BAKU, Azerbaijan, August 25. Uzbekistan is accelerating its investment drive as the government seeks to expand industrial capacity, attract foreign capital and deepen the role of private investment in the economy. With 338.9 trillion soums ($28.6 billion) invested in fixed capital in the first half of 2026, a 17.5% year-on-year increase, and $32.9 billion in foreign investments and loans utilized in the period from January through July, the scale of capital formation is becoming a defining feature of the country's growth model.
The government is now moving beyond simply attracting investment. It is attempting to build the financial, industrial and human-capital infrastructure needed to turn inflows of capital into higher productivity, stronger exports and sustainable economic growth.
This shift is increasingly visible in the composition of investment. Manufacturing, construction and energy-related activities accounted for nearly half of fixed-capital investment in the first half of the year, while the government is simultaneously preparing new industrial and infrastructure projects worth billions of dollars and expanding companies' access to international capital markets.
However, the key question is whether Uzbekistan will be able to turn this investment boom into long-term productive capacity, rather than simply an increase in capital inflows.
Investment becomes a central pillar of growth
Uzbekistan's investment expansion is taking place against a backdrop of sustained economic growth.
Speaking at the Silk Road Finance & Technology Forum, Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov said average annual GDP growth had remained around 6–7%, while the economy had tripled in nominal terms from approximately $60 billion to $180 billion.
The country's economic expansion has been accompanied by improving macroeconomic indicators. Kuchkarov said inflation, which had previously remained in double digits, is expected to reach around 6.5% this year, with the government targeting the 5% level next year. External public debt has remained around 27% of GDP, while budget deficits have stayed below 3% of GDP in recent years.
This combination of relatively rapid growth and improving macroeconomic stability is important for investors. A predictable macroeconomic environment reduces some of the risks associated with long-term projects, particularly in infrastructure and manufacturing, where investment returns often depend on conditions over many years.
At the same time, Uzbekistan is seeking to improve its sovereign credit standing, complete accession to the World Trade Organization, and further reduce the state's role in the economy.
These reforms suggest that the government sees foreign investment not as a temporary source of financing, but as part of a broader transition toward a more market-oriented economic model.
Manufacturing is at the heart of the investment drive
The distribution of fixed-capital investment in the first half of 2026 provides an important indication of where Uzbekistan's growth strategy is heading.
Manufacturing attracted 100.5 trillion soums ($8.5 billion), making it by far the largest recipient and accounting for almost 30% of total fixed-capital investment.
Agriculture, forestry and fisheries followed with 32.9 trillion soums ($2.7 billion), while construction attracted 32.5 trillion soums ($2.7 billion).
Electricity, gas, steam and air-conditioning supply received 29.9 trillion soums ($2.5 billion), residential construction accounted for 27.3 trillion soums ($2.3 billion), and mining and quarrying attracted 21.8 trillion soums ($1.9 billion).
Transportation and storage received another 16.3 trillion soums ($1.4 billion).
Taken together, manufacturing, construction and energy-related activities attracted approximately 162.9 trillion soums ($13.8 billion), or about 48% of all fixed-capital investment during the first half of the year.
The concentration is significant. It suggests that Uzbekistan is prioritizing sectors that can directly expand physical production capacity and address infrastructure constraints.
Manufacturing investment alone was more than three times the amount allocated to agriculture, forestry and fisheries, the second-largest recipient.
For Uzbekistan, this could support a gradual transition from an economy reliant on commodity production and domestic demand toward one with a larger industrial and export-oriented base.
But the size of investment will not by itself determine whether that transition succeeds. The critical issue will be whether new factories and infrastructure generate sufficient productivity gains, exports and local value creation.
$27 billion project pipeline signals continued expansion
The investment drive is also being reinforced by a large pipeline of new projects.
Uzbekistan plans to launch 105 industrial and infrastructure projects worth $27 billion this year, covering energy, transport, manufacturing, logistics and urban development.
Among the major projects are a nuclear power plant in Jizzakh, a fourth copper processing plant in Almalyk, new highways connecting Tashkent with Samarkand and Andijan, an environmentally friendly aviation-fuel complex in Khorezm, a large greenhouse complex in Surkhandarya and the New Tashkent airport in Yukori Chirchiq.
The scale and diversity of these projects illustrate an important feature of Uzbekistan's investment strategy: capital is being directed simultaneously toward production, energy security, transport connectivity and urban infrastructure.
This matters because infrastructure bottlenecks could otherwise constrain the country's rapid economic expansion.
Electricity and gas supply attracted almost $2.5 billion in fixed investment during the first half of 2026, while transportation and storage received around $1.4 billion. These investments can provide the underlying infrastructure required for industrial expansion.
The challenge is to ensure that infrastructure investment remains closely linked to productive economic activity rather than creating excess capacity or placing unnecessary pressure on public finances.
The next stage: bringing private companies to international capital markets
One of the most significant developments in Uzbekistan's investment strategy is the government's attempt to diversify the sources of corporate financing.
Uzbekistan aims to attract at least $1 billion in foreign capital annually through IPOs, creating an alternative to traditional bank lending.
The initiative follows the listing of a 30% stake in the National Investment Fund, which holds assets in 13 strategic companies, on the Tashkent and London stock exchanges.
The government plans to select 50 companies each year with annual revenues exceeding 1 trillion soums for an IPO acceleration program. It will cover half of the costs associated with preparing companies for listings and bringing their financial reporting into line with international standards.
This could become an important structural change for Uzbekistan's economy.
The country's investment boom has so far relied heavily on large projects, bank financing and foreign investment. Developing equity markets could broaden access to capital and allow successful domestic companies to finance expansion without relying exclusively on bank loans.
The policy is also consistent with the government's wider objective of reducing the state's presence in the economy.
If more Uzbek companies become capable of raising capital internationally, the result could be greater corporate transparency, stronger financial reporting and increased participation by institutional investors.
However, turning the initiative into a sustainable source of foreign capital will require Uzbek companies to strengthen transparency, corporate governance and financial reporting while demonstrating strong growth potential to international investors.
The banking system is also being redirected toward smaller businesses
While the government is developing equity markets for larger companies, it is simultaneously attempting to improve access to finance for small and medium-sized businesses.
The share of small businesses in banks' loan portfolios has increased from 45% to 63%, while 76.5 trillion soums ($6.4 billion) was allocated to SMEs during the first half of 2026.
A new digital portal allows entrepreneurs to submit a single credit application while banks compete to provide financing. New entrepreneurs can apply online for loans of up to 5 billion soums (about $423,026).
The government is also introducing three programs — Business Start, Business Lift and Business Rise — designed to support businesses at different stages of development.
Under Business Start, entrepreneurs will receive assistance with project development, loan documentation and financial reporting, including through artificial intelligence. The program will have 100 billion soums ($8.4 million) in funding and offer ready-made business plans and unsecured loans of up to 200 million soums (around $16,921).
This approach is important because a sustainable investment economy cannot rely exclusively on large foreign-funded projects.
The development of domestic SMEs is necessary to create local suppliers, services and employment around major investment projects. If small businesses can scale into larger companies, the benefits of foreign investment could spread further through the domestic economy.
Human capital may become the next investment bottleneck
One of the more important aspects of Uzbekistan's current investment policy is the growing emphasis on skills.
President Shavkat Mirziyoyev has highlighted the need to link investment in advanced technologies with workforce development, noting that Uzbekistan is implementing $50 billion worth of high-tech investment projects annually and that training must form part of such projects.
This is an important consideration because the productivity gains from foreign investment depend not only on the arrival of new equipment or technology, but also on the ability of local workers to operate and maintain it.
A vocational training model based on German and Chinese experience has already been introduced in Urgench, covering professions including green energy, construction, nursing, agronomy and electrical engineering.
The government aims to train 1 million young people in modern professions and help them secure higher-paying jobs.
For an economy experiencing rapid industrialization, this could be decisive.
Uzbekistan can attract factories, power plants and infrastructure projects relatively quickly. Building a workforce capable of supporting increasingly sophisticated industries takes considerably longer.
A shortage of skilled workers could therefore become a constraint on the country's ability to absorb foreign technology and move into higher-value manufacturing.
Logistics is another piece of the investment equation
Uzbekistan's investment strategy is also increasingly linked to its ambition to become a regional logistics hub.
The government has abolished import duties and recycling fees on trucks and plans to reduce VAT on the provision of railway wagons for international transportation to zero.
A logistics center with a capacity of 500,000 tons is expected to begin operations at Georgia's Poti port next year, while work on the Anaklia port project is also planned.
Major logistics hubs are planned in Alat, Termez, Yangiyul, Akhangaran and Khanabad.
For a landlocked country, improvements in logistics can have an economic impact extending far beyond the transport sector. Lower transportation costs and improved access to international markets can make Uzbek manufacturing more competitive and encourage foreign companies to use the country as a production base.
The development of transport links therefore complements investment in manufacturing.
A factory can increase production, but without efficient access to export markets its potential remains limited.
Azerbaijan-Uzbekistan investment cooperation adds another dimension
The growing scale of Uzbekistan's investment needs is also creating opportunities for bilateral investment partnerships.
During the third meeting of the Supreme Interstate Council of Azerbaijan and Uzbekistan, President Ilham Aliyev said the projects already envisioned and contracted between the two countries significantly exceed the capacity of the $500 million Uzbekistan-Azerbaijan Investment Fund.
According to Aliyev, around $160 million of the fund had already been allocated, while the overall portfolio of projects is considerably larger.
He specifically pointed to plans for approximately $5 billion in investment in Uzbekistan's tourism sector alone, in addition to hotel and residential projects in Tashkent that fall outside the investment fund's current scope.
The comments indicate that the existing investment mechanism may need to expand if bilateral projects continue to grow.
More importantly, the Uzbekistan-Azerbaijan example illustrates how foreign investment is increasingly moving beyond individual projects toward broader investment ecosystems involving funds, infrastructure, tourism, logistics and real estate.
For Uzbekistan, diversified bilateral investment partnerships can provide additional sources of capital while reducing dependence on any single investor or financing channel.
The diversification question
Despite the positive momentum, Uzbekistan's investment figures also reveal areas where diversification could go further.
Investment remains heavily concentrated in manufacturing, construction, energy, mining and infrastructure.
By comparison, sectors such as finance, healthcare, information and communications, professional services and other knowledge-intensive activities attracted substantially smaller amounts.
Financial and insurance activities received only 2.4 trillion soums (about $203 million), while information and communications attracted 5.8 trillion soums (around $490.7 million), and healthcare and social services received 4.6 trillion soums (approx. $389.1 million).
This does not necessarily indicate weakness. In a rapidly industrializing economy, infrastructure and manufacturing naturally require substantial capital.
However, as Uzbekistan's physical infrastructure expands, the next stage of growth could require greater investment in digital technologies, financial services, healthcare, education, professional services and other high-value sectors.
Greater diversification would also make the economy less dependent on capital-intensive industries.
The real test is what happens after the investment arrives
Uzbekistan has already demonstrated that it can attract substantial capital.
The more difficult question is whether the investment will generate sufficient economic returns.
The country's 17.5% increase in fixed-capital investment, $32.9 billion in utilized foreign investments and loans during January-July, and a $27 billion project pipeline demonstrate strong investor and government activity.
But the ultimate success of the strategy will depend on several factors.
First, new projects must generate higher productivity and exports, rather than simply increasing domestic capacity.
Second, foreign investment needs to create stronger links with Uzbek companies through local procurement, technology transfer, and workforce development.
Third, the expansion of capital markets must give successful domestic businesses access to financing beyond bank credit.
Fourth, investment in infrastructure must keep pace with industrial expansion.
And finally, the country must continue strengthening macroeconomic stability and regulatory predictability.
Uzbekistan's government appears increasingly aware of this shift. Its policies now connect investment with privatization, IPOs, SME financing, logistics, vocational education, and international market integration.
That suggests the country is moving from an investment-attraction model toward an investment-conversion model.
The objective is no longer simply to bring more dollars into Uzbekistan. It is to turn those dollars into factories, exports, technology, skilled workers, competitive domestic companies, and higher incomes.
The scale of investment now being mobilized allows Uzbekistan to accelerate its transformation into a more diversified and productive economy.
But the size of the opportunity also raises the stakes.
The success of Uzbekistan's investment boom will ultimately be measured not by how much capital enters the country, but by how effectively that capital changes what the economy produces, exports and earns.
