Presentation of Uzbekistan’s 2005-2006 Privatization Program

Privatization or changing the form of ownership is one of the key priorities of economic reforms being implemented by the Government of Uzbekistan. It covers all industries and sectors of economy. The basic mechanisms of reforming property relations is privatization of the state owned enterprises, encouragement of independent development of new private sector, attraction of private foreign investments.

A consistent work conducted on privatization of state property has contributed to creation of multi structural economy in Uzbekistan. As a result of this work ownership form of about 130 thousand enterprises, entities and property has been changed. 51804 state entities were privatized during 1992 - 2000.

At the first stage of economic reforms (1992-1993) the privatization of state owned houses, small and medium enterprises in field of retail trade, food, construction and other services was completed. It allowed to form 52268 private owners.

At the second stage (1994 - 1996), through a wide-scale privatization in all industries (except the major ones) including agriculture the class of real property-owners was formed. It consisted of 2 million shareholders of privatized enterprises, 3 million owners of personal household plots, 85 thousand owners of private and small enterprises and 14 thousand of real estate owners.

Since 1998 the privatization of industrial giants, enterprises in oil and gas sector, chemical, metallurgical and machine-building industries is being conducted, and starting from 1999 it's carried out with wide attraction of foreign capital.

It is envisaged individual approach in changing ownership form of largest, strategic enterprises of the country's economy with attraction of international technical and financial consultants. In the course of denationalization the great attention has been paid to ensure the most effective utilization of property, achievement the best economic performance of privatized entities, wide attraction of foreign investors.


In spring 2003 the GOU adopted Resolution "On the Program of denationalization and privatization of enterprises in 2003-2004". Purpose of the Resolution is further deepening the privatization, sharp reduction of state share in charter capital of enterprises, increasing investment attractiveness of the objects, specifically for foreign investors.

Under the Program 3728 state owned enterprises to be privatized. The enterprises have been graded in the following five groups:

First group - complete sale of the state shares in 1391 (37.3%) enterprises which have been previously privatized and the state has retained 25% or less of the shares;

Second group - complete privatization of the 645 (17.3%) state enterprises and entities with the state ownership of 50% or more through the stock exchange and over the counter market;

Third group - privatization of 683 (18.3%) enterprises with the retention of 25 - 50% of shares in the state ownership;

Fourth group - privatization of 644 (17.3%) economically strategic enterprises on the basis of the individual privatization schedule envisaging the sale of shares, first of all, to foreign investors with the retention of 51 and more percent of the shares in the state ownership;

Fifth group - "free of charge privatization" against investment commitment given by the investors of the 365 (9.8%) enterprises which in recent years have been in stagnant condition.


A foreign investor willing to invest in the Republic of Uzbekistan can buy shares and enterprises on the stock exchange and over-the-counter market.

Shares and enterprises can be acquired on the over-the-counter market through:

• Tenders where the sales price of enterprise (shares) is subject to bargaining;
Investment Tenders where enterprise and shares are being acquired by foreign investor with taking investment obligations on technological re-equipment of enterprise and renovation of production. Investment obligations might be taken as a mean of payment for shares in hard currency or as an addition to it.

GOU has created a Case-by-Case Privatization Bureau (CCPB) to implement case-by-case privatization projects in the framework of the World Bank's Enterprise Institutional Building Loan. Case-by-Case privatization is a set of measures directed for the privatization of large companies in the country and intending to arrange pre-sale preparation of companies by hiring independent international finance consultants with the relevant experience and sound reputation. Case-by-Case privatization consists of the following phases: (à) preliminary evaluation of privatization; (b) price evaluation, development of the potential sale and restructuring schemes for companies; (c) sale of not less than 25% of company shares having considered selection criteria for a tender winner approved by the Government.