London (UK), Tashkent (Uzbekistan) – JSCB Agrobank, with technical support from the Global Green Growth Institute (GGGI), has issued an internationally verified Green Bond on the London Stock Exchange. The value of the issuance is equivalent to USD 455, of which USD 400 million is in a five-year bond alongside UZS 700 billion in a two-year tranche (USD 55 million). This is the first Agrobank Green Eurobond and an oversubscription of $1.1 billion, reflecting the growing international confidence in Uzbekistan’s capital markets and Agrobank's potential.
GGGI is pleased to have provided technical advice and expertise to Agrobank for the development of the Green Finance Framework to align with the ICMA Green Bond Principles 2021 (GBP); it is also aligned with the Green Loan Principles 2023 (GLP) and, LSTA, and APLMA. The Use of Proceeds marked under the framework will be used primarily for renewable energy, clean transportation, and climate change adaptation with 80% of the bond targeting Climate-Smart Agriculture activities in Uzbekistan. A second-party opinion from Sustainable Fitch Inc. was secured with an excellent rating on the Green Finance Framework. The Framework and SPO were used for investment roadshows in the UK and USA and for addressing investors' queries.
GGGI offered valuable technical advice and expertise to Agrobank as a Green Structuring Advisor, developing the Green Finance Framework, securing an excellent SPO, and participating in the 65+ meetings and roadshows addressing investors’ ESG queries. Additionally, GGGI will continue to engage with Agrobank for the allocation and impact reporting on an aggregate basis post-issuance.
This transaction was enabled through the support of the Korea International Cooperation Agency (KOICA)-funded ‘Green Rehabilitation Investment Project for Karakalpakstan Republic to address impacts of the Aral Sea crisis’ (Aral Sea GRIP)’, endorsed by the Ministry of Ecology, Environmental Protection and Climate Change (MoEEPCC), and the assistance of the government of the Grand Duchy of Luxembourg through the Global Trust Fund on Sustainable Finance Instruments (GTF).
Contacts:
AGROBANK: Ilhomkhuja Yunuskhodjaev: [email protected] [email protected]
GGGI: Mona Laczo: [email protected]
About AGROBANK
Joint-Stock Commercial Bank “Agrobank” is one of the largest banks in the Republic of Uzbekistan. According to the Central Bank of the Republic of Uzbekistan (CBU), as of 1 July 2024, Agrobank was the third-largest bank and comprised 11% of the banking sector's total assets and 12% of the sector's total loans. Agrobank is controlled by the Uzbek government directly through the Ministry of Economy and Finance (MinEcoFin) and through the state Fund for Reconstruction and Development (FRDU), which owned 54.1% and 44.6% stakes in the bank's share capital, respectively, as of year-end 2023.
Agrobank plays an instrumental role in implementing government policy, acting as a government agent for providing affordable funding for farmers and agribusinesses. The bank has one of the most extensive distribution networks among all Uzbek banks, with 171 branches, 130 mini-banks, and 301 cash offices located throughout the country. Agrobank services more than 4.8 million clients (including small businesses, commercial and agriculture enterprises, farmers, and other family businesses and individuals).
About the Aral Sea GRIP project
The desiccation of the Aral Sea basin and its delta have resulted in the loss of agricultural potential, livelihoods, and employment and have led to health challenges. These problems are expected to worsen due to the impacts of climate change. To effectively address these issues, GGGI is implementing the three-year ‘Green Rehabilitation Investment Project for Karakalpakstan Republic to address impacts of the Aral Sea crisis’ (Aral Sea GRIP)’ (2021 to 2024), co-financed by KOICA (5.9 Million USD) and supported by the Ministry of Ecology, Environmental Protection and Climate Change of the Republic of Uzbekistan (MEEPCC). One of the main focuses of the project is supporting access to sustainable finance to enhance the Climate-Smart Agriculture practices in Uzbekistan. This includes accompanying financial entities to create sustainable instruments, promoting green banking training, and providing expertise to the government to develop investment and grant pipelines.