On November 25, 2020, an online workshop was held to present and discuss the possibilities for the introduction of a new financial instrument – "green" sukuk in Uzbekistan. The workshop was organized by the United Nations Development Program in Uzbekistan and the Capital Market Development Agency of the Republic of Uzbekistan in cooperation with the Islamic Development Bank and the UNDP Istanbul International Center for Private Sector Development (IICPSD). The event was attended by representatives of interested ministries and agencies, research institutions, commercial banks, the private sector and international partners.

The United Nations Development Program, as part of its joint initiative with the Capital Market Development Agency, is supporting the Government of Uzbekistan to explore the possibilities of introducing "green" sukuk in order to raise additional funding to achieve the Sustainable Development Goals (SDGs) and national development priorities in Uzbekistan. As a part of this initiative, the IICPSD prepared a Report on "Pre-feasibility study for the issuance of ‘green’ sukuk in Uzbekistan”.

Sukuk is a security based on the principles of Islamic law, where profitability is linked to the performance of the underlying assets. Unlike conventional bonds, sukuk involves the ownership of a share of the value of a specific tangible asset or a specific investment project. “Green” sukuk is a new type of sukuk that is used to finance environmentally sustainable projects, for example, in the area of renewable energy sources development, the introduction of energy efficient and resource-saving technologies, solid waste management and others.

The first part of the workshop was devoted to an overview of the global green bonds and sukuk market, as well as the experience of the first "green" sukuk issuances in Malaysia and Indonesia. Southeast Asia is currently playing a leading role in financing renewable energy projects using "green" sukuk instruments. In 2017, Malaysia issued the world's first corporate "green" sukuk worth of US $64 million to finance the construction of a solar power plant. In March 2018, the Indonesian government issued the very first sovereign "green" sukuk in US dollars. The five-year issuance raised funding in amount US $ 1.25 billion.

In the second part of the workshop, the IICPSD experts and their partners involved into the preparation of the Report presented the findings of their research, which in addition to a brief overview of the capital market in Uzbekistan, included recommendations on the introduction of "green" sukuk in Uzbekistan. As the first step it was suggested to create an appropriate regulatory framework for the issuance and introduction of “green” sukuk in the capital market. The IICPSD experts also identified the list of potential bankable projects in the area of agriculture, water management, energy sector with focus on renewable energy sources (for example: wind, solar or hydropower), construction of energy efficient housing, etc.

First Deputy Director of the Capital Market Development Agency, Mr. Tursun Makhkamov, expressed gratitude to the IICPSD researchers and the experts for their work on the feasibility study for the issuance of "green" sukuk in Uzbekistan that will contribute to the achievement of the national SDGs. The Capital Market Development Agency also made a presentation on the main provisions of the draft Resolution of the President of the Republic of Uzbekistan "On measures to introduce securities based on the principles of Islamic finance", which was recently submitted for wide discussion.

Based on the results and outcomes of the workshop, the practical recommendations were proposed on the next steps towards further promotion and successful introduction of the "green" sukuk initiative in Uzbekistan.