The key facts

  • The local content requirement (at least 25%, and 70% for cable products) will be extended to investment projects worth more than 10 million dollars with tax and other benefits
  • Public procurement of electrical equipment worth 10 trillion soums per year: a unified ordering platform and publication of three-year plans from 1 January 2027
  • A life-cycle cost approach is being introduced — taking into account operating expenses, not just the purchase price

Expansion of local content requirements

On 9 November, at a meeting with representatives of the electrical engineering industry, entrepreneurs and investors held at the NURA Electric plant in the Yukorichirchik district of Tashkent region, President Shavkat Mirziyoyev announced an expansion of measures to stimulate demand for products of local manufacturers. Gazeta reported this.

What changes for investment projects

Currently, requirements for the mandatory use of domestic products apply to public-private partnership projects in the energy sector: the share of local products must be at least 25%, and for cable products — 70%. These same requirements are planned to be extended to investment projects worth more than 10 million dollars that receive tax and other benefits or cheap resources from the state. Thus, the new conditions will affect not only energy PPP projects, but also other large investment projects with state preferences.

Revision of public procurement

Every year, the country purchases electrical engineering products worth 10 trillion soums through public procurement. The President announced a revision of approaches to these purchases. Previously, entrepreneurs had to track orders of state enterprises through four or five separate platforms — now all government orders are displayed on a single platform. From 1 January 2027, three-year public procurement plans will begin to be published in advance, which, by design, will allow manufacturers to forecast demand, expand capacity and attract investors.

Moving away from price-only selection

The practice of selecting suppliers solely on the lowest price will also be revised. The meeting cited an example of a test purchase of two 40 kW transformers: the imported one turned out to be 400 thousand soums cheaper than the domestic one, but consumed 10% more electricity, and its repair costs over its service life were four times higher. In this regard, a life-cycle cost approach is being introduced in public procurement — in addition to the purchase price, expenses for electricity, repair, maintenance and operation of equipment will be taken into account.

Context of the September decisions

In September, Mirziyoyev already considered measures to accelerate the development of the electrical engineering industry: production volume grew from 4.7 trillion soums in 2018 to 43.1 trillion soums, exports exceeded 1 billion dollars, and products are supplied to 65 countries. At that time, it was proposed to extend tax and customs benefits for industry enterprises until 2030, provide preferences to international brands investing from 50 million dollars, and focus on renewable energy — the commissioning of solar and wind power plants with a total capacity of 15 GW should create an annual market for electrical engineering orders of about 500 million dollars. The innovations announced on 9 November develop precisely this direction — increasing domestic demand for local products.