Uzbekistan attracts funds from ADB to renew the fleet of electric locomotives

Tashkent, Uzbekistan (UzDaily.com) -- Uzbekistan Temir Yollari (Uzbekistan Railways) plans to update its fleet of electric locomotives.

The company published a draft resolution of the Cabinet of Ministers “On measures for the implementation of the investment project “Renovation of the locomotive fleet through the acquisition of locomotives” with the participation of the Asian Development Bank”.

According to the document, Uzbekistan Temir Yollari developed a feasibility study of the project “Renovation of the locomotive fleet through the acquisition of locomotives” with a total value of US$226.14 million.

The document said in May 2019, the Board of Directors of the Asian Development Bank (ADB) approved a loan to the Republic of Uzbekistan as part of a project to improve the efficiency of railways for the implementation of the investment project “Renovating the locomotive fleet by acquiring locomotives” in the amount of US$170.0 million from ADB’s ordinary capital resources.

The loan was issued for 25 years, including a five-year grace period, with an interest rate of six-month LIBOR plus 0.5 percent per annum and payment of a commitment fee of 0.15 percent of the untapped loan amount.

The project will be implemented in 2019-2021. The ADB loan is granted to the Republic of Uzbekistan on the basis of a loan agreement between the Republic of Uzbekistan and the ADB.

The contribution of the Republic of Uzbekistan to the project is equivalent to US$56.14 million, including US$45.06 million in the form of tax and customs benefits, as well as at the expense of own funds of  Uzbekistan Railways equivalent to US$11.08 million.

Acquired goods within the framework of the investment project are exempt from customs duties (except for customs duties), value added tax, fees to state trust funds, legal entities - non-residents of the Republic of Uzbekistan - from income tax on legal entities, individuals - non-residents of the Republic of Uzbekistan - from paying personal income tax.