Uzbekistan Capital Markets Explored at Avesta Forum

Tashkent, Uzbekistan (UzDaily.com) — Ten years ago, the word "Uzbekistan" barely appeared in conversations among international investors regarding debt markets. Today, London and New York institutional funds oversubscribe Uzbek issuances five times over, Georgian investment banks open offices in Tashkent, and the country's first institutional private equity fund announces the closing of its first tranche.

This contrast between the past and the present became the main theme of the Avesta Capital Markets Day 2026 forum, which took place on 18 June 2026 in the Firdavsiy conference hall at the Holiday Inn hotel in Tashkent. The forum was organized by Avesta Investment Group, an investment house recognized as the best investment bank in Uzbekistan by the Euromoney Awards for Excellence 2025. For nearly four hours, discussion participants—including investors, issuers, and representatives of international financial institutions—analyzed the current stage of the Uzbek capital market and what separates it from the next level.

The consensus among participants was that while infrastructure and demand exist, a structural gap remains due to a weak institutional investor base, state dominance in the banking sector, and a shortage of well-prepared issuers.

Sadjida Tashpulatova, the head of IFC programs in Turkmenistan and Uzbekistan, began her presentation by noting that the IFC portfolio in Uzbekistan currently stands at approximately US$1 billion, a result achieved in less than a decade of active work in the country.

The IFC, a member of the World Bank Group, works to develop the private sector in developing countries. When the organization began expanding its presence in Uzbekistan after 2017, it found that finding money was not difficult, as international institutions were ready to invest. The issue was a lack of structured, bankable projects in the country.

Energy serves as a clear example of this work. A few years ago, the entire sector from production to distribution was state-owned, and private investment was legally impossible. The IFC, together with the World Bank, helped implement reforms that opened the market to private capital and structured the first deal: the construction of a 100 MW solar power plant involving a private investor, Masdar, and international lenders. This was followed by the first wind power plant and the first energy storage system. By 2030, the share of renewable energy in Uzbekistan's energy mix is projected to reach 54%, up from zero at the beginning of this process.

Half of the IFC portfolio in Uzbekistan is currently in the energy sector. A significant portion of the remainder is in the financial sector, with clients including SQB, Hamkorbank, and TBC Bank. The IFC has also taken equity stakes in Hamkorbank, TBC Bank, and Ipoteka Bank, converting a previously issued loan into equity in the latter case. Convertible debt also exists in SQB, and Tashpulatova did not rule out its conversion under favorable developments.

Tashpulatova highlighted the narrow investor base as a structural problem. The capital market in Uzbekistan relies heavily on banks, whereas mature systems feature significant participation from insurance companies and pension funds. The country's pension fund has a limited appetite for risk and prefers deposits. The state's share in banking sector assets exceeds 60%, and the banking sector itself forms about 95% of the entire financial system. To address this, the IFC participated in drafting a capital markets bill for Uzbekistan, which is currently with the presidential administration awaiting submission to parliament. The law will create legal mechanisms for securitization, covered bonds, and mortgage market development.

Mukhiddin Zhumagaldiev, the head of treasury at UzMRC, represented an organization characterized as the largest corporate bond issuer in the country. UzMRC raises financing through the capital market and directs it toward mortgage lending, connecting the banking sector with the long-term debt market. Under its registered bond program, the company plans to place an additional 100 billion soums by the end of 2026, with a target of at least 1–1.5 trillion soums in 2027. Zhumagaldiev did not rule out transitioning to public offerings for some issuances, which have previously been placed mainly through private placements.

Marianna Pomazkova, Chief Executive Officer of Xtellus Europe, who advises emerging market issuers entering international debt markets, noted that a window of opportunity currently exists for issuers before investor books become crowded with Uzbek credits. However, she identified three barriers limiting entry to the international market: managerial capacity, size requirements (most institutional investors do not consider issuances below US$200 million to US$300 million), and infrastructural limitations, as global custodians do not yet have direct access to the country.

Akbarkhon Ibrokhimov, deputy director of the department for financial institutions and investors at SQB, outlined the bank's evolution over six years. In 2019, the bank issued its first Eurobonds for US$300 million. In 2025, it placed an Additional Tier 1 (AT1) capital instrument, the first such issuance in Central Asia. When the book opened in October, demand reached US$300 million, exceeding the target fivefold. The issuance allowed the bank to increase its Tier 1 capital adequacy ratio by 3–4 percentage points and created a reserve to increase its credit portfolio by at least US$2 billion. SQB is also implementing its first syndication involving Chinese banks for approximately US$100 million and intends to issue sukuk bonds once the regulatory framework is finalized.

The equity capital session featured Galt & Taggart, an investment bank of the Georgian group Lion Finance Group listed on the London Stock Exchange since 2006, which has entered the Uzbek regulatory sandbox and is establishing a local presence. Ketevan Toidze, deputy chief executive officer of the company, noted that while the largest Georgian companies preferred listing on international venues and bypassed the domestic market, Uzbekistan's practice of dual listings on both the Tashkent Stock Exchange and international platforms creates an opportunity to develop the internal market alongside issuer growth.

Tamara Kakuria, executive advisor on capital markets funding strategy at Ipoteka Bank (OTP Group), shared insights from the bank's acquisition three years ago by the Hungarian OTP Group. Since then, the bank has undergone a restructuring of corporate governance, risk management, IT systems, and operational processes to meet EU standards. Kakuria noted that OTP is fully satisfied with the results and advised other Uzbek companies that a strategic partner can accelerate preparation for a public offering by bringing in immediate expertise.

Eldan Usubaqunov, managing partner of Highland Capital, spoke during the equity session. Two weeks prior to the forum, Highland Capital announced the first closing of its second fund, the Highland Capital Asia Fund II, with participation from the IFC and Synergol Fund for US$36 million. The target volume of the fund is US$75 million, of which 80% will be invested in Uzbekistan. The first fund, which had a volume of US$23 million, made 12 investments in consumer sector companies in Kyrgyzstan, yielding a 21% gross internal rate of return (IRR) in US dollar terms.

Highland Capital now intends to invest US$3 million to US$5 million into private companies in Uzbekistan that have at least five years of profitable operations in the healthcare, pharmaceutical, food, logistics, and retail sectors. Usubaqunov stated that Highland Capital structures its exits through founder buybacks due to a limited mergers and acquisitions market, while IPOs and trade sales remain a horizon for the next fund.