State of play of green finance in Uzbekistan: Opportunities for and barriers to green bond issuance

This article presents the potential role of green bonds in financing Uzbekistan’s green transition, the prioritysectors for green bond issuance and barriers that potential issuers face. Non-sovereign issuers, notably subnationalgovernments and corporate entities, face barriers in terms of the country’s existing regulatory requirements and persistentknowledge and expertise gaps, but there is considerable potential for the use of the instrument to finance these issuers’green projects. Other bond-like instruments, such as green sukuks, an Islamic fixed-income instrument, could proveeffective at mobilizing domestic demand and offer an alternative financing mechanism if regulatory hurdles to thedevelopment of Islamic finance in Uzbekistan are removed. The energy sector, particularly renewable power generationprojects, is the sector with the most potential for green bond issuances, but agriculture, transport, housing and watermanagement projects could benefit as well.