American-Uzbekistan Chamber of Commerce
Week in Review:
November 2, 2012 - November 9, 2012

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In This Issue:
Islamic Development Bank gives Uzbekistan $100 mln loan for modernizing two HPPs
Uzbekistan Launches Projects With Cost of $186 Million
Central Asian Foreign Ministers to meet in Japanto start construction of gas chemical complex in 2014
Uzbekistan draws foreign investments worth $2 bln for nine months
Lukoil says its South-West Gissar project receives approval
JICA can issue US$250m to expand capacities of Navoi thermal power station

Established in 1993, the American-Uzbekistan Chamber of Commerce (AUCC) is a private, non-profit trade association representing interests of U.S. businesses ranging in size from small private enterprises to large, multinational corporations conducting business in Uzbekistan.

Our Mission: To advocate the views of the business community to ensure that private sector positions are considered during the development of key policies that impact American businesses and the future of U.S.-Uzbekistan relations.

Our Objective: To serve the needs of its members by strengthening commercial relations between the United States and Uzbekistan.   


Islamic Development Bank gives Uzbekistan $100 mln loan for modernizing two HPPs

Uzbekistan has raised a $100 million loan from the Islamic Development Bank for the modernization two hydroelectric power plants in the Tashkent region, Farkhad HPP and HPP-14 of the Lower Bozsui Cascade.

A source in the government circles told Interfax that representatives from the bank and the Uzbek government signed a loan agreement on Tuesday in Tashkent during a meeting of the Arab Coordination Group.

The modernization of the HPPs foresees a replacement of generators and turbines, as well as electrical equipment, relays and communications systems. The project's implementation will help boost the generating capacity of the two HPPs by 30 MWt in total.

The project is valued at $165.7 million and will be implemented in 2012-2015. In addition to the aforementioned loan, the project will be financed with funds from state company Uzbekenergo.

Uzbekistan's installed electricity capacity comes to 12.4 GWt, including Uzbekenergo with 12 GWt. Up to 90% of electricity in the country is produced at 10 combined heat and power plants. The country's 29 HPPs are largely connected through a cascade system and powered by water flow.

The Arab Coordination Group was founded in 1975 in order to oversee the effectiveness of operations of financial organizations such as Islamic Development Bank, Saudi Fund for Development, the OPEC International Development Fund, the Kuwaiti Fund for Arab Development, and the Abu Dhabi Fund for Development.   


Roughly eight projects worth $185.8 million were launched in Angren special industrial zone (FIZ) established in the Tashkent region of Uzbekistan, the information of Uzbek Ministry of Economy stated on Wednesday.
The largest project is the construction of a new sugar factory worth $108.5 million. Construction of a new plant with a capacity of one thousand tons of sugar per day from raw cane sugar is implemented by Angren Shakar. The founders of the company are Singapore Welton International and Kito Investment, as well as Austrian SEID Handelsgesellschaft mbH Project completion is scheduled for late 2014.
Bulgarian Prista Oil Holding EAD and a joint stock company (JSC) Uznefteprodukt (subsidiary of Uzbekneftegaz NHC) are planning to launch production on the regeneration of motor oils in late 2013. The project worth $ 15 million provides for production of base oils from used raw materials by hydro treating in volume of 43 thousand tons per year.
In early 2013 Uzbek-Korean joint venture Uz-Shindong Silicon is going to build a plant on production of silicon in Angren special industrial zone with capacity of five tons per year. The project, worth about $ 10 million is implemented through direct investments of joint venture founders - the State Committee for Geology and Mineral Resources of Uzbekistan and Korean Shindong Enercom Inc.
Furthermore, the Uzbek Ministry of Foreign Economic Relations, Investments and Trade signed a memorandum of understanding with the Korean Gong Seok on establishment of a number of companies in the electrical industry and building materials industry on the territory of Angren with total estimated cost of $52.3 million.
Angren special industrial zone was established in April this year by the decree of President Islam Karimov. Functioning term of Angren is 30 years with the possibility of extension. Within this period, special customs and tax regimes, simplified procedure for entry, stay and departure, as well as permits for employment of citizens non- residents of Uzbekistan will be provided on this territory. Tax exemptions will be applied with minimal investment of $300.000.   


Kazakhstan Foreign Minister will go to Japan to meet with his colleagues from Central Asia, reports citing the official representative of Kazakhstan Foreign Ministry Altay Abibullayev.
"Fourth meeting of Foreign Ministers will be held in Tokyo on November 10 under the Central Asia+Japan dialog. The meeting will be attended by Foreign Ministers of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Japan. Kazakhstan delegation will be led by Foreign Minister Yerlan Idrissov," Altay Abibullayev said.
According to him, they are going to discuss regional cooperation, interaction of Central Asian states with Japan in environmental protection, healthcare, energy, trade and investments, regional security, as well as a joint statement on new approach to cooperation under the said dialog.
"The event will include meetings of Kazakhstan Foreign Minister with Japanese Prime-Minister Yoshihiko Noda, Foreign Minister Koichiro Gemba, Minister of Economy, Trade and Industry Yukio Edano, as well as Foreign Minister of Central Asian states," Abibullayev said.
The parties will also discuss rational use and management of water and energy resources, development of the transit and technical potential of the region, improvement of the region's ecology, implementation of new energy-saving technologies and development of renewable energy sources.
The official representative reminded that Japanese delegation led by Minister of Economy, Trade and Industry Yukio Edano visited Kazakhstan in May 2012 and took part in the work of the 5th Astana Economic Forum. Altay Abibullayev also noted that such mechanism of consultations is important for each Central Asian country to establish partnership relations with Japan and for enhancement of multilateral interaction in the region.
Central Asia + Japan Dialog was initiated by Japan during the visit of Japanese Foreign Minister to Central Asian countries in 2004. The first meeting of the Foreign Minister was held in Astana on August 28, 2004. It was followed by a meeting in Tokyo on June 5, 2006. The third meeting was held in Tashkent in 2010.   


The total amount of foreign investments and loans attracted in Uzbekistan in the January-September 2012 amounted to $2 billion. Around $ 1.6 billion were mastered (the sum increased by 9.6 per cent compared to the same period of 2011). Around 1.3 billion of this amount fell to the foreign direct investments.

This was stated in a joint statement of the Ministry of Economy and the State Statistics Committee of the country on "Results of socio-economic development of the Uzbek Republic for the first nine months of 2012" published in the official media.

According to the report, the total amount of investments made in fixed assets from all sources from early 2012 amounted to 15.3 billion soums (the sum increased by 9.8 percent).

"The measures of stimulating the investment activity of economic entities and population have contributed to the growth of investment volume from own funds of enterprises by 10.3 percent, the population's funds - 23.6 percent," the report said. "Increasing the funds from the Uzbek Fund for Reconstruction and Development by 1.5 times accelerated the implementation of major strategic industrial and infrastructure projects."

Around 106 investment projects have been implemented since early 2012. The expansion and renovation of the Kalmakir mine, the creation of a new complex for the production of trucks and components in the Samarkand region (the second stage - the assembly line), organizing the LCD-TV production at White Machine Technology joint venture, reconstruction of the passenger terminal of the airport in Navoi and a number of other projects are among them.

Around 155 new facilities using local raw materials and components, including - those producing 45,000 cubic meters of foam products in Andijan, Kashkadarya and Syrdarya regions, 72,000 square meters of laminate in the Tashkent region, 50,000 tons of cement in the Fergana region, two million square meters of drywall, 70,000 panels and 64,000 square meters of modern coatings in Tashkent, 19 brick production facilities with a capacity of 102.3 million pieces have been commissioned within the territorial regional development programs of building materials.

In general, around 882 production facilities, including those in light industry - 337 facilities, food industry - 234 facilities, the building materials industry -189 facilities, woodworking - 46 facilities, engineering 14 facilities, chemical industry - 16 facilities, other sectors - 46 facilities have been commissioned since early 2012.   


The Steering Committee approved the Part to Be Approved of the Working Project Documentation for development of South-West Gissar gas condensate fields, LUKOIL Uzbekistan Operating Company said.

Approval of the Part to Be Approved of the Working Project Documentation (analog of feasibility study) is an important milestone in Gissar group of fields development project, implemented by LUKOIL Uzbekistan Operating Company (LUOC) under Production Sharing Agreement.

Seven fields were found in South-West Gissar contract area. South Kizilbayrak and Koshkuduk oil fields are exploited by the Operator since 2008. Adamtash, Gumbulak and Djarkuduk - Yangi-Kizilcha gas condensate fields are being developed since 2010, at present drilling of operating well stock is being completed.

Early Gas facilities at Djarkuduk - Yangi-Kizilcha field, ensuring production of 1.1 bln. cubic meters of gas per year, were put into operation in December 2011: five operating wells, gas-gathering station, gas pipeline to South Tandircha gas-gathering station. However main increase in gas production is planned to take place after facilities of Full Development stage are put into operation. According to the project of development field reserves are estimated to be 82.3 bln. cubic meters of gas, maximum production volume in the stage of continuous extraction will exceed 4.2 bln. cubic meters of gas per year.

Surface facilities for Full Development stage are designed since March 2011 by KNM Process Systems (Malaysia). Set of design estimates, substantiating technical and economic expediency of accepted design solutions, from the point of view of operation and ecological safety of the facilities as well, was developed within the framework of preparation of the Part to Be Approved of the Working Project Documentation.

At the beginning of July of the current year the Part to Be Approved of the Working Project Documentation was submitted to State Committee for Architecture and Construction of the Republic of Uzbekistan for expert examination, on 5 September all required positive conclusions of Uzbekistan authorized bodies were received and 22 set of developed designed documentation was approved by the . So governmental agencies gave their approval for project implementation.

The project is implemented team of LUOC experts, experienced in various fields, with application of up-to-date systems and tools of project management. At present project team is developing working documentation, placing purchase orders for equipment and materials, holding tenders for facilities construction.

To ensure that the fields are put into operation on time it is planned to conclude contracts for construction of access roads, external power supply lines, 110/10 kV substations, field support base, meant for accommodation of operating personnel of the company, conduit, as well as process facilities, gathering systems and booster compressor station.

So Gissar project is coming into a new development stage and its successful implementation will result in substantial increase in production volume and considerable improvement in efficiency of LUKOIL Uzbekistan activity.

Japan International Cooperation Agency (JICA) can issue loan for US$250 million to expand capacities of Navoi thermal power station in 2013.

RIA Novosti reported quoting source in the government that the Uzbek Government, which can approve it in the beginning of 2013. After that the financing will be opened to the project.

The report said that JICA can adopt decision on allocation of loan in March 2013.

The project envisages construction of the second combined-cycle plant with the capacity of 450 megawatt, as well as gas compression station. The project will be implemented in two years.

The preliminary cost of the project is US$500 million. Along with JICA loan, the project will be financed due to own resources of Uzbekenergo state joint stock company and loan of the Fund for Reconstruction and Development of Uzbekistan.

The consortium of Turkish Calik Enerji Sanayi ve Ticaret AS and Spanish Initec completed construction of combined-cycle plant with the capacity of 450 megawatt at the Navoi thermal power station in October 2012. The project cost was US$530 million.

Total capacities of the Navoi thermal power station with new combined-cycle plant reached 1,546 megawatt, which allows to produce 7.9 billion KWH electricity a year.

The American-Uzbekistan
Chamber of Commerce
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phone: 202.509.3744
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