The Asian Infrastructure Investment Bank (AIIB) and the government of Uzbekistan signed a $500 million financing agreement for the Green and Sustainable Market Economy Transition Program, the bank's press service said.

This reform program is reportedly aimed at expediting Uzbekistan's transformation to a greener, more sustainable, and more market-oriented development model.

The program is designed to help the government build a more effective governance system: it supports the transition to low-emission development, improves the performance of government agencies, and strengthens the country's resilience to climate risks.

Key steps include increasing transparency and governance in the energy sector and state-owned companies, introducing climate-smart public procurement rules, and creating clear and transparent regulations for the issuance and circulation of carbon credits. All of this will be supported by a monitoring and reporting system and is designed to facilitate the attraction of private investment.

The program will be co-financed by the World Bank. It is fully aligned with Uzbekistan's Green Economy Strategy for 2019-2030, as well as the country's commitments to reduce emissions.

"This program reflects AIIB's commitment to supporting reforms in Uzbekistan that can deliver sustainable climate and economic outcomes," noted AIIB Chief Investment Officer (Region 2), Konstantin Limitovsky. "By advancing key climate reforms, the program creates the conditions for expanding climate finance and private sector participation. We look forward to continuing our close engagement with the government of Uzbekistan on its green transition."

Efficient resource use, the implementation of cleaner energy solutions, and improved climate-smart regulation are expected to reduce greenhouse gas emissions, improve air quality, and enhance resilience to climate risks.

Greater access to energy-efficient technologies should also reduce energy costs and improve living conditions, particularly for vulnerable groups.