OREANDA-NEWS. Asian Development Bank will support the reforms intended to improve the process of preparation and execution of state budget by the Government, and raise the economic growth in the most densely populated country in Central Asia, reported the press-centre of Asian Development Bank.

The new US$20,7 million loan approved by the ADB Board of Directors on 28 June 2007 will be used to finance the "Public Finance Management Reform" Project to be implemented within the next four years by the Ministry of Finance of Uzbekistan. The loan is accompanied by an additional grant of US$600,000.

"The project will improve the process of planning and appropriation of public funds and will help increase the efficiency and transparency of budget execution", said ADB Country Director for Uzbekistan and the Head of the Project team Mr. Hong Wei.

The project includes three components envisaging the establishment of territorial divisions of the treasury throughout the country, the modernization of treasury operations through an information system for managing public funds and a telecommunication network, as well as management, monitoring and appraisal of the project through a centralized accounting system.

The project is in line with the ADB strategy and programme in Uzbekistan aimed at assisting the country in transition to market economy and developing the system of public administration. It is also intended to support Uzbekistan's strategy of reforms in the management of public finance, which outlines a 12-year plan of actions envisaging the establishment of the system of treasury, development and formation of a modern single system of budget execution and accounting, and integration of the system of medium-term budget planning and program budgeting.

The loan of the Asian Development Bank will cover a major portion of the project costs totaling US$37,4 million and will be appropriated from the bank's regular capital resources. It is extended for the period of 25 years, including a preferential period of four years. The remaining portion of the project costs will be covered by Uzbekistan. ADB grant accompanying the project loan will cover most of the US$720,000 required to strengthen the potential of state structures for the implementation of public funds management reforms in Uzbekistan. The remaining US$120,000 will also be covered by the Government of Uzbekistan.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 67 members - 48 from the Asia-Pacific region. In 2006, it approved loans and technical assistance totaling US$8,5 billion and US$242 million, respectively.