About us

REGULATION

I. General provisions

1. The Fund for Reconstruction and Development of the Republic of Uzbekistan (hereinafter referred to as the “Fund”) was established in accordance with the Decree of the President of the Republic of Uzbekistan “On the Establishment of the Fund for Reconstruction and Development of the Republic of Uzbekistan” No. PF-3751 dated May 11, 2006. The Fund is a financial institution under the Cabinet of Ministers, the main purpose of its activities is to ensure the implementation of projects for the modernization and technical re-equipment of leading, primarily basic, sectors of the economy, as well as to achieve consistent, stable and balanced socio-economic development of the country and implement an effective structural and investment policy.

2. The Fund shall carry out its activities in accordance with the Constitution of the Republic of Uzbekistan, the laws of the Republic of Uzbekistan, the resolutions of the chambers of the Oliy Majlis of the Republic of Uzbekistan, the decrees, resolutions and orders of the President of the Republic of Uzbekistan, the resolutions and orders of the Cabinet of Ministers of the Republic of Uzbekistan, other legislative acts of the Republic of Uzbekistan and these Regulations.

3. The Fund shall be established under the Cabinet of Ministers of the Republic of Uzbekistan and shall have the rights of a legal entity, its own independent balance sheet, an account with the Central Bank of the Republic of Uzbekistan, including an account in foreign currency, and a seal with the State Emblem of the Republic of Uzbekistan.

4. The Government of the Republic of Uzbekistan, represented by the Ministry of Finance of the Republic of Uzbekistan, is the founder of the Fund.

5. The Fund’s funds shall be deposited in special accounts of the Fund at the Central Bank of the Republic of Uzbekistan’s Tashkent City Main Department.

6. The Fund shall finance projects (co-financing) in the following ways:

See previous edition.

According to the applications of commercial banks (hereinafter referred to as commercial banks) included in the list approved by the resolution of the Fund Management Council - to issue loans and open credit lines on a term, installment and repayment basis;

According to the applications of the Ministry of Economic Development and Poverty Reduction for the development of preliminary or final feasibility studies of certain investment projects, in accordance with the resolutions of the President of the Republic of Uzbekistan - to issue grants or interest-free loans (in an amount not exceeding 5 percent of the Fund's profit for the previous year per year);

According to the applications of commercial banks and the borrower, agreed with the Ministry of Finance of the Republic of Uzbekistan and based on the resolutions of the President of the Republic of Uzbekistan - to issue preferential loans covered by the State Budget;

in accordance with the constituent documents of enterprises and organizations being established and the Government's resolutions on their establishment - to invest in the authorized capital of newly established financial institutions and enterprises of strategic importance in the basic sectors of the economy with the participation of foreign investments (in an amount not exceeding 25 percent of the authorized capital (fund) of the enterprise or organization).

Also, the Fund's funds can be used for the following:

According to the orders of the Ministry of Finance and the relevant resolutions of the President of the Republic of Uzbekistan - to pay off obligations to international financial institutions and foreign creditors on the state's external debt ahead of schedule;

In accordance with the approved state programs, according to the resolutions of the President of the Republic of Uzbekistan - to provide preferential loans for the purchase of new modern foreign technologies, machinery and equipment, as well as other goods of strategic importance.

7. The Executive Directorate of the Fund is the administrator of the Fund's funds.

8. Address of the Foundation: 101, Amir Temur Street, Tashkent, Republic of Uzbekistan.

II. Main tasks and functions of the Foundation

9. The main tasks of the Foundation are:

concentration of state financial resources allocated to the Fund;

financing of extremely important projects that are of decisive importance in the implementation of priority tasks in the development of the economy and structural transformation and modernization of production;

lending to programs for the modernization and technical re-equipment of strategically important enterprises, primarily the basic sectors of the economy;

ensuring the financing of projects aimed at the technical re-equipment of the fuel and energy complex, chemical industry, machine building and non-ferrous metallurgy sectors and increasing the pace and volume of production;

opening credit lines to commercial banks of the republic in accordance with the procedure established by the resolution of the Fund Management Council, with the purpose of co-financing of investment projects of high priority importance for the modernization of leading industries, targeting funds for the purchase of foreign technologies and equipment for export and import-substituting production.

financing the implementation of socially significant national state programs and projects for the formation of production and non-production infrastructure, primarily in promising but underdeveloped regions;

financing projects for the development and restoration of production infrastructure for the placement of new industrial production in the future, primarily in rural areas, on a preferential basis, including through subsequent reimbursement from the State Budget;

financing the modernization and development of transport and telecommunications infrastructure, which will create conditions for the integration of the republic into the international communications network, providing the shortest access to international transport corridors and world markets;

financing the early repayment of obligations to international financial institutions and foreign creditors on the state's external debt;

ensuring the organization of joint financing of projects with international financial institutions, credit institutions of the republic and foreign countries.

10. Based on the assigned tasks, the Fund performs the following functions:

develops forecasts of the inflow and use of the Fund's funds in connection with the macroeconomic and monetary indicators for the next year, the main parameters of the State Budget and state development programs, and submits them to the Fund Management Council within the established deadlines;

provides loans on the basis of contracts concluded for projects to develop and restore production infrastructure for the placement of new industrial production in the future, primarily in rural areas;

provides funds to the Ministry of Finance of the Republic of Uzbekistan on a non-repayable basis for the early repayment of obligations to international financial institutions and foreign creditors on the state's external debt;

invests in the authorized capital of newly established financial institutions and enterprises of strategic importance with the participation of foreign investment in the basic sectors of the economy (in an amount not exceeding 25 percent of the authorized capital (fund) of an enterprise or organization);

In accordance with the resolutions of the President of the Republic of Uzbekistan and the orders of the Ministry of Economic Development and Poverty Reduction, it provides grants and interest-free loans for the development of preliminary or final feasibility studies of certain investment projects, the amount of the allocated loans is subsequently added to the total cost of the project and, if the project is implemented by attracting a loan from the Fund, to the total cost of the allocated loan;

provides preferential loans in accordance with the resolutions of the President of the Republic of Uzbekistan for the purchase of new modern foreign technologies, machinery and equipment and other goods of strategic importance in accordance with approved state programs;

carries out financing of commercial banks within the limits established annually for each commercial bank on the basis of general agreements signed on the terms of financing and the mechanism for repaying the Fund's funds;

Constantly monitors the targeted and effective use of the Fund's funds and the timely return of funds transferred to commercial banks, and keeps records of the Fund's funds by sources of income and main areas of their use;

having the right to receive any information about accounts opened in commercial banks and operations carried out on them, studies the activities of commercial banks and borrowing enterprises in terms of the fulfillment of obligations imposed on them.

Carries out specific targeted work to improve the procedure for the formation and use of the Fund's funds;

Takes measures within its powers or makes proposals in accordance with the established procedure to improve the activities of the Fund;

Concludes agreements with the Central Bank of the Republic of Uzbekistan on the trust management of the Fund's free balances;

Performs other functions related to the implementation of the tasks assigned to the Fund.

III. Management of the Fund

11. The Fund Management Council is the highest governing body of the Fund, the composition of which is approved by the President of the Republic of Uzbekistan.

12. The Fund Management Council:

Develops the main areas of the Fund's activities;

Adopts a decision on revising the declared authorized capital of the Fund, but it should not be lower than the level established by the Decree of the President of the Republic of Uzbekistan “On the Establishment of the Fund for Reconstruction and Development of the Republic of Uzbekistan” No. PF-3751 dated May 11, 2006;

Considers the forecasts of the inflow and use of funds to the Fund and submits them for approval in accordance with the established procedure in connection with the main parameters of macroeconomic and monetary indicators for the next year, the State Budget and state development programs;

makes decisions on the terms and conditions of providing the Fund's funds to commercial banks for refinancing (co-financing) of borrowed enterprises, approves the exact amounts of interest rates on funds provided by the Fund based on interest rates prevailing in international capital markets;

makes decisions on the terms and conditions of providing preferential loans to finance projects for the development and restoration of production infrastructure for the placement of new industrial production in the future, primarily in rural areas;

makes decisions on allocating funds to the Ministry of Finance of the Republic of Uzbekistan for the early repayment of obligations to international financial institutions and foreign creditors on the state's external debt;

makes decisions on investing from the Fund's funds in the authorized capital of newly established financial institutions and enterprises of strategic importance with the participation of foreign investments in basic sectors of the economy;

makes decisions on allocating grants and interest-free loans for the development of preliminary or final feasibility studies of individual projects;

adopts decisions on granting preferential loans in accordance with the resolutions of the President of the Republic of Uzbekistan for the purchase of new modern foreign technologies, machinery and equipment, and other goods of strategic importance in accordance with approved state programs;

exercises control over the activities of the Executive Directorate of the Fund, in particular, the targeted allocation of the Fund's funds, the timely opening of financing to commercial banks and ensuring the return of funds granted to them;

regularly hears reports from the Executive Director of the Fund on the use of the Fund's funds and from the heads of interested ministries, departments and organizations on measures aimed at ensuring the effective use of the Fund's funds by the enterprises that have borrowed;

attracts highly qualified specialists in the field of asset management, expertise and financing of investment projects to the Fund.

13. The Executive Directorate is the executive body of the Fund, the composition and number of which are determined in accordance with the established procedure.

14. The expenses related to the activities of the Executive Directorate of the Fund are covered from the Fund's funds based on the cost estimate approved by the Fund Management Council.

15. The Executive Directorate:

Develops forecasts of the inflow and use of funds to the Fund;

Provides financial resources to commercial banks on a term, installment and repayment terms for refinancing borrowing enterprises;

Concludes agreements on granting preferential loans to finance projects for the development and restoration of production infrastructure for the placement of new industrial production in the future, primarily in rural areas;

Allocates funds to the Ministry of Finance for the early repayment of obligations to international financial institutions and foreign creditors on the state's external debt;

invests funds from the Fund in the authorized capital of newly established financial institutions and enterprises of strategic importance in the basic sectors of the economy with the participation of foreign investments;

concludes agreements on the provision of grants and interest-free loans to project initiators to develop preliminary or final feasibility studies for individual investment projects, with the amount of the allocated loans subsequently added to the total cost of the project and, if the project is implemented by attracting a loan from the Fund, to the total cost of the allocated loan;

provides preferential loans for the purchase of new modern foreign technologies, machinery and equipment, and other goods of strategic importance in accordance with approved state programs in accordance with the resolutions of the President of the Republic of Uzbekistan;

systematically monitors the targeted and effective use of the Fund's funds, the timely return of funds transferred to commercial banks;

monitors the activities of borrower enterprises on the fulfillment of their obligations under the Fund's loans by them, having the right to receive any information on the status of accounts opened in commercial banks and the operations carried out on them.

develops a report on the implementation of the Fund's income and expenses and, after approval by the Fund Management Council, submits it to the Ministry of Finance of the Republic of Uzbekistan, the Ministry of Economic Development and Poverty Reduction, and the Accounts Chamber within the established deadlines.

16. The Executive Director of the Fund is appointed and dismissed by the Cabinet of Ministers of the Republic of Uzbekistan, and is equated in status to a deputy minister;

17. The Executive Director of the Fund:

Organizes the activities of the Executive Directorate in accordance with the tasks and functions assigned to the Fund and is personally responsible, forms the staffing table of the Executive Directorate within the established limited total number of employees, signs credit, business and labor agreements on behalf of the Fund;

In agreement with the Fund Management Council, organizes inspections in accordance with the established procedure on the purposeful and effective use of the Fund's funds, considers their results and makes decisions on them, and takes necessary measures to eliminate the identified shortcomings;

exercises other powers stipulated by law.

18. A group of highly qualified experts responsible for issuing conclusions or recommendations on financing relevant projects shall be established within the Fund's apparatus.

IV. Sources and procedure for the formation of the Fund's funds

19. The sources of the Fund's funds shall be:

Funds received as a result of an increase in world prices above the threshold price established for strategic resources by the resolutions of the President of the Republic of Uzbekistan at the time of approval of the forecast of the main macroeconomic indicators of the Republic of Uzbekistan and the parameters of the State budget;

Funds received in excess of the volumes taken into account when forming the State budget revenues of the Republic of Uzbekistan when selling state property to foreign investors for foreign currency;

Income from the management of the Fund's assets, including from the placement of free balances of the Fund's funds;

Other sources in accordance with the legislation.

20. The Fund's funds are formed in foreign currency in its accounts opened with the Central Bank of the Republic of Uzbekistan.

The Central Bank of the Republic of Uzbekistan converts the funds in the national currency received by the Fund into foreign currency at the current exchange rate established during the trading sessions of the Republic of Uzbekistan Currency Exchange on the date of their receipt and transfers them to the Fund's currency account.

21. Transfer of funds for certain types of taxes and fees to the Fund's account is carried out in accordance with the established procedure.

22. The sources of income from the Fund's funds and their use are annually included in the state development programs of the Republic of Uzbekistan in the established procedure and reflected in the Fund's balance sheet.

V. Procedure for using the Fund's funds

23. The Fund's funds shall be used for the following purposes:

a) financing of particularly important projects included in state development programs, primarily in the fuel and energy complex, chemical industry, mechanical engineering, non-ferrous metallurgy and other basic sectors of the economy, as well as in the transport and telecommunications sector, including co-financing of the Republic of Uzbekistan's share in projects with the participation of international and foreign financial institutions;

b) granting preferential loans, including from the State Budget, to finance projects for the development and restoration of production infrastructure for the placement of new industrial production in the future, primarily in rural areas;

c) investing in the authorized capital of newly established financial institutions and enterprises of strategic importance with the participation of foreign investment in basic sectors of the economy;

g) early repayment of obligations to international financial institutions and foreign creditors on the state's external debt;

d) accelerated financing and implementation of investment projects through credit lines opened in foreign currency to commercial banks within the framework of modernization, technical and technological re-equipment programs approved by the President of the Republic of Uzbekistan;

e) financing the development of initial or final feasibility studies of individual projects on a grant basis or by allocating interest-free loans;

j) granting preferential loans for the purchase of new modern foreign technologies, machinery and equipment, as well as other goods of strategic importance in accordance with approved state programs;

z) financing socially significant national state programs and projects on the formation of production and non-production infrastructure, primarily in promising but insufficiently developed regions, within the approved parameters of the State Budget and state development programs, on a grant basis (co-financing);

i) jointly with commercial banks to co-finance investment programs (business plans) of borrowing enterprises, including projects that allow for the technical re-equipment of production, increased utilization of production capacities, increased production volumes and export of competitive products, and increased added value;

k) to cover expenses related to the management and maintenance of the executive apparatus of the Fund.

24. The term and conditions for providing funds are determined by the decision of the Fund Management Council. The interest rate on credit resources provided by the Fund is set in differentiated amounts up to 6 percent per annum.

The Fund's credit resources are allocated in foreign currency specified in the agreement.

The maximum margin of a commercial bank is determined separately for each project in the loan agreement concluded between the Fund and a commercial bank.

In cases of delay in the repayment of allocated funds by commercial banks, a penalty of 0.01 percent of the amount of debt on overdue payments (not exceeding 10 percent of the amount of borrowed funds) is charged for each day of delay.

Advance payments under import contracts co-financed from the Fund's funds are, as a rule, made by the supplier to the refinancing commercial bank upon presentation of a guarantee issued by a first-tier foreign bank for the repayment of the advance payment.

25. The amount of credit funds allocated to commercial banks is determined on the basis of their applications, and these applications reflect the total amount of funds for projects approved by the commercial bank for the loan of borrowing enterprises.

The amount of credit provided to commercial banks for each project (modernization, reconstruction or technical re-equipment of production) should not exceed 75 percent of the total project cost.

Loans to borrowing enterprises (organizations) are provided in accordance with the Regulations on the conditions for selecting investment projects for financing from the funds of the Fund for Reconstruction and Development of the Republic of Uzbekistan, approved by the Fund Management Council, the procedure for consideration and examination, as well as documents of the Central Bank of the Republic of Uzbekistan and other legislative acts.

26. The term for consideration of applications of commercial banks by the Fund Management Council should not exceed 30 days from the date of receipt of the application. During this period, the Fund Management Council shall issue a positive decision on financing the project proposed by the commercial bank or shall issue a written reasoned refusal to the commercial bank.

27. After receiving the positive conclusion of the Fund Management Council, the Executive Directorate of the Fund shall conclude a loan agreement with the commercial bank within 5 working days.

The loan agreement shall reflect the amount of credit resources provided to the commercial bank, the interest rate and purpose (direction), term and conditions, as well as the rights and obligations of the parties in accordance with the requirements of the legislation, and other issues.

28. The term for consideration of applications by the Fund Management Council of the Ministry of Finance of the Republic of Uzbekistan and the Ministry of Economic Development and Poverty Reduction shall not exceed 15 days from the date of receipt of the application.

After the Board has made a positive decision on the management of the Fund, the Executive Directorate of the Fund, within 5 working days, in accordance with the submitted application and the Board's decision, shall:

1) With the Ministry of Finance - an agreement on the allocation of funds for the purposes specified in the application and these Regulations on a non-repayable basis;

2) With the Ministry of Economic Development and Poverty Reduction and the initiator of the relevant project - an agreement on the allocation of funds on a grant basis or an interest-free loan for the purposes specified in the application and these Regulations.

29. Temporary free funds of the Fund shall be transferred to the Central Bank of the Republic of Uzbekistan for trust management in accordance with the established procedure for their placement in first-rate international financial instruments.

The total volume of free balances of the Fund's funds shall be at least forty percent of its total assets.

The Central Bank of the Republic of Uzbekistan shall submit to the Fund Management Council on a quarterly basis information on the results of the prudent management of the Fund's funds, including the profitability of operations, the amount of income received during the reporting period, the composition of the Fund's portfolio of invested funds, and the current state of interest rates.

VI. Preparation, review and approval of the forecast of the inflow and use of funds to the Fund

30. The Executive Directorate of the Fund shall annually develop a draft forecast of the inflow and use of funds to the Fund for the next calendar year based on preliminary data received from the Ministry of Finance of the Republic of Uzbekistan, the Ministry of Economic Development and Poverty Reduction, the Central Bank, commercial banks and other agencies and systematic monitoring conducted during the reporting period, and submit it for approval to the Fund Management Council.

31. The preparation, consideration and approval of forecast projects for the receipt and use of the Fund's funds shall be carried out in close connection with the development and approval of the parameters of the State Budget of the Republic of Uzbekistan and state development programs for the next year.

(The first paragraph of paragraph 31 as amended by the Decree of the President of the Republic of Uzbekistan No. PF-5370 dated March 6, 2018 - National Database of Legislative Documents, 06.03.2018, No. 06/20/5370/0975)

In order to eliminate the impact of higher than forecast revenues generated as a result of favorable prices on world markets for the Republic's strategic resources on the volume of the money supply and the level of inflation, the upper limit for the use of the Fund's funds shall be developed and approved based on the forecast parameters of the main macroeconomic and monetary indicators.

32. The forecasts of the Fund's inflows and use shall reflect the following for the forecasted year as a whole, including by quarter:

including the total volume of inflows from each source;

expenditures on financing priority investment and socially oriented projects, investment programs of borrowing enterprises, servicing long-term loans and investments received, and allocating funds to cover expenses related to the financial support of the activities of the Executive Directorate of the Fund.

VII. Rights and obligations of the Fund

33. The Fund's rights:

a) to conduct inspections of the targeted and effective use of the Fund's funds in commercial banks and organizations that have borrowed;

b) Obtain from commercial banks the information necessary for monitoring the targeted use of the Fund's funds, including the status and forecast of the use of funds allocated by the Fund, and other information;

c) Consider the primary feasibility of projects, including the involvement of highly qualified independent experts and industry specialists to monitor and verify the targeted and effective use of the Fund's funds.

34. Responsibilities of the Fund:

a) In accordance with the assigned tasks:

Carry out work aimed at attracting and accumulating the Fund's funds;

Ensure that the Fund's funds are directed to clearly defined goals.

b) Submit quarterly and annual reports to the Fund Management Council in accordance with the established procedure and deadlines.

VIII. Responsibility for the targeted use of the Fund's funds and their control

35. The Executive Directorate of the Fund is responsible for the strictly targeted and legal allocation of the Fund's funds, as well as for maintaining accounting records and compiling reports on the Fund's activities.

36. Commercial banks are responsible for the correct and targeted use of the Fund's funds and their timely return.

37. The Executive Directorate of the Fund constantly monitors the targeted allocation of the Fund's funds in accordance with the established procedure.

In case of detection of cases of misuse of the Fund's funds by commercial banks, the total amount of funds used for the wrong purpose shall be recovered ahead of time and transferred to the Fund's account, and the penalties established in the agreement concluded between the Fund and the commercial bank shall be applied.

38. Control over the legal and strictly targeted allocation of the Fund's funds by the Executive Directorate of the Fund shall be exercised by the Fund Management Council.

39. An annual audit of the Fund shall be carried out by an independent international auditor, and the formation and use of the Fund's funds shall be checked by the Accounts Chamber of the Republic of Uzbekistan.

40. Fund's funds not returned on time by commercial banks shall be recovered in accordance with the procedure established by law.

41. The Fund shall be reorganized and liquidated in accordance with the procedure established by law.