Uzbekistan considers proposal to cut electricity prepayment for businesses to 50%

Uzbekistan is weighing a proposal to lower the mandatory upfront electricity payment for businesses from 100% to 50%. This suggestion emerged during an open dialogue session between a government commission and entrepreneurs in the Khorezm region of Uzbekistan.

The issue was brought forth by a representative of a company that imports wheat and produces flour. The entrepreneur stated that their production had halted due to tax problems and the necessity of making full advance payments for electricity. According to the entrepreneur, the current system, which demands businesses pay the entire electricity cost before usage, restricts their access to working capital.

The entrepreneur commented, "If electricity payments were made after the sale of the product or at the end of the month, that would be fine for us. Now, we have to make a 100% prepayment, which freezes our funds."

Deputy Prime Minister Jamshid Khodjaev clarified that the government commission could not alter the advance payment system via its meeting protocol, as such a change would necessitate a broader policy decision. Khodjaev mentioned that the government had previously explored similar provisions for greenhouse farms. However, he noted that under the existing framework, banks deposited the allocated funds as advance payments for electricity. The deputy prime minister confirmed that businesses are presently required to make advance payments before receiving electricity services.

During the discussion, the entrepreneur reminded the commission that from February 2019 to July 2024, businesses were only required to make a 50% advance payment for electricity, and proposed reinstating that arrangement.

Khodjaev responded, "This is also a proposal, so consider it, as difficulties are currently arising that are no worse than those encountered during the [COVID-19] pandemic. Make a proposal."

The proposal was put forward for consideration during the dialogue, but no decision regarding a change to the current prepayment system was announced.