The electrical engineering industry of Uzbekistan will be granted new incentives and access to cheap loans

Uzbekistan's electrical engineering industry will be granted new benefits and access to cheap loans

Uzbekistan has decided to strengthen support for the electrical engineering industry: enterprises will be granted access to working capital loans at 6% per annum, interest rate compensation will be expanded, and conditions will be created to attract major foreign investors.

The new measures were approved by a presidential decree. The main provisions will come into effect on October 1.

Enterprises in the industry will be issued loans through commercial banks to replenish working capital for a period of up to two years, including a three-month grace period. The maximum amount for a single enterprise will be 5 million dollars, with an interest rate of 6% per annum, of which 2 percentage points represent the bank's margin.

Half of the loan, but not more than 20 billion soums, can be covered by a guarantee from the National Business Guarantee Company. The remaining part can be secured by liquid property, an insurance policy, an export contract, or other types of collateral.

Specific measures are provided for the purchase of copper. When purchasing copper raw materials through the commodity exchange, the enterprise will pay 25% of the cost on its own, and the remaining 75% will be paid by "Uzsanoatexport" within three days. The enterprise must then repay this amount within 90 days. Interest will be charged for the deferral at a rate of 6% per annum. At the same time, the debt of a single enterprise to "Uzsanoatexport" must not exceed 3 million dollars.

In 2026-2028, the state will compensate part of the interest expenses on loans for investment projects in the electrical engineering industry. The mechanism applies to loans within the equivalent of 20 billion soums, regardless of the total amount of the loan itself.

For loans in the national currency, compensation is provided for the portion of the rate exceeding the Central Bank's base rate — up to 10 percentage points. For foreign currency loans, the state will compensate the portion of the rate above 6%, but not more than 5 percentage points.

The compensation will be provided on a "2+1" principle: for the first two years under the established conditions, and for the third year it will be maintained if the enterprise's annual revenue from the sale of products or services grows by at least 15% compared to the previous year.

A separate block of measures concerns attracting major international companies into electrical engineering, electronics, and robotics. This refers to investors who have been included in the Forbes Global 2000 rating and international supply chains over the past three years and are ready to invest at least 50 million dollars in a project.

Investment agreements for such companies will secure obligations to increase added value by more than 40% over three years and to allocate at least 3% of annual profit to research and development (R&D).

In special economic zones, investors are planned to be provided with ready-made production buildings connected to electricity, gas, water, treatment facilities, and railway infrastructure.

In addition, major investors will be able to obtain exemption from land tax, property tax, and corporate income tax for a period of 10 years.

Uzbekistan also plans to increase exports of electrical engineering products to 5 billion dollars by 2030. The volume of production in the industry and related sectors is intended to be brought to 11 billion dollars.