IsDB, Uzbekistan launch $100m impact investment fund
The Islamic Development Bank and the Government of Uzbekistan have announced the launch of Uzbekistan’s first dedicated impact investment fund, with initial capital of $100 million.
The fund is part of a range of new funding commitments made by the Islamic Development Bank Group during the 2021 Annual Meetings, which are being held in the Uzbek capital 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 Uzbekistan-focused 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.
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.
In a speech during today’s session of the annual meetings, marking the 30th anniversary of Uzbekistan’s independence, 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.
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.