President outlines priorities to accelerate the development of the electrical engineering industry

In recent years, systematic measures have been implemented in Uzbekistan to develop the electrical engineering industry, increase the production of high value-added products, and expand export opportunities. As a result, industry output increased from 4.7 trillion soums in 2018 to 43.1 trillion soums, while exports exceeded $1 billion. Today, electrical engineering products manufactured in Uzbekistan are exported to 65 countries.

At the same time, the structure of production in the industry is changing. The production and export of copper products are increasing, while the share of low-margin products is steadily declining. Today, locally manufactured products meet 80 percent of domestic demand for household appliances, while 30 percent of output is exported. The production of hundreds of new types of products has been launched, including solar panels, high-voltage cables, electric vehicle charging stations, vacuum circuit breakers, high-voltage disconnectors, and heat pumps.

In the first seven months of this year, the industry produced goods worth 30 trillion soums, while exports reached $706 million. Sixteen projects worth $148 million were launched, creating 1,200 new jobs. By the end of the year, output is expected to reach 51 trillion soums, exports $1.6 billion, and 67 projects worth a total of $420 million are planned to be commissioned.

During the presentation, plans were considered to increase production in the electrical engineering industry and related sectors to $11 billion and exports to $5 billion by 2030. It is also planned to attract $3 billion in investment and increase the share of value added in copper products to 35 percent.

The country has the necessary raw material resources and a substantial market to achieve these goals. More than 150,000 tons of copper cathodes are produced annually, and with the launch of new production facilities, this figure is expected to reach 300,000 tons. In addition, solar and wind power plants with a total capacity of 15 gigawatts are planned to be commissioned. This will generate annual demand for approximately $500 million worth of electrical engineering products.

However, a number of issues in the industry still need to be addressed. Some enterprises lack sufficient collateral to obtain working capital loans, more flexible financial instruments are needed for purchasing copper raw materials through the exchange, and guarantee mechanisms need to be expanded to attract major international brands. Growing housing construction is also driving demand for electrical engineering products.

In this regard, new mechanisms were proposed to provide financial support to enterprises in the industry. In particular, when purchasing copper raw materials, enterprises will pay 25 percent of the cost, with the remaining 75 percent to be covered by Uzsanoatexport JSC. Enterprises will be able to repay these funds within 90 days at an annual rate of up to 6 percent. A total of $50 million will be allocated for this purpose.

Other types of collateral, including export contracts and insurance policies, will now also be accepted when granting loans. Part of the loans provided in national and foreign currencies for investment projects will be compensated for three years.

Major international brands investing at least $50 million in the country's economy will be granted tax incentives and offered ready-made buildings with the necessary infrastructure. It is also planned to extend tax and customs benefits for electrical engineering enterprises until 2030 and support domestic industrial enterprises in related sectors.

To expand exports, measures will be taken to establish trade warehouses in foreign markets, simplify product certification procedures, and facilitate supplies to foreign markets. Opportunities to expand exports of complex technological solutions to Afghanistan, Mongolia, Kazakhstan, and Iraq were also considered.

To strengthen innovation and research and development in the industry, it was proposed to establish a research and innovation center for the Fourth Industrial Revolution. The center will focus on digital modeling, testing and localization of new types of products, prototype development, and the provision of engineering services to enterprises.

President Shavkat Mirziyoyev instructed responsible officials to take measures to increase value added in the electrical engineering industry, develop the production of high-tech products and materials, and integrate domestic enterprises into global value chains.