Privatization in Uzbekistan Mr. DAVRON A. KHIDOYATOV Chairman State Competition Committee Republic of Uzbekistan

BILATERAL RELATIONS February 1992 –diplomatic relations established Uzbek-British Trade and Industry Council initiated as an effective mechanism of trade-economic relations 2002 – International Westminster University opens in Tashkent A number of projects implemented with British partners (exploration and extraction of hydrocarbons and polymetallic ores, tobacco, pharmaceutical industry and etc.) 437 companies with British capital are operating in various sectors of Uzbek economy More than 100 companies with British capital registered in Uzbekistan (mining, production of food and drinks, tobacco products, building materials, light industry, telecom services, agricultural processing, leasing, consulting, insurance services etc.) Consistent development of cultural and humanitarian cooperation, including educational sphere 2

PRIVATIZATION TRENDS IN UZBEKISTAN (2011-2015)

PRIVATIZATION IN UZBEKISTAN Uzbekistan was the first in CIS to introduce the notion of “private property” in its legislation (Law “On ownership” adopted in 1990) Revision of the results of privatization is not allowed by law Uzbekistan takes gradual approach to privatization (adopts biannual privatization programs) Privatization is a principal economic policy in Uzbekistan applied to boost private sector BRIEF STATS ON PRIVATIZATION IN UZBEKISTAN: Housing fund – fully privatized by 1993 More than 31,000 legal entities transferred to private ownership New class of owners evolved = over 1,0 mln shareholders State remains the owner only in strategic sectors: mineral resources, natural monopolies and socially important entities (less than 500 companies overall) 1

WHY INVEST IN UZBEKISTAN 8% GDP growth each year over the last decade progressive infrastructure and qualified labor lowest costs of running a business in Central Asia 60+ Universities, 300K+ degree holders per year GLOBAL BRANDS PROVEN BY SAVVY INVESTOR’S BEST CHOICE 57th in global prosperity index by Legatum Institute in the top 10 of “doing business” reforms among top-5 fastest growing economies in the world 16 points up in 2015 Doing business report success stories by global brands , operating in Uzbekistan abundant resource base (global top 10 reserves in minerals and more) favorable investment climate tax incentives and other preferences 2

WHY INVEST IN UZBEKISTAN Indicators of the banking sector 2015 Capital adequacy ratio On average 23,6% (Central bank requirement 10%, and Basel recommendation – 8%) Liquidity ratio On average 64,5% (two times more than int’l requirement) Non-performing loans Less than 1,0% (of total loans volume) Real GDP growth rates (%, YOY) 3

OTHER PRIVELEGES AND PREFERENCES 1 Infrastructure connection costs are covered by the State for Investment Projects worth more than USD 50 mln where Foreign Investor holds at least 50% 2 Certain facilities are sold for “zero” price on terms of undertaking investment liabilities 3 Payment period prolonged up to 24 months when state-owned assets are privatized 4 If payment is made within 1 month, Investor is granted with a 9% discount 5 Assets can be sold in parts at the investor’s request

LATEST DEVELOPMENTS IN CORPORATE GOVERNANCE IN UZBEKISTAN КОРПОРАТИВНОЕ УПРАВЛЕНИЕ Corporate governance Code adopted by SOEs in 2016; Development strategies for medium and long term periods are to be approved by SOEs with focus on market efficiency, profitability, dividend yield and etc; Evaluation of management’s performance based on KPI in every SOE; Competitive member selection for SOE boards, audit committees and other governing bodies; Transition of joint-stock companies to IFRS and International Auditing Standards; Promoting the application of ICT when holding corporate actions (SMS and e-mail notification of shareholders, automated vote counting, videoconferencing, etc.); Ongoing independent monitoring of compliance with Corporate Governance Code and KPI results

open for investment FEATURED INVESTMENT PROPOSALS IPAK “SHARK” and more Electrical Engineering Industry Services Constructions sphere Chemical Industry IPAK “SHARK” JSC “NavoiAzot” JV LLC «Ipak Yo’li – Turizm Invest» JSC “Kokand Superphosphate Plant” JSC «ONIX» JSC “FerganaAzot” JSC «CHIRCHIC ELECTRIC TRANSFORMER PLANT» JSC “URGENCH EXCAVATOR” 8

Offered Stocks Package: 49 percent FEATURED PROPOSAL Number 1 manufacturer of mineral fertilizers in Uzbekistan and the Central Asia JSC “NavoiAzot” Offered Stocks Package: 49 percent Characteristics Data Type of Activity Production of Mineral Fertilizers, Chemical Agents, Small-Capacity Chemistry Number of Personnel 10 068 persons Territory 895,6 hectares Net Revenues $ 252,7 million Production Capacity ammonia (550 thous. tons), nitric acid (870 thous. tons), ammonia nitrate thous. tons (950 thous. tons), other fertilizers (200 thous. tons), chemical agents (52 thous. tons), and other chemical products (102 thous. tons) Market Share 80 percent According to the Investment Program, during 2015 – 2019 at JSC “NavoiAzot” implementation of projects for the total amount of $1,8 billion is planned 9

Offered Stocks Package: 75 percent FEATURED PROPOSAL Leading manufacturer of glass items in Uzbekistan and the Central Asia. Located in Fergana region Offered Stocks Package: 75 percent Characteristics Data Type of Activity Output of Glass Items Number of Personnel 2097 persons Territory 50,6 hectares Net Revenues $ 60,5 million Production Capacity 130 thous. tons Market Share 99 percent 11

Offered Stocks Package: 36 percent FEATURED PROPOSAL Leading manufacturer of cement in Uzbekistan and the Central Asia. Located in Navoiy Region Offered Stocks Package: 36 percent Characteristics Data Type of Activity Production of Cement Number of Personnel 3 497 persons Territory 1,3 thous. hectares Net Revenues $ 397,5 million Production Capacity 3.080.000 tons Market Share 55 percent 12

Offered Stocks Package: 63,1 percent FEATURED PROPOSAL One of the largest banks in Uzbekistan, located in Tashkent City, possesses the developed affiliated branches in the Regions Offered Stocks Package: 63,1 percent Characteristics Data Type of Activity Banking Activity Number of Personnel 70 persons Territory 2,9 hectares Net Revenues $ 62,3 million Attainments Awarded by positive rating score by “Moody’s”, “Standard & Poor’s” and other Agencies Net income Over $8.7 mln 15

Offered Stocks Package: 47,6 percent FEATURED PROPOSAL One of the banks in Uzbekistan, located in Tashkent City, possesses the developed affiliated branches in the regions Offered Stocks Package: 47,6 percent Characteristics Data Number of employees 1010 Total assets $ 405.9 million Net Revenues $ 57.8 million Net Income over $ 7.4 million Attainments Awarded by positive rating score by “Moody’s” and other Agencies 16

Offered Stocks Package: 29.9 percent FEATURED PROPOSAL The largest Business Center of Uzbekistan, located in the center of Tashkent City Offered Stocks Package: 29.9 percent Characteristics Data Type of Activity Lease of Office and other room spaces Number of Personnel 70 persons Territory 3,6 hectares Space under the roof 8,2 thous. sq. ms Net Revenues $ 5,4 million Occupancy rate 85 percent 17

JV LLC «Ipak Yo’li – Turizm Invest» FEATURED PROPOSAL JV LLC «Ipak Yo’li – Turizm Invest» One of the best hotels of Uzbekistan, located in the center of Tashkent City Offered Stocks Package: 39 percent Characteristics Data Type of Activity Hotel services Territory 11.8 thous. sq. ms Office and rooms area 20 thous. sq.m. Number of rooms 206 Net Revenues $ 6.1 million 206, including 100 standard, 98 semi-suits, 2 suits and 1 Presidential Suit, 5 apartments Infrastructure Restaurant, café, confectioner's shop, four conference-halls, banquet hall for 750 seats 18

Angren Logistika Markazi FEATURED PROPOSAL Angren Logistika Markazi One of the largest logistics hubs of Uzbekistan, located in Tashkent Region Offered Stocks Package: 49 percent Characteristics Data Type of Activity Loading-unloading, transportation and forwarding services Number of Personnel 1604 persons Territory 36.9 hectares Net Revenues $ 30,2 million Market Share 100 percent 14

ADDITIONAL INFO ON PRIVATISATION ASSETS www.gkk.uz 20

ADDITIONAL INFO ON THE ASSETS OFFERED FOR SALE www.gkitorg.uz 21

Thank you for your kind attention! www.gkk.uz info@gkk.uz 55, Uzbekistan Avenue, Tashkent, Republic of Uzbekistan, 100003 Tel:(+ 99871) 259-20-90 Fax:  (+ 99871) 239-47-84