Tashkent, Uzbekistan (UzDaily.uz) — VTB is considering opportunities to participate in Uzbekistan’s infrastructure projects, including a high-speed railway between Tashkent and Samarkand, as well as public-private partnership (PPP) projects in healthcare. The issues were discussed at a panel session on PPP development in Uzbekistan and Russia, moderated by Alexander Kirevnin, managing director of VEB.RF.
Comparable markets with different sector priorities
Kirevnin said Uzbekistan’s PPP market had developed later than Russia’s, but the two countries were now comparable in terms of the number and value of projects.
Energy accounts for the largest share of Uzbekistan’s PPP portfolio. In Russia, roads lead by investment volume, while utilities and municipal infrastructure account for the largest number of projects.
According to Kirevnin, both markets are entering a new stage in which project quality matters more than the number of agreements. He also said around US$6.5 billion had been allocated to PPP projects in Uzbekistan in 2026.
"The fewer resources we have, the stronger the incentive for the public partner to use them efficiently. Russia is following a similar path," Kirevnin said.
Uzbekistan’s model: development finance and foreign investors
Vladimir Sokolov, director and head of the legal practice at PwC Uzbekistan, identified 2016 as a turning point for the country, when Uzbekistan began opening up more actively to the world and attracting foreign capital.
"Foreign investors are genuinely being competed for. In this respect, they are not necessarily the ones asking for opportunities; often, they are not asking at all," he said.
Sokolov said Uzbekistan lacked domestic sources of long-term financing and had limited budget resources. As a result, PPP development was proceeding along two main tracks.
The first involved projects that recover their costs through payments from consumers.
The second covered social projects that reduce government expenditure. Sokolov identified international development banks as the main sources of financing, including the Asian Development Bank, the World Bank, the European Bank for Reconstruction and Development and the Islamic Development Bank.
Energy remains a priority. Sokolov said Uzbekistan’s economy had grown by an average of 6–8% annually over the past decade, with electricity consumption rising alongside economic activity.
One example of a social PPP project is haemodialysis services in Karakalpakstan. According to Sokolov, foreign investors had been prepared to provide the service at prices one-third to one-half lower than the state.
Airports are another area of cooperation. Following projects in Samarkand and Urgench, the tender for Bukhara Airport has also been completed. Six bidders took part, with a Turkish-Qatari consortium selected as the winner.
Sokolov described Tashkent Airport as the largest project. It has reached commercial close, with investment estimated at US$4.5–5 billion.
He said eight or nine of Uzbekistan’s 13 international airports were suitable for PPP arrangements.
Among other major projects, Sokolov cited the proposed toll road connecting Tashkent with the Fergana Valley. According to his figures, the route carries around 40% of the country’s total traffic.
More than 90% of freight and approximately 98% of passenger transport in Uzbekistan is carried by road, he said.
Electricity distribution networks are another emerging area. Samarkand region became the first to transfer its distribution networks to a PPP arrangement.
District heating networks, including those in Bukhara, are expected to follow.
IT concessions are also developing rapidly. Sokolov cited the iHamkor platform, which he said was the first project in Uzbekistan to develop scoring systems based on tax and other government data.
The platform enables banks and companies to assess both corporate and individual counterparties. It operates under a profit-sharing model, allowing the government to generate revenue alongside the private partner.
"This is receiving considerable attention and is one of the main priorities," Sokolov said.
He also outlined the approval procedures for PPP projects in Uzbekistan.
Projects worth up to US$1 million can be approved by the public partner, such as a ministry or regional administration. Projects valued between US$1 million and US$10 million require approval from the Ministry of Economy and Finance.
Projects exceeding US$10 million are approved by the Cabinet of Ministers.
State-owned companies often act as public partners. In such cases, the Ministry of Economy and Finance signs a separate agreement with the company covering government support.
VTB: from airports to high-speed rail
Anton Novikov, representing VTB Infrastructure Holding, said the bank had been active in the PPP market for more than 20 years and had participated in some of the first concession agreements under St Petersburg legislation.
During that period, VTB had helped attract more than US$18 billion into infrastructure, he said.
Transport projects account for most of the bank’s portfolio, including airports, toll roads and regional concessions in Moscow, Nizhny Novgorod and other Russian regions.
The portfolio also includes social infrastructure, such as a campus in Chelyabinsk, although this represents a relatively small share. VTB is also a lender to the Moscow–St Petersburg high-speed railway project.
"We have always believed that railways can also be structured effectively as PPP projects. The key issue is how risks, including traffic risks, are allocated," Novikov said.
In Uzbekistan, the bank is interested not only in toll roads but also in railway projects, particularly a proposed high-speed line between Tashkent and Samarkand.
Novikov said Russia’s high-speed railway project was currently testing new technical solutions and rolling stock, and that this experience could be useful for Uzbekistan.
Energy and digital infrastructure
Novikov said new generation capacity in Russia’s energy sector had been built mainly under capacity supply agreements rather than concession arrangements.
However, concessions provide additional protection for investors. They also reduce banks’ capital requirements, making project financing more attractive, he said.
"Uzbekistan has gone further in this respect: several energy projects have already been implemented and are operational," Novikov said.
He added that energy had overtaken transport globally in terms of the size of the PPP market in recent years.
Demand for digital infrastructure, particularly data centres, was also growing rapidly.
Demand for healthcare projects
Novikov said Russia had relatively few healthcare PPP projects, while Uzbekistan was showing significant demand for them.
"At every meeting during this visit, there has been interest in building polyclinics and regional centres, upgrading hospital equipment and modernising regional children's hospitals," he said.
Risk allocation as the main factor
Discussing major road projects, Novikov distinguished between recovering the operating costs of a road and recovering the full investment in its construction.
He said a toll road could generate enough revenue to cover its operating expenses without necessarily recovering the entire construction cost.
As an example, he cited a proposed bridge to Sakhalin, which he said was strategically important for the country but would not be commercially self-sustaining.
"The main trigger in both Russia and Uzbekistan is a fair balance of risk allocation. No one wants to enter projects that are clearly heading towards default and will end in legal disputes. The second issue is profitability," Novikov said.
He also commented on the Tashkent–Samarkand road project, which is being built by a Chinese company under a deferred payment arrangement, without the company subsequently operating the road.
Such a model reduces the immediate burden on the state budget, but the government will still have to make the payments later, he said.
If the road subsequently becomes a toll road, the public partner will probably have to subsidise it to make the project financially viable, Novikov added.
He described Uzbekistan as one of the fastest-growing countries in the Commonwealth of Independent States.
The country needs transport, energy and healthcare infrastructure, he said, adding that VTB was ready to bring its experience in organising major infrastructure projects to Uzbekistan.
"We are ready to bring our experience in organising large infrastructure projects here. It is a complex puzzle that needs to be put together correctly," Novikov said.
Government guarantees and contingent liabilities
Sokolov agreed with Novikov's assessment of the importance of risk allocation.
"There are no investors willing to put billions of dollars into a project based solely on faith in traffic forecasts in a country that has not yet had a single toll road," he said.
According to Sokolov, World Bank statistics show that traffic forecasts tend to be overly optimistic.
He said Uzbekistan did not have sufficient resources to provide large grants to investors. Discussions were therefore under way on whether the government would limit its support to minimum revenue guarantees or offer investors more substantial guarantees.
Contingent government liabilities are a particularly important issue in Uzbekistan, Sokolov said. International development banks also recommend accounting for the liabilities of state-owned companies acting as public partners.
Conditions for investors in the electricity sector are already attractive, he added.
Electricity is purchased by a single state-owned company under contracts lasting more than 20 years. Under a presidential decree, prices in these contracts can be set in foreign currency, and the agreements are backed by sovereign guarantees.
As a comparison, Sokolov cited Kyrgyzstan, where 38 contracts had been signed but none of the corresponding generation capacity had yet been commissioned because the projects had not reached bankable terms.
