Uzbekistan to allocate 2.6 trillion soums to finance purchase of agricultural machinery in 2023-2024

According to the document, from April 1, 2023, a unified procedure for state support for the purchase of agricultural machinery manufactured in the Republic of Uzbekistan is being introduced, in accordance with which:

•  subsidies provided for by the presidential decree No. PD-7 dated November 11, 2021 “On measures to create an agricultural engineering cluster in the city of Chirchik” apply to all domestic enterprises for the production of agricultural machinery;
•  all types of agricultural machinery and units, as well as their components and spare parts imported from abroad by agricultural enterprises and business entities, according to the list formed in the prescribed manner, until January 1, 2025, as an exception, are exempt from customs payments (except for VAT and customs clearance fees), from the payment of utilization fee, as well as business entities are allowed to pay VAT with a delay of up to 270 days from the date of their placement in the customs regime of release for free circulation (import);
•  it is allowed to lease agricultural machinery and units to self-employed persons and individual entrepreneurs within the funds allocated to leasing companies by international financial institutions.

It is planned to allocate a total of 2.6 trillion soums to finance the purchase of agricultural machinery in 2023-2024, of which:

•  undisbursed funds in the amount of 670 billion soums ($59 million) in 2022 out of $100 million placed by the Ministry of Economy and Finance in commercial banks for the purchase of agricultural equipment, in accordance with the presidential decree PD-335 dated July 28, 2022 – for the allocation of loans for a period of 10 years at a rate of 10% for the purchase of equipment;
•  800 billion soums ($70 million) – through placement in leasing organizations for the purchase of agricultural machinery at the expense of international financial institutions;
•  trillion soums ($100 million) – through placement in commercial banks for the purchase of agricultural equipment at the expense of international financial institutions.

Commercial banks are recommended to allocate borrowed funds for the supply of agricultural machinery to leasing companies, accepting the purchased agricultural machinery as collateral, an insurance policy or a third party guarantee as a 100% guarantee against the risks of non-repayment of borrowed funds for the entire loan period.