IFC Converts $35M Loan Into Ipoteka Bank Equity Stake

Tashkent, Uzbekistan (UzDaily.com) — The International Finance Corporation has converted a $35 million pre-privatization loan into an equity stake in Ipoteka Bank OTP Group, completing a transaction that marks one of the most concrete milestones yet in Uzbekistan's decade-long push to transform a banking sector once dominated overwhelmingly by state capital.

The conversion, jointly announced by IFC and Ipoteka Bank OTP Group, closes a chapter in a partnership that dates to 2016, when IFC entered the relationship at the invitation of the Uzbek government as part of its state bank privatization program. Over the intervening years, IFC provided advisory support on corporate governance, business strategy development, and pre-privatization preparation — laying the institutional groundwork that made the equity conversion possible.

How the Deal Worked

The $35 million convertible loan was structured with conversion contingent on the bank meeting agreed transformation milestones. With all obligations fulfilled, the loan has now been exchanged for an ownership stake — a mechanism designed to align IFC's financial interests with the bank's reform performance and give the institution a credible, milestone-driven incentive structure rather than a straightforward debt obligation.

A Bank Transformed

Ipoteka Bank OTP Group is now part of OTP Group, one of Central and Eastern Europe's leading financial conglomerates, serving more than 3 million customers across a network of over 90 branches in Uzbekistan. The bank's integration into the OTP ecosystem represents precisely the kind of strategic foreign ownership that Uzbekistan's privatization program was designed to attract — bringing international management standards, capital, and retail banking expertise into a system that previously operated largely as a state-directed lending vehicle.

IFC's Broader Uzbekistan Agenda

Both parties described the conversion as confirmation of the bank's successful institutional transformation and a strengthening of mutual confidence. IFC signaled its intention to continue supporting the development of Uzbekistan's banking sector and expanding access to financing for entrepreneurs — an objective that aligns with its parallel engagements across the country's financial system, including support for SME lending and microfinance.

The transaction lands at a moment of intensive institutional activity in Uzbekistan's financial sector, with the EBRD simultaneously advancing bank privatization discussions at the sovereign level and the EIB opening a regional office in Tashkent to deepen infrastructure and capital markets engagement.