Tashkent, Uzbekistan, 2 September 2021 – The Islamic Development Bank (IsDB) and the Government of Uzbekistan have announced the launch of Uzbekistan’s first dedicated impact investment fund, with an initial capital of $100 million.

The fund is part of a range of new funding commitments made by the IsDB Group during the 2021 Annual Meetings underway in the capital city of Tashkent.

IsDB Group has expanded funding commitments as part of its effort to support the post-pandemic economic recovery among its member countries.

The agreement between IsDB and the Government of Uzbekistan for the fund, known as the Economic Empowerment Fund for Uzbekistan (EEFU), was signed by IsDB Group President H.E. Dr. Muhammad Al Jasser and Uzbekistan’s Deputy Prime Minister and Minister of Investments Sardor Umurzakov.

"We strongly believe that the new fund will be a unique funding platform for new projects and initiatives. This experience will be transferable to other countries in the region and the Muslim world," said Al Jasser.

The new fund builds on a strong record of cooperation between IsDB and Uzbekistan. To date, IsDB Group has provided $2.4 billion in project financing and development funding in Uzbekistan, supporting 101 projects. In 2019, President Shavkat Mirziyoyev issued an executive order creating the framework for expanded cooperation between Uzbekistan and IsDB.

"I consider this as a historic event in Uzbekistan's efforts to reduce poverty. One of the top priorities of our economic policy is to support women and youth, especially in the countryside, to invest in innovative projects and youth start-ups. We have a clear plan on how to support businesses from the birth of an idea to successful implementation, through financial and non-financial support," said Umurzakov.

In a speech marking the 30^th anniversary of Uzbekistan’s independence, and delivered during the annual meetings, President Mirziyoyev hailed cooperation with IsDB as evidence of the success of the country’s reform agenda and as a sign that Uzbekistan was ready to contribute to the development of the wider Islamic world.

The initial capital for EEFU will be provided by the Government of Uzbekistan (35%), IsDB (20%) and private sector investors from Saudi Arabia (45%). The backers expect the fund’s overall size to gradually increase to $500 million.

EEFU will complement the efforts of the Government of Uzbekistan in the areas of job creation and poverty alleviation. By providing financing to a targeted 34,000 micro, small and medium-sized enterprises, social entrepreneurs, and cooperatives, EEFU will aim to create over 100,000 new jobs in Uzbekistan. At least 50 percent of benefiting entities will be Women and Youth-led enterprises.

As part of the signing ceremony, H.E. Khalid Al-Falih, Minister of Investment of the Kingdom of Saudi Arabia, spoke via video message.

"Research confirms that it is small and medium-sized enterprises (SMEs) that collectively make a significant contribution to a country's economic development. Studies show that in high-income countries, SMEs account for up to 55% of a country's GDP, providing 65% of employment. This figure is even higher in lower income countries,” the minister said.

I am confident that the creation of the fund will fundamentally change the lives of hundreds of thousands of people across Uzbekistan," he added.

Financing will be provided through multiple channels, including credit lines, Murabaha finance, and equity participation. Technical assistance will also be provided to address non-financial constraints for beneficiaries by providing management training, market access guidance, and facilitating partnerships.