proven to be the most attractive for foreign capital, driven by a combination of government reforms, strategic initiatives, and sectoral growth. With strong support from key international investors and ambitious domestic programs, Uzbekistan is poised to become a leading investment destination in Central Asia.
(Source: U.S. Department of State, TradingEconomics.com, and Uzbekistan Government Announcements)
By Navruzakhon Burieva
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