Tashkent, Uzbekistan (UzDaily.com) -- The 2021 Annual Meetings of the Islamic Development Bank (IsDB) Group, on the sidelines, also saw the official launch of the Economic Empowerment Fund for Uzbekistan (EEFU), the first ever impact investment fund to be established in the country. 

EEFU is the outcome of a strategic partnership between the Islamic Development Bank (IsDB), the Government of the Republic of Uzbekistan (GoU) and Saudi private sector players with an initial target capital of US$100 million. 

The Fund aims to provide an accessible investment platform where Micro, Small & Medium Enterprises (MSMEs), social entrepreneurs and cooperatives in Uzbekistan can obtain financial and non-financial assistance for the development of their business enterprises. 

The Government of Uzbekistan will contribute by 35% to the initial US$ 100 million fund size (i.e US$ 35 million), the IsDB will contribute by 20% (i.e US$ 20 million) and the remaining 45% (US$ 45 million) will be mainly mobilized from various Saudi investors. Upon successful launching of the pilot phase, the initial fund size of US$100 million is expected to gradually increase to US$500 million. 

EEFU aims to set up an attractive and efficient platform to provide adequate financial and non-financial support for the development of MSMEs, social entrepreneurs and cooperatives in Uzbekistan by implementing the Economic Empowerment approach. The ultimate goal of the Fund is to foster widespread economic empowerment in Uzbekistan by targeting the bottom of the economic pyramid through involving the marginalized populations in productive projects across entire value chains locally. 

The Fund will complement the efforts of the Government of Uzbekistan for job creation and poverty alleviation. Indeed, the Fund is expected to create over 102,000 direct job opportunities and support more than 34,000 MSMEs, Social Entrepreneurs and Cooperatives of which at least 50% will target Women and Youth led enterprises.

It will further contribute in supporting the government’s efforts to address the adverse socio-economic impact of the COVID-19 pandemic by specifically enabling quick recovery of underserved MSMEs, Social Entrepreneurs and Cooperatives 

EEFU will be equipped with an annexed Technical Assistance (TA) facility to bring additional support and address major non-financial constraints faced by prospective beneficiaries including business engineering, capacity building programs, access to market, building partnerships, etc.   

In order to efficiently channel the proceeds to the target end-users (i.e underserved MSMEs, Social Entrepreneurs and Cooperatives), the EEFU will intervene through a blended asset classes including Line Finance, direct Murabaha like financing and Equity participation.