World Bank Approves $150M for Uzbekistan Rural Upgrade

Tashkent, Uzbekistan (UzDaily.com) — The World Bank's Board of Executive Directors has approved $150 million in concessional financing for the second phase of Uzbekistan's Rural Infrastructure Development program, scaling up an initiative that has already delivered roads, schools, and utilities to roughly one million people across the country's rural mahallas.

The funds will be channeled through the International Development Association, the World Bank's concessional lending arm, and will be administered by Uzbekistan's Ministry of Economy and Finance. Phase 2 will cover 296 mahallas across six regions: Andijan, Fergana, Namangan, Jizzakh, Syrdarya, and Tashkent.

Phase 1 Delivered Over 900 Projects

The program traces its origins to a 2019 government initiative backed by the World Bank and the Asian Infrastructure Investment Bank (AIIB). By the time Phase 1 concluded in June 2026, it had financed more than 900 infrastructure projects across 306 mahallas in five regions. On the ground, that translated into over 340 roads, 220 electricity supply facilities, 160 water supply systems, around 100 schools, 40 preschools, and 10 bridges — improvements that reached approximately one million rural residents, half of them women.

A $340 Million Phase 2

The total budget for the second phase stands at $340 million. Alongside the World Bank's $150 million contribution, AIIB will provide $120 million and the Uzbek government will contribute $70 million — a co-financing structure that distributes both risk and ownership across multilateral and sovereign stakeholders.

By 2031, the program is expected to improve transport infrastructure, drinking water systems, electricity supply, and other public services for approximately 1.2 million rural residents, including 600,000 women and 300,000 young people.

Beyond Bricks: Business Centers and Jobs

World Bank Central Asia Regional Director Naji Benhassine framed the new phase as going beyond physical infrastructure, noting it is oriented toward the needs of mahalla residents and encompasses support for entrepreneurship and rural employment.

A concrete expression of that broader mandate is the planned creation of business development centers in 15 pilot mahallas. These centers will help entrepreneurs in agricultural processing and small-scale manufacturing gain access to financing, develop business skills, and expand their markets. The initiative is expected to generate around 1,500 direct jobs directly, while the World Bank estimates that in combination with other agricultural development and MSME support projects, the program could contribute to the creation of approximately 25,000 new and better-paying jobs across participating mahallas.

A defining feature of the program across both phases is community-driven governance: local residents participate in selecting infrastructure projects and overseeing their implementation through mahalla development groups, with women required to constitute at least half of each group's membership.