UzPSB pre-privatisation convertible loan



Project number:


Business sector:

Financial institutions

Notice type:


Environmental category:


Approval date:

09 Feb 2022



PSD disclosed:

17 Dec 2021

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The provision of a senior pre-privatisation convertible loan of up to US$ 50 million in favour of Uzbek Industrial and Construction Bank (UzPSB), a joint stock commercial bank established in Uzbekistan. The equivalent of 20 per cent of the EBRD loan will be used for supporting energy efficiency, renewable energy, climate resilience investments. The remainng amount will on-lent private-sector borrowers. The conversion of the loan is at the EBRD's full discretion and will depend on the progress of UzPSB's privatisation.

Project Objectives

The project aims to contribute to privatisation of UzPSB via extending a convertible loan along with other International Financial Institutions (IFIs) assisting the government of Uzbekistan with banking sector reforms.  The proceeds of the loan will be used to promote private entrepreneurship and green investement.

Transition Impact

ETI score: 71

The project will enhance Uzbekistan's financial sector resilience by supporting the commercialisation of one of the country's largest banks and by facilitating increased private sector participation in its ownership. The project will support improvements in UzPSB's corporate governance including specialised corporate governance training. Upon the conversion, the EBRD will have theright to nominate a directros to UzPSB's Board of Directors of UzPSB. The transaction is part of EBRD's ongoing privatisation policy dialogue in the country's financial sector.   

Client Information


UzPSB is the oldest banks in Uzbekistan, ranked third by assets (13 per cent of the market share).  The bank is majority-owned by the state of Uzbekistan, primarily via the Ministry of Finance.  At end of the first half of 2021, its equity stood at US$ 651 million and total assets at US$ 4.78 billion. UzPSB aims to become the first green bank in Uzbekistanby  supporting sustainable environmental transition of its clients. It has a network of 44 branches and 146 banking service centres, with 3,885 employees servicing 1.5 million clients across the country. UzPSB is rated by Fitch (BB-/stable) and by S&P (BB-/ Negative).

EBRD Finance Summary

USD 50,000,000.00

Total Project Cost

USD 50,000,000.00


The EBRD's expertise will help UzPSB achieve and maintain good corporate governance standards that exceed local requirements and support continued adoption of best practices. The EBRD will consider providing TC to the bank focusing on its capacity building to fast-forward the adoption of good international practices of climate governance, risk management and disclosures. The EBRD's involvement alongside other IFIs will strengthen reform advocacy and help keep UzPSB's transformation on track. The EBRD's presence as a creditor and, potentially, a shareholder is expected to help ensure that future operations of UzPSB are based on international business and corporate governance standards, thus sending a positive signal to potential future private investors.

Environmental and Social Summary

 Categorised FI (ESP, 2019). UzPSB Bank is an existing client of the Bank. Environmental and Social Due Diligence (ESDD) included a review of the implementation of the Company's Environmental and Social Management System (ESMS). The ESMS is considered generally aligned with Performance Requirement (PR) 9. The finance is anticipated to be used in private sector investments including energy efficiency, renewable energy, climate resilience investments and the ESMS will need to be enhanced to accommodate potential higher risk transactions prior to their approval under this sub-loan (financing of any Category A projects will be excluded). In addition, UzPSB will need to continue to comply with PR2 and 4 and the EBRD's Environmental and Social Risk Management Procedures for Corporate, SME and Micro Loans. TC support to enhance the ESMS is envisaged as part of the project. Upon conversion to equity, PR9 will apply to UzPSB entire portfolio (any new exposures as of signing) and the ESMS will be further upgraded as required prior to conversion.

Technical Cooperation and Grant Financing

TC funds may be sought to help develop specific areas of the bank i to be further discussed and decided jointly with UzPSB and other involved IFIs. TC support to enhance the ESMS will be co-ordinated among IFIs participating in the project. Additional TC support will be necessary if the EBRD becomes a shareholder for on-going capacity support, monitoring of the ESMS implementation. The EBRD will also consider providing TC to the Company focusing on capacity building to fast-forward adoption of good international practices of climate governance, risk management and disclosures.

Company Contact Information

Akmal Palvanov, Director, FI&IR Department
+99871 120 45 00 (ext. 1110)
+99894 711 16 55
3, Shakhrisabz str. Tashkent 100000, Uzbekistan

PSD last updated

17 Dec 2021

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

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The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

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The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

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The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

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Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email to get guidance and more information on IPAM and how to submit a request.


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