OPEC Fund Provides US$35 Million Loan To Enhance Food Security And Climate Action In Uzbekistan

The OPEC Fund for International Development is providing a US$35 million loan to Uzbekistan's Asaka Bank. This funding aims to improve food security and support climate action projects in the region. By enhancing access to finance for agriculture, the initiative seeks to bolster the bank's climate finance portfolio.

Abdulhamid Alkhalifa, President of the OPEC Fund, stated, "Our partnership with Asaka Bank supports two crucial priorities for Uzbekistan - ensuring food security and addressing climate change. Agriculture remains a cornerstone of the country’s economy and targeted investments in sustainable practices will help smallholder farmers build resilience and boost productivity. The new financing reflects our commitment to fostering economic growth while driving climate action."

Agriculture plays a vital role in Uzbekistan's economy, contributing 25 percent to the GDP and employing about a quarter of its workforce. The sector faces challenges like extreme weather, water scarcity, and limited financial access. Enhancing financial support for small-scale farmers can lead to significant benefits across the nation.

Asaka Bank plans to distribute the OPEC Fund's loan among small and medium-sized enterprises (SMEs) and agribusinesses. This will enable these entities to secure necessary financing for growth. Farmers and rural businesses will gain access to essential services, modern technology, and expanded market opportunities.

The OPEC Fund has been collaborating with Uzbekistan for 25 years, supporting nearly 30 public and private sector projects with a total loan volume of US$800 million so far. A Country Partnership Framework signed in 2024 allocates US$500 million in new financing from the OPEC Fund to advance Uzbekistan’s sustainable development goals until 2029.

This collaboration aims to strengthen productivity and resilience within the agricultural sector by facilitating access to critical resources. By adopting modern technologies, farmers can enhance their productivity while also building resilience against environmental challenges.

The ongoing partnership between the OPEC Fund and Uzbekistan underscores a shared commitment to economic growth through sustainable practices. By focusing on agriculture and climate action, this initiative aims to create lasting positive impacts on both local communities and the broader economy.

With inputs from WAM