NEWS AND EVENTS
August 28, 2015
INVESTMENTS... Investment cooperation between the Republic of Uzbekistan and the ACG Funds
The Arab Coordinating Group (ACG) was established in 1975, with a view to advising its Funds on the optimum use of resources and the assistance rendered by various Arab development funds.
The Group’s first sitting was held on 20th September, 1975 on the invitation of the Kuwait Fund of Arab Economic Development.
Nowadays, the Arab Coordinating Group consists of 9 financial institutions, three of which are the national establishments, including the Kuwait Fund of Arab Economic Development, the Saudi Development Fund, the Abu-Dhabi Development Fund and five regional organizations: the Arab Fund of Economic and Social Development, the Islamic Development Bank, the OPEC Fund of International Development, the Arab Bank of Economic Development in Africa, the Program of the Gulf Arab Countries for the UN Organizations (AGFUND) and the Arab Currency Fund.
At present, the Republic of Uzbekistan cooperates with the following five ACG Funds: the Islamic Development Bank, the Kuwait Fund of Arab Economic Development, the Saudi Development Fund, the Abu-Dhabi Development Fund and the OPEC Fund of International Development.
The Islamic Development Bank (IDB) was set up on December 18th, 1973 at the first conference of finance ministries from the Islamic Conference Organization member states. The IDB started its activity on October 20th , 1975. Its capital is formed of the contributions made by the Bank’s member states. These days, it reaches US $150 billion.
The recently established IDB Group encompasses the following organizations:
The Islamic Corporation on Private Sector Development;
The Islamic Corporation on Insurance Investments and Export Credits;
The Islamic Research and Training Institute;
The International Islamic Trade-Finance Corporation.
The investments from the Islamic Development Bank were ploughed into the realization of 11 projects in Uzbekistan. As many as 15 more projects are now implemented in the Republic with the participation of the Bank’s investments in different spheres, such as construction of schools and hospitals, socio-economic development, modernization of industry, development of infrastructural facilities, agriculture, water-supply, road construction, public health, house-building, power engineering etc.
Moreover, Uzbekistan’s commercial banks are actively collaborating with the Islamic Corporation on Private Sector Development. As a result, over 170 projects are now being realized in the field of small and mid-sized business with the attraction of the Corporation’s credit lines.
The Islamic Development Bank also plays an important coordinating role in the development of cooperation between the Republic of Uzbekistan and the Arab Funds from the Arab Coordinating Group (the Saudi Development Fund, the Kuwait Fund of Arab Economic Development, the OPEC Fund of International Development and the Abu-Dhabi Development Fund).
The Kuwait Fund of Arab Economic Development (KFAED) was established on December 31st, 1961, six months after the proclamation of independence by Kuwait. The Fund’s charter capital approximates US $7 billion.
Cooperation between the Republic of Uzbekistan and the Kuwait Fund of Arab Economic Development started in 1997, with the signing of an agreement on financing a project to improve water-supply in the towns of Nukus and Urgench.
The Kuwait Fund of Arab Economic Development participated in the implementation of 4 projects in sectors such as healthcare, water-supply and electrification of railway sections. Today, the realization of 3 projects is financed by the Fund’s money resources in the fields of irrigation and drainage, road construction and public health. One healthcare-related project is under discussion to date.
The Saudi Development Fund (SDF) was set up in 1974, with the main line of activity being launched in 1975. At the moment of creation, the Fund’s capital reached 10 billion Saudi reals. At present, this indicator comes to 31 billion Saudi reals or US $8.27 billion.
Cooperation between the Republic of Uzbekistan and the Saudi Development Fund was initiated during a meeting of the Arab Coordinating Group’s members in Tashkent in July 2007. The Memorandum on Mutual Understanding signed there laid down the foundations for the further development of cooperation with the Saudi Development Fund.
In Uzbekistan, the Saudi Development Fund financed a project to construct and outfit new secondary schools. Nowadays, the implementation of several projects is under way with the SDF’s financial participation in the following sectors: water-supply, farming and public health. Work is in process on the elaboration of a house-building project.
The OPEC Fund of International Development (OPEC Fund) is an international financial institute created by its member states in 1976.
The Fund’s money resources are formed of the voluntary contributions made by its member states, which, in turn, are derived from the credit and investment operations carried out by the Fund. At the end of 2014, the contributions announced by the OPEC member states amounted to US $4.43 billion, of which US $3.46 billion was accounted for by the OPEC Fund’s direct contributions. The reserve account of the OPEC Fund of International Development worked out at US $2.62 billion.
The year 2000 marked the beginning of cooperation with the OPEC Fund, when the Republic of Uzbekistan and the OPEC Fund signed the Agreement on Encouragement and Protection of Investments.
Uzbekistan, in conjunction with the OPEC Fund, brought to completion 4 projects in the following sectors: the extension of credit lines to small and private businesses, modernization of railways, education and water-supply. One project is now under way in the field of irrigation and drainage. Another 3 projects to improve drinking water-supply are studied these days.
The Abu-Dhabi Development Fund (ADDF) was established on July 15th, 1971 as a leading state organization designed to render assistance to developing countries, in the form of credits extended on favourable terms, as well as to manage the use of grants on behalf of the government of Abu-Dhabi. The Fund’s charter capital comes to US $2.2 billion.
Following the 2nd meeting of the Intergovernmental Commission on Trade and Economic Cooperation with the United Arab Emirates held in Abu-Dhabi on March 1-2 of the current year, as well as the talks with the leaders of the Abu-Dhabi Development Fund, the two sides are studying details of the implementation of 4 projects in several sectors, including house-building, development of fruit- and vegetable-growing and water-supply.
Over the years of cooperation, the Funds of the Arab Coordinating Group have enticed significant money resources to Uzbekistan, to speed up the country’s socio-economic development, to modernize the manufacturing and to develop infrastructure, including the construction of schools, roads, bridges, power transmission lines, irrigation canals etc. The realization of the indicated projects has allowed Uzbekistan to quickly attain tangible results in the development of the national economy and improvement of the population’s well-being, including rural residents.
From time to time, Uzbekistan plays host to meetings of the Arab Coordinating Group, with the latest one convened on October 27th, 2014. As a rule, these meetings concentrate on the discussion of promising projects to be realized with the participation of the ACG members.
What’s more, the members of the Arab Coordinating Group take active part in various international conferences held in Uzbekistan, such as “Modern house-building as an engine of complex development and transformation of the countryside and improvement of the population’s quality of life” (April 2013), “On the major reserves of realization of the Food Program in Uzbekistan” (June 2014) and “The development of cooperation in the Aral Sea Basin to mitigate the consequences of ecological disaster”
(Source: «Business partner.uz» newspaper)