The Uzbek Ministry of Finance and China Eximbank have signed a memorandum of understanding, which stipulates that the Chinese bank will reserve US$79.3 million of credit resources.

The funds will be used to purchase locomotives for the Uzbekiston Temir Yollari state joint-stock railway company (US$57.9 million), to implement a project on reconstructing the sewerage system in the town of Namangan (US$19.2 million) and to improve the sanitary system in Samarqand and Bukhara (US$2.2 million).

The memorandum defines preliminary lending volumes. The final amounts of the loans as well as lending terms and conditions will be determined and agreed upon later. The funds will be reserved within the second credit line for US$1.2 billion extended by the Chinese government to the member countries of the Shanghai Cooperation Organization (SCO).

Currently, the government of China has provided soft and interest-free loans as well as financial assistance to Uzbekistan for a total amount of about US$380 million. The funds are used to implement projects in the social and public utilities sectors as well as agricultural machinery, irrigation and chemical industries. In particular, within the SCO credit line the country’s government has received US$50.3 million to finance three projects on improving land and water supply.