AKIPRESS.COM - The European Bank for Reconstruction and Development (EBRD) will allocate $50 million convertible loan to O’zsanoatqurilishbank (SQB), Uzbekistan’s second-largest lender, EBRD reported.

SQB will on-lend the funds to local small and medium-sized enterprises (SMEs), and at least 20% of the proceeds will be channelled to support green investments, including energy efficiency or renewable energy projects.

As part of the transaction, SQB will receive corporate climate governance (CCG) technical assistance, resulting in the development of an action plan to manage climate risks, in line with the recommendations of the Task Force on Climate-related Financial Disclosures.

Since 2017, Uzbekistan has undertaken major reforms, particularly in its banking sector, aiming to reduce state involvement and modernise its economy. This convertible loan supports that strategy. The EBRD investment, if conversion take place, will pay the way to gradual reduction in state ownership below 50 per cent, while also strengthening SQB’s corporate governance and resilience.

To date, the EBRD has invested more than €3.38 billion through 111 projects in Uzbekistan.