Uzbekistan launches $50m fund to boost industrial cooperation and SME growth

Uzbekistan will allocate $50 million to a newly established State Targeted Fund for the Development of Industrial Cooperation, aimed at supporting small and medium-sized enterprises (SMEs) and strengthening production linkages with large industrial players.

The fund will operate under the Agency for Industrial Cooperation and Public Procurement, which was recently created by presidential decree. As previously reported, President Shavkat Mirziyoyev appointed Bakhtiyor Khaydarov, first deputy governor of Tashkent, as director of the agency.

The new fund will be established without legal entity status and will focus on financing projects that integrate SMEs into the production chains of major enterprises, as well as expanding the output of domestically manufactured goods. In 2026, the fund will receive $50 million from the Fund for Reconstruction and Development to finance concessional loans and subsidies.

Starting from 1 July 2026, businesses will be able to access preferential financing through commercial banks under special programs funded by the new mechanism. Loans of up to $10 million per project will be available for a term of up to 10 years, including a two-year grace period. Interest rates will be set at 6% per annum in foreign currency and 12% per annum in the national currency, with a bank margin capped at 2%.

Separate financing instruments will be offered for projects focused on launching new high-technology products, expanding existing production capacities, or replenishing working capital. Under this scheme, businesses will be eligible for loans of up to $2 million per project for a period of up to one year, at the same preferential rates of 6% in foreign currency and 12% in the national currency.

In addition to loans, the fund will provide subsidies covering up to 30% of eligible costs, capped at $1 million. These subsidies will support the transfer of production technologies and the acquisition of rights from foreign holders to use brands, trademarks, and service marks.

The authorities also plan to introduce competitive grants for industrial startups. Each year, up to 10 of the most promising projects involving new high-technology products will be selected to receive subsidies covering up to 50% of expenses, with a ceiling of UZS 10 billion per project. These funds will be directed toward the development and practical implementation of industrial innovations.

Officials say the new funding instruments are designed to accelerate industrial cooperation, encourage technological upgrading, and enhance the competitiveness of Uzbekistan’s manufacturing sector.