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FINANCING INDUSTRIAL SECTOR PROJECTS IN UZBEKISTAN

FINANCING INDUSTRIAL SECTOR PROJECTS IN UZBEKISTAN. BANKING & FINANCIAL SECTOR. 1 . Central Bank of Uzbekistan 2. 30 commercial banks: 3 state-owned banks 13 joint stock banks 5 banks with foreign capital 9 private banks 3. Fund for Reconstruction and Development

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FINANCING INDUSTRIAL SECTOR PROJECTS IN UZBEKISTAN

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  1. FINANCING INDUSTRIAL SECTOR PROJECTS IN UZBEKISTAN

  2. BANKING & FINANCIAL SECTOR • 1. Central Bank of Uzbekistan • 2. 30 commercial banks: • 3 state-owned banks • 13 joint stock banks • 5 banks with foreign capital • 9 private banks • 3. Fund for Reconstruction and Development • 4. Leasing companies, Investment Funds

  3. BANKING & FINANCIAL SECTOR Assets Capital

  4. BANKING & FINANCIAL SECTOR Dynamics of deposits, assets and credit portfolio • Establishing of Deposit Guarantee Fund– since 2002 • Full guarantee of population deposits in commercial banks – since 2009 • Annual growth rate of assets, deposits and credits - on average 35-40% • Share of long term loans to real sector in credit portfolio – 76% • Overall assets significantly grew since 2009 by 2012 - to 200%

  5. BANKING & FINANCIAL SECTOR • Selected list of credit lines by international banks provided to local banks: • Asian Development Bank, IFC, World Bank, Islamic Development Bank • Korea Exim Bank, Korea Development Bank • China Development Bank, The Export-Import Bank of China • Japan Bank for International Cooperation (JBIC) • Export-Import Bank of India, Exim Bank of Malaysia • Commerzbank, Deutsche Bank

  6. BANKING & FINANCIAL SECTOR • COMPREHENSIVE REGULATIONS • Conservative approach to the development of banking sector - No single bank bankruptcy since 1991 • Strict bank licensing regulations aimed at quality rather than quantity • Comprehensive regulations based on Basel committee recommendations and regular CAMELS rating system on site audit • Compulsory annual international audit of all commercial banks since 1998

  7. BANKING & FINANCIAL SECTOR • HIGH LIQUIDITY AND CAPITAL ADEQUACY RATIOS • Risk-weighted capital adequacy ratio is 24,3% (Central Bank regulation is 10%, Basle Committee standard is 8%) • Current liquidity is above 72.8% (Central Bank requirement is 30%) • 26 commercial banks in the country, received "stable“ rating from leading international rating companies ( "Moody's", «Standard & Poor’ s» and « Fitch ratings») • GOOD PERFORMANCE OF CREDIT PORTFOLIO • High quality and diversification of credits • National Institute for Credit Information (NICI) – established as a real-time database for credit histories networking and used by all banks and bank branches

  8. Fund for Reconstruction and Development • Established in 2006 by the Presidential Decree • Charter capital 15 billion U.S. Dollars Main tasks: • financing strategic investment projects in key areas • promotion of projects co-financing by investors and financial institutes

  9. AREAS of FINANCING • I. Core sectors • Oil & Gas • Chemical and Petrochemical • Energy & Power • Metals & Mining • Transport & Communications • II. Infrastructure projects

  10. PROJECT FINANCING MECHANISM UFRD CO-FINANCING Financial Institutions, Banks and Investors BANKS • Refinancing • Monitoring • 5 authorised banks BORROWERS Loans provided for designated projects

  11. PORTFOLIO STRUCTURE Machinery: 3% Mining: 9% Transportation & Infrastructure: 26% Chemicals: 14% Oil&Gas: 25% Energy: 23% Credit portfolio: over 71 projects at financing and project development stages

  12. PROJECT IMPLEMENTATION SCHEME Dehkanabad Potash Fertilizer Plant(2007) Resources Co-Financing EPC Potash salt deposit Tyubegatan Eximbank of China $42 mln. International Contractors UFRD $62 mln. Uzkimyosanoat $22 mln. Results Future expansion to production of 600 000 tons of potash fertilizers 2nd stage of project started in 2011 Export of200 000 tons of potash fertilizers 1321 new jobs Area infrastructure Modern Technologies

  13. PROJECT EXAMPLES Description Building Gas and Petrochemical Complex on the Ustyurt Surgil deposit with further field development • The project's outcome is a significant expansion in the value-added chemical process industry in Uzbekistan and the increase in value of a key natural resource. As a result, 3,373 KTPA of natural gas will be processed into 387 KTPA of high-density polyethylene, 83 KTPA of polypropylene, and 2,568 KTPA of methane-rich processed gas. The project will boost long-term employment by adding approximately 3,500 direct jobs during construction and 1,090 during operations, in addition to indirect employment opportunities. • Uz-Kor Gas Chemical is a joint-venture company which is 50% owned by Uzbekistan’s UNG and 50% by a consortium of Korean companies: Honam Petrochemical Corporation (45% of the Korean consortium), Korea Gas Corporation (45%), and STX Energy (10%). Uz-Kor Gas Chemical was incorporated in Uzbekistan in May 2008 as a project company to build, own, and operate the project. • A consortium of foreign banks, including the Asian Development Bank, the Export-Import Bank of Korea, China Development Bank and others, are providing loans for a total of $2.54 billion for 16 years. Surgil Gas-chemical Complex Transaction terms

  14. PROJECT EXAMPLES Description Production of synthetic liquefied gas (GTL) on the base of methane processing at Shurtan Gas-Chemical Complex • Gas to liquids (GTL) is a refinery process to convert natural gas or other gaseous hydrocarbons into longer-chain hydrocarbons such as gasoline or diesel fuel. Methane-rich gases are converted into liquid synthetic fuels either via direct conversion or via syngas as an intermediate, for example using the Fischer Tropsch or Mobil processes. • South African energy and chemicals group Sasol concluded a joint venture (JV) agreementwith Uzbekistan's national oil and gas company, Uzbekneftegaz, as well as with Petronas, of Malaysia, for the development of a new $2,7-billion gas-to-liquids (GTL) project. • (GTL) plant, located 40 kilometers south of Qarshi in Uzbekistan.This plant will be based on Sasol’s world leading GTL technology and will have a capacity of 1.4 million metric tons per year, a similar capacity of the Oryx GTL facility in Qatar implemented by Technip, with following product slate: GTL diesel, kerosene, naphtha and liquid petroleum gas. • The plant, would tap into gas reserves of some 60-trillion cubic feet (tcf), with a typical GTL plant requiring only 3,5 tcf. • The facility could produce some of 1,4-million tons, or 40 000 bbl/d, of GTL diesel, kerosene, naphtha and liquefied petroleum gas according to Sasol. Uzbekistan GTL Transaction terms

  15. PROJECT EXAMPLES Description NAVOI CCPP Navoi Thermal Power Plant Modernization Project • The project considers construction of Combined Cycle Power Plant 478 MW capacity. • The facility is being built at the Navoi Thermal Power Plant of State Joint Stock Company Uzbekenergo (SJSC Uzbekenergo), the authority under which the power industry of Uzbekistan operates. • The natural gas-fired CCGT power plant currently under construction in Navoi City, the capital of Navoi Province, which is in southwestern Uzbekistan and is one of the country’s largest industrial centers. The economy of the Navoi region is currently enjoying a boom fueled by production of natural resources, including oil, natural gas and precious metals, as well as chemical fertilizer and other material manufacturing. • When completed, the new power generation system will supply electricity and heat (hot water) to the Navoi Free Industrial Economic Zone and thereby contribute to the development of industry in the region. • The CCGT power generation plant to be built in Navoi consists primarily of one M701F gas turbine, one steam turbine, one heat recovery steam generator and two generators. MHI will provide the gas and steam turbines and Mitsubishi Electric Corporation will supply the generators. INITEC Energia, an ACS Group company, will be responsible for overall engineering of the facility and Calik Enerji Sanayi ve Ticaret A.S., a Turkish construction company, will perform civil engineering and installation work at the site. Mitsubishi Corporation will handle the trade particulars. Transaction terms

  16. OUR PARTNERS • Asian Development Bank • World Bank • Japan International Cooperation Agency • Qatar Investment Authority • Islamic Development Bank • State General Reserve Fund of Oman • Korea Development Bank • Korea Export-Import Bank • International Petroleum Investment Company • KSURE • Malaysia Export-Import Bank • China Development Bank • The Export – Import Bank of China • Kuwait Fund for Arab Economic Development • Czech Export Bank

  17. FUND FOR RECONSTRUCTION AND DEVELOPMENT OF THE REPUBLIC OF UZBEKISTAN • Tel:   +998 71 2385648 • Fax:  +998 71 234 0157 • 101 Amir Temur Street • Tashkent |Uzbekistan|100084 • info@ufrd.uz • http://ufrd.uz

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