Tashkent, Uzbekistan (UzDaily.uz) — President Shavkat Mirziyoyev held a meeting with representatives of the electrical industry, entrepreneurs and investors working in the sector.
Over the past decade, the electrical industry has undergone significant changes. A total of US$2 billion has been invested in the sector, and 413 new production facilities have been commissioned. Production has been established for more than 100 new product categories, including household appliances, solar panels, electronic meters and high-voltage transformers.
As a result, the sector’s output reached 50 trillion soums this year, compared with 1.7 trillion soums in 2016. Investment amounted to US$600 million, while exports reached US$1.6 billion. Over this period, exports increased 14-fold.
The head of state noted that these figures did not yet reflect the sector’s full potential and stressed the need to accelerate its development.
Particular attention is being paid to increasing copper production, as copper is one of the main raw materials used in the electrical industry. The country commissioned its third copper concentrator plant this year. The project will increase copper production to 300,000 tonnes, with output expected to reach 500,000 tonnes by 2030.
Solar and wind power plants are being built across the country, energy storage capacity is being developed, and large-scale construction projects are under way in the regions. Over the next 10 years, projects worth US$450 billion are planned in cooperation with partners.
This creates a large and long-term market for electrical products. Uzbekistan has reserves of copper and critical minerals, talented young people, experienced entrepreneurs and investors ready to cooperate. The importance of combining these resources with new technologies and developments was highlighted.
The president stressed that the electrical industry’s next task was not only to expand production capacity but also to achieve a major technological breakthrough.
Energy storage capacity is planned to reach 4.5 gigawatts by 2030. Foreign partners are ready to use locally manufactured products in these projects, but some of the equipment they need is not yet produced in Uzbekistan.
Demand is also growing for video surveillance equipment in shopping centres, industrial facilities, residential buildings and on streets. Annual domestic demand for such products amounts to US$200 million and exceeds US$600 million when neighbouring markets are included. Digital Security in Bukhara and Samvision in Samarkand each produce 2,000 cameras annually using their own software.
The need to expand the number of such projects was highlighted.
The domestic market also has strong demand for ATMs. Uzbekistan purchased 9,000 ATMs last year, importing equipment worth more than US$50 million. Demand is expected to increase as the number of shopping and entertainment centres and new residential areas grows.
In this regard, officials were instructed to assess demand for ATMs, attract technology providers and investors, and explore opportunities to establish local production.
Similar opportunities exist in other areas: thin copper foil for energy storage batteries and electronics in Tashkent region; inverters and electric vehicle charging equipment in Jizzakh region; energy-efficient electric motors for water pumps in Namangan region; and uninterruptible power supply and cooling systems for servers in Karakalpakstan.
The meeting set the task of launching projects to manufacture higher-value electrical products: office equipment and finished cable assemblies in Andijan; servers, interactive panels and touch sensors in Tashkent; and electronic boards for televisions in Kashkadarya region.
The head of state noted that, alongside meeting domestic demand, Uzbekistan had an opportunity to increase exports of such products to US$5 billion.
The president called on more than 10 foreign investors and over 100 domestic entrepreneurs attending the meeting to take an active part in implementing new projects with high added value.
The country is building the foundations needed to develop high-tech manufacturing. Dozens of enterprises have emerged that produce technological equipment for the textile industry, metalworking, construction and other sectors. Microprocessor modules are manufactured at the Ohangaran Technopark, while a robot production project has been launched in Tashkent in cooperation with South Korean partners.
The expansion of such enterprises is expected to create an integrated ecosystem that supplies economic sectors with modern equipment, industrial robots and electronic products.
In this regard, a Future Technologies Centre will be established in Nurafshan. Companies operating at the centre will receive the same incentives as IT Park residents. Raw materials and components required to manufacture robots, electronics and technological equipment will be exempt from import duties. Income from research and development in these fields will also be exempt from tax.
A national platform called Yangi Sanoat (New Industry) will be developed to strengthen cooperation between scientific research and industry. It will connect researchers working on advanced technologies with industrial enterprises.
Officials have been tasked with adapting one research and development (R&D) centre or technopark in each region to new industrial sectors by 1 May and establishing facilities for product testing. These facilities will help strengthen cooperation between large enterprises and small businesses.
In addition, the relevant agencies have been instructed to prepare a draft decision on robotics development within two weeks and a comprehensive programme to support machine-tool manufacturing and the electronics industry by 1 March.
Over the next three years, 164 projects worth a total of US$11.6 billion are planned in the electrical industry and related emerging industrial sectors.
The sector’s development will focus on six main areas. These include 41 cable industry projects worth US$2.5 billion, 29 projects to manufacture transformers and pumps worth US$1.4 billion, and 45 projects in industrial robotics and machine-tool manufacturing worth US$3 billion.
The plans also include nine projects to produce electrical equipment for transport and electric vehicles worth US$650 million; 21 projects involving electronic components and microelectronics worth US$3.5 billion; and 19 household appliance projects worth US$600 million.
Responsible executives and major customers will be appointed for each area. They have been instructed to attract key investors and establish cooperation with research centres and technical universities.
The head of state noted that NURA Electric paid considerable attention to engineering development and dual education.
The company employs around 100 design and process engineers who put their developments into production. Another 50 students are enrolled in dual education programmes, receiving both salaries and practical experience.
It was emphasised that modern engineers, design specialists and scientific research were crucial to producing higher-value goods and advancing technology.
Currently, 20 students and researchers from technical universities are receiving training at electronics companies in South Korea. Their number is planned to increase to 100 in the near future.
Uzbek electrical manufacturers have begun working directly with international financial institutions. Tashkent-based Artikul Aziya and Maxcopper, Techno Cable Group and Vades Group from Tashkent region, and Andijon Kabel from Andijan have secured US$80 million from the European Bank for Reconstruction and Development (EBRD) to implement their projects.
The need to extend this experience and prepare other manufacturers to work with international financial markets was highlighted. The EBRD is ready to provide industrial enterprises with US$2–3 billion in financing and cover part of the costs of assessing their operations.
The state will cover the remaining expenses, including the costs of engaging international consultants. To this end, compensation of up to US$50,000 per company will be provided through the Trade Development Company.
Electrical products worth 10 trillion soums are purchased annually through public procurement in Uzbekistan.
Previously, entrepreneurs had to monitor procurement orders from state-owned enterprises across four or five separate platforms. A system has now been introduced in which all public procurement orders are displayed on a single platform.
In addition, three-year public procurement plans will be published in advance starting from 1 January. This will allow entrepreneurs to assess demand in advance, expand production, purchase new equipment and attract investors.
The practice of selecting products for public procurement solely on the basis of the lowest price will be revised. This is because the operating costs of cheaper imported products may prove significantly higher.
For example, a procurement test examined two transformers with a capacity of 40 kilowatts. The imported model was 400,000 soums cheaper than the domestically produced one. However, its energy consumption was 10% higher, while repair costs over its service life were four times greater.
In this regard, public procurement will introduce a life-cycle cost approach, which assesses the total costs of a product throughout its service life. In addition to the purchase price, this will take into account electricity, repair, maintenance and operating costs.
Companies manufacturing substations, transformers, electrical cabinets and high-voltage cables also offer construction and installation services.
However, the Shaffof Qurilish platform applies the same requirements to contractors working on energy projects as it does to companies involved in building construction. The technological specifics of the energy sector are not fully taken into account.
In this regard, officials have been instructed to establish a separate section for energy projects on the Shaffof Qurilish platform within one month and adapt contractor requirements to the specific needs of the sector.
Uzbekistan’s electrical manufacturers are also gaining experience in participating in public procurement tenders abroad. In particular, NURA Electric has won a US$2 million tender in Cambodia.
At the same time, obtaining bank guarantees for participation in large international tenders creates difficulties for entrepreneurs. For example, securing a US$10 million guarantee requires equivalent collateral.
The president stressed the importance of supporting companies with manufacturing experience, stable turnover and sufficient financial resources. Banks have been instructed to develop a simplified procedure for issuing guarantees based on an assessment of companies’ financial standing and communicate it to entrepreneurs within one month.
New mechanisms will be introduced to stimulate domestic demand for electrical products manufactured in Uzbekistan.
Currently, energy-related public-private partnership projects require the share of locally produced goods to account for at least 25%, including 70% for cable products.
These requirements will now also apply to investment projects worth more than US$10 million that receive certain tax or other incentives or obtain resources from the state at reduced prices.
A new financial mechanism will be introduced to stimulate sales of domestically produced household appliances and make these products more affordable for the population.
Banks plan to offer consumer loans at an annual interest rate of 18% for the purchase of refrigerators, washing machines, air conditioners and other household appliances manufactured in Uzbekistan.
This will expand families’ access to modern household appliances while increasing sales for local manufacturers.
The relevant agencies have been instructed to prepare the necessary calculations within two weeks and submit specific proposals on allocating affordable funding for these purposes through commercial banks.
During the meeting with foreign investors and domestic entrepreneurs, the president heard their proposals and initiatives.
