Uzbekistan Targets US$11 Billion Electrical Equipment Output

Tashkent, Uzbekistan (UzDaily.uz) — President Shavkat Mirziyoyev reviewed a presentation on the further development of Uzbekistan’s electrical engineering industry, increasing the production of high-value-added goods and measures to support competitive enterprises.

In recent years, output in Uzbekistan’s electrical engineering sector has increased from 4.7 trillion soums in 2018 to 43.1 trillion soums. Exports have exceeded US$1 billion, while electrical products manufactured in the country are now supplied to 65 countries.

The structure of industry output is also changing. Production and exports of copper-based products are growing, while the share of lower-margin goods is declining. Domestic manufacturers currently meet 80% of demand for household appliances, with 30% of their output exported.

The country has also developed production of hundreds of new types of goods, including solar panels, high-voltage cables, electric vehicle charging stations, vacuum circuit breakers, high-voltage disconnectors and heat pumps.

In the first seven months of this year, industry enterprises produced goods worth 30 trillion soums, while exports reached US$706 million. During the period, 16 projects worth US$148 million were launched, creating 1,200 new jobs.

The target for the end of the year is to increase production to 51 trillion soums and exports to US$1.6 billion. A further 67 projects with a combined value of US$420 million are also scheduled to be commissioned.

Under the plans presented, output in the electrical engineering industry and related sectors is expected to reach US$11 billion by 2030, while exports are targeted at US$5 billion. The plans call for US$3 billion in investment and an increase in the share of added value in copper products to 35%.

Expanding the raw-material base is expected to be one of the drivers of growth. Uzbekistan currently produces more than 150,000 tonnes of copper cathodes annually. Following the launch of new capacity, production is expected to increase to 300,000 tonnes.

The development of renewable energy will also generate additional demand for electrical equipment. Plans call for the launch of solar and wind power plants with a combined capacity of 15 GW. This is expected to create a market for electrical equipment manufacturers worth about US$500 million in orders annually.

At the same time, the presentation highlighted challenges facing enterprises. Some companies lack sufficient collateral to obtain loans to replenish working capital. More convenient financial mechanisms are also needed for purchasing copper through the exchange, along with expanded guarantee instruments capable of attracting major international brands. Growth in residential construction, in turn, is creating additional opportunities to increase demand for electrical equipment.

A number of new financial support mechanisms have been proposed to address these issues. When purchasing copper raw materials, enterprises will pay 25% of the cost, while Uzsanoatexport JSC will cover the remaining 75%. Companies will be able to repay the funds within 90 days at an interest rate of up to 6% per year. US$50 million will be allocated to implement the mechanism.

When providing loans to enterprises, additional forms of collateral will also be permitted, including export contracts and insurance policies. Part of loans in national and foreign currencies issued for investment projects will be compensated over a three-year period.

Major international brands investing at least US$50 million in Uzbekistan’s economy will be offered tax incentives and ready-to-use buildings with the necessary infrastructure. The validity of tax and customs benefits for electrical engineering enterprises is proposed to be extended until 2030. Support for local industrial enterprises in related sectors will also continue.

Particular attention is being given to expanding export opportunities. Plans include establishing trading warehouses in foreign markets and simplifying procedures for product certification and overseas shipments. The country is also considering increasing exports of integrated technological solutions to Afghanistan, Mongolia, Kazakhstan and Iraq.

To promote innovation and research and development, the creation of a Research and Innovation Centre for the Fourth Industrial Revolution has been proposed. The centre will focus on digital modelling, testing and localisation of new products, prototype development and engineering services for enterprises.

Following the presentation, the president instructed officials to take measures to increase added value in the electrical engineering industry, develop the production of high-tech goods and materials, and integrate domestic enterprises into global value chains.