Uzbekistan cuts privatisation down payments to 15% and targets UZS 14 trillion by year-end

Uzbekistan will offer state shares in 84 companies, 1,242 real estate properties and about 8,000 hectares of land for sale under a presidential decree that also loosens the payment terms for buyers, the State Assets Management Agency said on 8 September. Decree PD-177, dated 28 August, is titled "On Additional Measures to Reduce State Participation in the Economy and Accelerate Privatization Processes".

The agency put the total value of assets to be offered at UZS 100 trillion, and said sales are expected to raise at least UZS 14 trillion by the end of the year. A further 85 state-owned enterprises are to be liquidated or reorganised, and 84 assets that failed to sell before will be re-offered at auction with a starting price of UZS 1 million, according to the agency.

Cheaper to bid, cheaper to pay

The decree changes the economics of buying from the state. The advance payment for an asset is to fall to 15 per cent from 35 per cent, and the balance can be paid in instalments without interest, where an average mark-up of 14 per cent applied before, the agency said. For large transactions:

• buyers who pay in full within six months get a 25 per cent discount, against 14 per cent for full payment within one month under the old procedure;
• a buyer who pays 35 per cent of the price within three months can pay the rest interest-free over up to five years;
• a buyer who pays 50 per cent within six months can spread the rest over up to seven years.

Auctions also change. If an asset is unsold for three months its price will be cut in stages, and in some cases a "hybrid auction" combining a price reduction followed by an increase may be used. The agency said the new mechanisms and benefits can also apply to assets held on the balance sheets of commercial banks with state participation, and that land will be sold as a "ready-to-use package" with utility connection conditions and permits prepared in advance. The decree also provides for the gradual commercialisation of major state universities and specialised medical centres, with room for private investors, according to the release.

What is on the list

The news site Spot, which said it had seen the decree, reported that state stakes in 62 enterprises are planned for public auction in 2026 and 2027, and published the list. Holdings on the list include 100 per cent of Andijan Mechanical Plant, owned through Uzbekistan Railways, as well as minority stakes held by the Uzbekistan Direct Investment Fund, such as 33.3 per cent of Yashil Ferma and 45.1 per cent of Orient Technology. The relationship between the 62 auction listings and the agency's figure of 84 companies is not explained in either source.

Several assets get bespoke treatment, according to Spot. The privatisation of the state's stake in Turonbank will be run by the Ministry of Economy and Finance, taking into account the conclusions of international consultants and the bank's readiness. Stakes in the International Cooperation Centre and Uzexpocentre will be sold with the approval of the Presidential Administration. The state's 0.001 per cent stake in Trustbank may be sold without a valuation at the exchange quotation price.

The decree also sets a procedure for banks to hand assets to the agency. Spot reported that transfers will use the reserves banks hold against potential losses or the sale proceeds, and must take account of covenants on issued bonds and on loans from foreign lenders, as well as minimum capital rules. If an asset sells above book value, the bank receives the amount corresponding to the residual value.

What to watch

The UZS 14 trillion target is the number that will test the decree: it implies that about 14 per cent of the assets by value, on the agency's own figures, change hands in roughly four months. The agency framed the measures as reducing state participation in competitive sectors, developing private enterprise and making more efficient use of state assets. It did not publish a timetable for individual auctions, and the decree allows the list and the size of stakes to be amended by the agency with the approval of the Presidential Administration, Spot reported.