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The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, has signed several agreements with Uzbekistan, amounting to US$ 715 million, on the sidelines of the Arab Coordination Group meeting, which was held from 4th to 5th March 2024 in Tashkent, Uzbekistan.
ITFC has been actively supporting the Government and local banks in Uzbekistan since 2018, with total financing approved for the country standing at US$773 million. This financing is geared towards supporting the production of cotton and wheat, ensuring food security, and helping stabilize prices for essential commodities, as well as supporting the trade finance needs of private sector and SME clients. In addition, ITFC will continue supporting local banks with technical assistance through new Integrated Trade Solutions in 2024 .
The collaboration also encompasses the “Trade Connect Central Asia+ (TCCA+)” Program, a flagship initiative developed by ITFC. The TCCA+ targets the expansion and economic integration of trade and investment cooperation among six countries: Azerbaijan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.
The first agreement is a Framework Agreement on cooperation for the period of 2024 – 2026, amounting to US$600 million. This agreement was signed by H.E. Mr. Laziz Kudratov, Minister of Investment, Industry and Trade and IsDB Governor of Uzbekistan, and Eng. Hani Salem Sonbol, CEO of ITFC. The agreement aims to strengthen areas of cooperation between ITFC and Uzbekistan, focusing on trade finance, agricultural and food security financing for the public sector, support for state-owned enterprises, and financing for small and medium enterprises in sectors like pharmaceuticals, food and agriculture, textile, and manufacturing.
The second agreement is a US$100 million Murabaha Financing Agreement signed by Mr. Ilkhom Norkulov, First Deputy Minister of Economy and Finance, and Eng. Hani Salem Sonbol, CEO of ITFC. This financing agreement aims to contribute to food security and agriculture in Uzbekistan, through procurement of strategic agricultural goods, to ensure a stable supply of wheat throughout the year. This initiative helps to stabilize wheat prices and support local farmers.
Additionally, ITFC signed a Line of Trade Financing Agreement jointly with AgroBank and its subsidiary SmartBank, amounting to US$15 million. This agreement will support SMEs and the private sector in Uzbekistan, boosting private sector contributions to the country’s economic development. The line of financing will provide Sharia-compliant trade finance solutions to private sector and SME clients of AgroBank and its subsidiary SmartBank. This financing will be focusing on sectors like food and agriculture, manufacturing, and textile, and will aim to promote financing of green projects.
Commenting on the signings, Eng. Hani Salem Sonbol, CEO of ITFC said: “The agreements signed today strengthen our collaboration with Uzbekistan and are a testimony of our commitment to the socio-economic development in Uzbekistan and the Central Asia region at large. We believe the projects and programs that will benefit from the approved financing will positively contribute to national economic growth. We are pleased to be covering key sectors such as food security and the private sector which align with our focus on contributing to the achievement of the Sustainable Development Goals especially SDG 2 (Zero Hunger) and SDG 8 (Decent Work & Economic Growth).
With a focus on key sectors such as trade finance, agriculture, and SME development, these agreements are meant to stimulate growth, ensure food security, support SMEs, and create sustainable economic opportunities. ITFC remains dedicated to driving positive change in Uzbekistan and the region, leveraging its expertise and resources to foster prosperity and resilience.
