The Financial Readiness of State-Owned Banks in Uzbekistan To Support Green Projects: A Ratio-Based Analysis

Аннотация

This study investigates the financial readiness of state-owned banks to provide support for green financing initiatives, in accordance with Uzbekistan's strategic objectives for a green economy. The paper employs a ratio-based approach to assess the capacity of banks to finance green projects in light of the lack of detailed environmental data. Key financial indicators, including Return on Assets (ROA), Return on Equity (ROE), Capital Adequacy, Liquidity, and Leverage ratios, are analyzed using publicly available financial statements. Subsequently, these indicators are employed to generate a Green Financing Readiness Index, which facilitates a comparative evaluation of the readiness of institutions. The expected results indicate that while certain institutions may exhibit profitability and capital stability, the potential for long-term green investment may be impeded by liquidity constraints and high leverage. The study concludes by providing suggestions for the improvement of institutional and financial capabilities in order to promote sustainable banking in Uzbekistan. This research contributes to the theme of sustainable development finance which is a hot topic in Uzbekistan as of today and bolsters the national initiatives implemented under the "Uzbekistan – 2030" strategy. Keywords: Green Financing; Financial Readiness; State-Owned Banks; Environmental Finance; Uzbekistan – 2030 Strategy; Green Economy; Financial Ratios; Capital Adequacy; Green Investment; Liquidity Constraints; Sustainable Development Finance. aimed at implementing green technologies, conserving Introduction: Green economic growth is emerging as a water resources, expanding green spaces, and strategic priority for Uzbekistan these days as it is trying enhancing waste management practices. These to align itself with global sustainability goals. These priorities were all formalized in the Presidential Decree efforts are clearly visible in Uzbekistan’s “Uzbekistan – titled "On the State Program for the Implementation of 2030” strategy issued on September 11, 2023 based on the Uzbekistan–2030 Strategy in the Year of Presidential Decree No. DP-158 which emphasizes a Environmental Protection and Green Economy," issued pivotal transition to a green economy, with a goal of on February 7, 2025 (Yuz.uz, 2025). Also, during the increasing renewable energy capacity to 25,000 MW, Abu Dhabi Sustainability Week in January 2025, intending for renewables to represent 40% of the President Mirziyoyev emphasized the initiation of a country's overall energy consumption (CAU, 2023). The National Program for Green Financing and a initiatives continued in 2025 too, which first started comprehensive Low-Carbon Development Strategy. He with the declaration of the year being the year of emphasized Uzbekistan's objective to incorporate a Environmental Protection and Green Economy and green component in 50% of all new investment projects International Journal of Management and Economics Fundamental 38 https://theusajournals.com/index.php/ijmef International Journal of Management and Economics Fundamental (ISSN: 2771-2257) within the next five years, aiming to establish the State-owned banks in Uzbekistan play a crucial role in country as a future center for green energy innovation funding the nation's green efforts. The World Bank's in the region (Times of Central Asia, 2025). research "Prime Picks for a Green Pivot: Uzbekistan Furthermore, more recently during the first Climate State Funds for Climate Action" underscores the Forum held in Samarqand in April, 2025 President capacity of these institutions to support climate Shavkat Mirziyoyev again highlighted the significance initiatives via targeted investments in environmentally of regional cooperation in addressing global climate sustainable projects (World Bank, 2024). The issues. He advocated for collaborative solutions and International Finance Corporation (IFC) highlights the emphasized Uzbekistan's preparedness to assume a initiatives of banks such as Uzpromstroybank to leadership position in green development throughout incorporate green finance into their operations, Central Asia (News Central Asia, 2025). In this context, indicative of a wider trend among Uzbek financial financial institutions, particularly state-owned banks, institutions (IFC, 2021). play a crucial role in financing environmentally Regardless of the advancements, challenges remain in sustainable projects and contribute significantly to the execution of green banking practices in Uzbekistan. Uzbekistan's economy. As of 2023, they hold a Gulomkodirova (2023) highlights the lack of established dominant asset share of 65% of total GDP, with a definitions and assessment frameworks for green concerning 69% of bank assets owned by the banking, which obstructs effective implementation. government (Pulatov and Islamov, 2025). Historically, Conversely, there are prospects in the growth of these banks have primarily focused on lending to state-