Construction in Uzbekistan - Key Trends and Opportunities (H2 2021)

Construction activities held up relatively well in the Uzbekistani construction industry in 2020. However, the industry’s growth decelerated from 22.9% in real terms in 2019 to 9.2% in 2020, owing to the disruption caused by the Coronavirus (COVID-19) outbreak, and the subsequent lockdown measures imposed to control its spread. Construction activities remained stable in the first three quarters of this year, with the industry’s value add expanding by 4.5% year on year (YoY) during the period, according to the State Committee of the Republic of Uzbekistan on Statistics. The industry’s growth in the first three quarters of 2021 was supported by the easing of lockdown restrictions, coupled with an improvement in manufacturing activity and investments on transport infrastructure. The analyst expects the construction industry to have recorded growth of 3.6% in 2021, and to record an average annual growth of 4.6% between 2022 and 2025, supported by the government’s investment on renewable energy, transport infrastructure and residential projects.

In October 2021, Shavkat Mirziyoyev was re-elected as the president of Uzbekistan, for his second five-year term. As part of his election program, Mirziyoyev announced the five-year ‘New Uzbekistan’ strategy, to reduce poverty, develop the digital economy and improve governance. The strategy includes a plan to attract UZS1.3 quadrillion (US$120 billion) of foreign and domestic investment over the next five years, including UZS765.1 billion (US$70 billion) in foreign investment. The Public Private Partnership (PPP) model is expected to attract investment worth USZ153 billion (US$14 billion) in transport, road construction and water management services. To support infrastructure construction, the ‘Uzbekistan Development Bank’ will be established to provide financial support for infrastructure projects. The strategy also includes a plan to improve industrial production and labor productivity over the next five years. A system of industrial clusters will be developed in key industries, focusing on activities from procuring raw materials to producing products. For instance, a copper industry cluster will be formed, to double the production of copper and other products over the next five years.

Forecast-period growth in the industry will also be supported by investments in the energy and utilities sector, in line with the anticipated rise in electricity demand. According to the government’s estimates, electricity demand is expected to rise from 61TWh in 2018 to 100TWh by 2030. In June 2021, the World Bank approved the Electricity Sector Transformation and Resilient Transmission Project, to improve the performance of the National Electric Grid of Uzbekistan (NEGU). The project will be supported by a UZS4.6 trillion (US$423 million) loan from the International Development Association (IDA) and the Green Climate Fund (GCF) and will help in modernizing Uzbekistan’s outdated energy infrastructure. The project includes the rehabilitation, upgradation, and expansion of 22 existing obsolete high-voltage substations, along with the construction of a new 500kV transmission substation and associated transmission lines in 11 regions of Uzbekistan.

In October 2021, the Asian Development Bank (ADB) reaffirmed its support for Uzbekistan’s development and recovery from the COVID-19 pandemic. The ADB also reiterated its plan to accommodate Uzbekistan’s needs for development finance, with a robust pipeline for 2022; this includes the construction of a range of projects through public-private partnerships.

This report provides detailed market analysis, information, and insights into the Uzbekistani construction industry, including:

• The Uzbekistani construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Uzbekistani construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Uzbekistan. It provides:

• Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Uzbekistan, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using the analyst's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using the analyst's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.