Investment Guide for Bukhara Region

    Bukhara Province is situated in the southwest of the Republic of Uzbekistan and borders with Kashkadarya and Navoi Provinces and Republic of Turkmenistan. Total area of this province amounts to 40.3 thousand sq. km. Population is 1,564.0 thousand people.

    Province includes 11 rayons (districts): Alat, Bukhara, Vabkent, Gijduvan, Jondor, Kagan, Karakul, Karaulbazar, Peshku, Romitan and Shafirkan rayons.

    City of Bukhara located in the southwest of Bukhara Province is the administrative centre with population of 263.9 thousand people.

    Territory of the province is represented by the desert plain with some hills.

    Climate of the province is sharp continental with severe winters, and hot and dry summers. There 300 sunny days a year in average.

City of Bukhara has a rich 2500-year history. City was first mentioned by Chinese travelers in II century B.C.

Narshakhi, historian of X century, who was born in Bukhara, wrote that no city had had as many names as Bukhara had. Chinese and Uyghurs called it Bukhar, which means the location of idols. Famous Russian scholar Bartholde thought that Bukhara originated from the Sanskrit and means monastery.

Excavation materials give every reason to suppose that this city was founded not later than I century B.C.

Natural resources of the Bukhara oasis drew attention of neighboring states and foreign conquerors. In VI century B.C. Cyrus, the king of Persia, and later Darius conquered the Bukharan lands. Rule of Persian kings on the territory of Bukhara lasted until 330 B.C.

In 329 B.C. the Bukhara’s (Soghdiana’s) territory like other places of Asia went to the Greeks’ possession after conquest of Iran by Alexander of Macedonia. Local population showed active resistance to the conquerors who ruled in Soghdiana until II century B.C.

Arabs, who took over Iran, Palestine, Egypt and other countries within short period of time, came to historical stage in VII century. In 709 after bloody storm, Arabs conquered the City of Bukhara. Prior to Arabs’ conquest, the City of Bukhara was the Central Asia’s large trade and cultural center.

Arabs started introducing the religion of Islam by force, which, in turn, caused popular revolts. One of the biggest revolts of that time under leadership of Khashim-ben-Khakim (Muqanna), so called “Movement of People in White”, was also suppressed.

Samanids, large landowners from Balkh, called by the name of its founder Ismail Samani became rulers of Bukhara in IX century. Extensive feudal state, which occupied the territory of almost whole Central Asia with capital in the City of Bukhara, had been formed. Appearance of the city had sharply changed. Registan square became an administrative centre of the city.

In X century Bukhara became the heart of high feudal culture. Many world-famous scholars, writers, artists such as historian Narshakhi, poets Rudaki, Dakiki, medic and mathematician, person of encyclopedic knowledge Abu Ali Ibn Sina (Avicenna), historian Belasuri, Tabari, Ben-Miskaveikh lived and worked here.

In 999 territory of contemporary Bukhara was conquered by the Karakhanids who ruled until 1141.

 In early XIII century wealth of Bukhara oasis (Soghd) drew the attention of new conquerors – Mongols. In 1220 Chengiz-Khan occupied Bukhara due to treachery of clergy and commanders. Having undertaken the city, the Mongols ransacked it, and its inhabitants had been turned into slavery.

Bukhara started being gradually restored in the second half of the XIII century. Italian traveler Marco Polo who visited Bukhara at that time called it the city of big grandeur. However, the people couldn’t accept their difficult position and often initiated revolts against the Mongols.

In 1370, during the start of Amir Temur’s (Tamerlane’s) rule, Bukhara was included in the Timurids’ state. Bukhara had lost its political importance because Samarkand became the capital city. Under Ulughbek, Amir Temur’s grandson, Bukhara became the cultural centre of the feudal world.

In 1506 Bukhara was conquered by Sheibanids, new dynasty established by settled and nomadic Uzbek tribes. Starting from the second half of XVI century under Abdullakhan’s rule (1557-1598) Bukhara became the state’s political center after which the name of Bukhara Khanate was fixed. Substantial economic growth of Bukhara Khanate was observed under the Sheibanids’ rule. Majority of architectural structures, which define the old city’s appearance, were built during this period.

In 1595 the new dynasty of Ashtrakhanids named after the Astrakhan Khans started ruling the Bukhara Khanate. By the end of this dynasty’s rule (XVII century) the Bukhara Khanate lost its economic and cultural importance.

In 1740 Nadir, King of Persia undertook the campaign against Bukhara. After conquest of the Bukhara Khanate, the new dynasty – Mangyt Khanate, which existed until 1920, was founded. Period of the Mangyts’ rule was the gloomiest one in Bukhara’s history. Useful arts, science and poetry fell into decay. Trade was reduced.

In 60-70s of the XIX century the Tsarist government of Russia started the occupation of the Bukhara Emirate. In 1868 the Bukhara forces were defeated near Zerabulak. Peace was made at the Emir’s request and Russia established the protectorate over the Bukhara Emirate.

On September 2, 1920 the Bukhara People’s Revolution broke out, and, as a result, the Bukhara People’s Soviet Republic was announced and it existed till 1924. Then Bukhara was included in the Uzbek Socialist Republic as an administrative centre of Bukhara Province.

In 1991 Bukhara was included in the UNESCO’s World Heritage List. And 2500th anniversary of the city was widely celebrated in 1997 at international level under the UNESCO’s leadership.

Type of the province’s economic development is agricultural and industrial, share of agriculture in gross regional product of the province is equal to 32.7%, and industry’s share – more than 12%. Tendency of reducing share of the agricultural complex in the GRP and growth of industrial and services share is  observed.

In 2007 gross regional product of the province amounted to UZS 1,577.5 billion (USD 1,204.2 million) and growth against 2006 reached 109.5%. Per capita gross product in 2007 reached nearly UZS 1,014.7 thousand (USD 774.6 ignoring the purchasing power parity).

External trade turnover in 207 amounted to USD 230.9 million (98.1% against 2006), including exports – USD 170.3 million (104% against 2006) and imports of USD 60.6 million (84.6% against 2006).

Foreign investments and loans in total amount of USD 309.5 million, including foreign direct investments in amount of USD 300.0 milllion and government guaranteed investments in amount of USD 7.9 million were attracted in 2007. Per capita foreign investments utilizied over the years of independence amounted to USD 197.9.

Great importance is given to development of small and private business share of which in the GRP amounts to 55%. Nearly 27 thousand companies operate in the small business sphere and all necessary conditions including preferences and privileges in accordance with national legislation currently in force are created.

Number of population of Bukhara Province as of January 1, 2008 amounted to 1,564.2 thousand of which 319.3 thousand live in urban and 1,244.9 thousand people - in rural areas. Population’s density is equal to 35 persons / sq. km

There are 2 big cities in the province – Bukhra and Kagan. Population of the City of Bukhara is 265.1 thousands and that of Kagan is 54.2 thousands.

Number of able-bodied population is nearly 900 thousands people.

13 banks which funded loans in amount of UZS 171.7 billion (USD 131.1 million) in 2007, including UZS 31.6 billion (USD 24.1 billion) in small and private entrepreneurship operate in Bukhara Province.

In addition, 4 state insurance companies function in the province.

Share of agriculture in the GRP in 2007 amounted to 32.7%. Agricultural production is territorially differentiated into two districts: south and catlle-farming north.

Cotton and grain farming are the leading branches of crop production. Nearly 110 thousand tons of fruits, 260 tons of vegetables, 60 thousand melons and gourds, 130 thousand tons of grapes are produced annually. Nowadays only 45 percent of produced fruits and vegetables are processed. 386 thousand tons of cotton and 568 thousand tons of grain were produced in 2007.

Area of irrigated lands in Bukhara Province is equal to 274.9 thousand ha, of which 73% (200 thousand ha) are used for crops.

Taking into account the arid plain-and-steppe nature of the territory, a cattle farming is widely developed in the province. Leather processing and production of finished leather goods have the significant potential. Bukhara Karakul is world-famous. More than 280 thousand pieces of Karakul skins and 1,700 tons of wool are annually procured in the province.

5 agricultural processing enterprises function in the province. JV “Golden Fruit”, JV “Gala River” and JSC “Shakhrud” are the largest among them. In 2008 they will process 49,657 tons of agricultural products.

Bukhara Province has substantial natural resources, and there is nearly 31 resource deposits in the province, of which 19 deposits are currently developed. Rich deposits of natural gas, oil, graphite, bentonites, marble, granite, gypsum, sulfur, limestone and raw materials for construction materials were discovered on the terrritory of the province.

There are deposits of the following natural resources in the province:

• - gas and condensate – 360.6 billion cubic m and 2,104 thousand tons in Qalat and Karaulbazar Rayons;
• - petroleum – 9,119 thousand tons in Karaulbazar Rayon;
• - technical salt – 100 thousand tons in Alat Rayon;
• - crushed stone and crushed solution – 375 thousand cubic м in Kagan and Shafirkan Rayon;
• - gypsum – 46.3 thousand tons;
• - limestone – 21,100 thousand tons;
• - quartz – 35,900 thousand tons;
• - graphite – 805.9 thousand tons.

Major branches of industry such as textile, silk and ginning industries, as well as extraction and processing of crude oil, natural gas and precious metals also take substantial place.

33 large industrial enterprises function in the province: Bukhara Oil Refinery (oil processing), JSC “Bukharatex” (textile industry), JSC “Shakhrud” (alcohol production), JV “Bukharagyps” (gypsum production), JV “Uzcarpet”, JSC “Bukhoroyog’”, JV “Kogonyog’”, JSC “Bukhorodon” (production of foodstuffs). In 2007 industrial enterprises produced goods in amount of UZS 793.7 billion or more than USD 600 million, which exceeds the 2006 indicator by 107%.

Textile industry, agricultural sector, torism industry, construction, transport and communications development are the most promising branches.

    Oil and Gas Industry   

The province is one of the large areas of fuel-energy industry of Central Asia.

Bukhara Oil refinery which processes 2.5 million tons of oil and condensed gas annually functions in this province.

Bukhara Oil refinery produces high quality gasoline, black oil, aviation kerosene and other oil products. The enterprise’s products are exported to foreign countries.

    Textile Industry

Bukhara cotton is an excellent raw material for textile industry. 128.9 thousand tons of cotton fiber were produced in this province in 2007. Currently only 11% cotton fiber are processed in the province’s enterprises. The JSC “Bukhorotex” is the largest textile enterprises of the province.

Investment attractiveness of this branch consists of extension of preferential mode of management, which enables the investors to attain additional profit upon investing in establishment of new and modernization of existing facilities. According to the Resolution of the President of the Republic of Uzbekistan #PP-510 dated November 13, 2006, textile industry enterprises which implement investment projects are exempted from payment of taxes and custom payments on imported equipment, raw materials and accessories till January 1, 2009.

    Production of Construction Materials

Mineral and raw materials base of the province consists of 31 deposit, of which 19 are under development. These include the graphite, capstone, limestone, mortar sand and brick-and-tile raw stock deposits.

Mineral Resources of Bukhara Province

Gypsum produced in the province is considered as the one of the best in the world by its quality. Joint Uzbek-German Venture “Bukhorogyps” functions here.

According to the outcomes of the year 2007, the province’s external trade turnover amounted to USD 230.9 million. Exports of goods reached USD 170.3 million and imports – USD 60.6 million.

Cotton fiber with share of 78.3%, foodstuffs – 4.1%, services – 4.1%. machinery and equipment – 0.1% are major export items.

Import structure includes mainly machinery and equipment – 40.2%, ferrous and non-ferrous metals – 5.2%, mineral and chemical materials – 24.0%.

A-380 and M-37 highways cross the province’s territory and link Iran, Turkmenistan and Afghanistan with Uzbekistan. Total length of highways is equal to 3,994 km, including 3,557 km are asphalt roads. In 2007 volume of freight traffic by motor transport amounted to 841.9 million tons/km.

Total length of the province’s rail roads is equal to 452.4 km. Bukhara branch of Uzbekistan Railways is constantly increasing the number of routes.

Infrastructure of the City of Bukhara meets international standards, including the recently reconstructed world class airport.

Several companies provide mobile communications services in Bukhara Province: MTS Uzbekistan, Beeline, Perfectum Mobile and Coscom (U-Cell); and communication is accessible at all settlements of the region. Quality urban communication is also provided by the “BukharaTelecom” Company.

There are 64 hospitals, 457 policlinics, 127 clubs, 12 museums, 2 theaters, 31 school of musics and arts. 7 recreation parks and 1 natural reserve in Bukhara Province. 

    There are 443 preschool institutions, 538 general secondary schools and 57 academic lyceums and vocational colleges, 3 higher education institutions in the education sphere, which train highly qualified specialists for food, oil-gas, light industries and medicine.

There are a Theater named after S.Ayniy, puppet show, amusement parks, recreation area as well as the Resort and Recreatin Center named after Sitori Mohikhosa”, 9 sports complexes, 12 museums, libraries and movie theaters in the province.

26 stadiums, 48 sports schools for children and teenagers, 6 swimming pools function in this province. There are total of 3,436 sports facilities in the province

1,511.3 km of gas and 1,521.4 km of water pipeles were commissioned for operation in Bukhara Province during the period from 2000 to 2008. 96% of the province population are connected to power supply.

    While being one of scientific and cultural centers of Uzbekistan, Bukhara is known to the whole world for its unique historical and architectural monuments, which draw the attention of foreign tourists and religious pilgrims from all over the world. Monuments of all historical epochs starting from IX century A.D. are located on the province’s territory.

There are total of 997 historical and architectural monuments in the province, and among them are world-famous ones such as Samanids’ Mausoleum, Kalyan Minaret and Mosque, Ark Fortress, Lyabi-Khauz Ensemble, Sitorai Mokhi Khosa – summer residence of the Bukhara Emir, Chor Bakr Complex, Ulugbek’s Madrassah, and Chor Minor, which are masterpieces of the world culture.

In 1991 Bukhara was included in the UNESCO’s World Heritage List. 2500th anniversary of the city was widely celebrated in 1997 at international level under the UNESCO’s auspices.

Currently there are 46 hotels and 13 tourist firms functioning in this province. Nearly 81 thousand foreign tourists visit Bukhara annually.

Foreign investments and loans in total amount of USD 309.5 million were attracted in 2007, including foreign direct investments in amount of USD 300.0 million (or 97%) and government guaranteed investments in amount of USD 7.9 million. Per capita foreign investments utilizied over the years of independence amounted to USD 197.9.

Light industries, building materials industry, agricultural processing, pharmaceutical industry and agriculture are priority branches for attraction of foreign investments.

National treatment established in the Republic of Uzbekistan for foreign investments, which provides for creation of the same conditions for foreign investments as for those made by legal and physical entities of Uzbekistan.

    69 enterprises with foreign investments are registered in Bukhara Province. The largest enterprises with foreign capital participation include the Bukhara Seed Company (cotton seeds), Bukhara-Khuashen, Karakultex, Peshkutex (cotton yarn production), Uzcarpet (carpet production),  Romstar (raw silk production), Le Ouate de Boukhara (cotton wool production).

TEXTILE INDUSTRY

1. Auction Sale of the Jondor Textile Factory, Ltd. Property Complex

• Bukhara Province
• Type of activity       -        production of textile goods
• Area of land plot     -        10 ha
• Area of buildings and facilities     -       9 ha
• Provision with         -        production infrastructure - 100 %, labor resources     - 100 %
• Terms of sale         -        complex
• Estimated value      -        under appraisal

TEXTILE INDUSTRY

2. Set-up of Production of 15 Thousand Running Meters of Wide Gray Clothes at the Jondor textile Factory, Ltd. Facilities

1. Information on the Originator Enterprise:

2. Description of Proposed Project:
Organization of production of 15 thousand running meters of wide gray clothes based on the incomplete construction of the weaving factory.
3. Project Performance Characteristics: 

4. Provision of Proposed Production with Raw Material Resources: 

5. Finished Product Markets:

6. Existing Infrastructure and Availability of Business Plan:

TEXTILE INDUSTRY

3. Auction Sale of the Shafirkan Textile Factory, Ltd. Property Complex  

• Legal address        -        Shafirkan Rayon, Bukhara Province
• Type of activity       -        production of textile goods
• Area of land plot                        -        10.6 ha
• Area of buildings and facilities    -        5 ha
• Provision with         -        production infrastructure - 100 %,  labor resources     - 100 %
• Terms of sale         -        complex
• Estimated value      -        under appraisal

TEXTILE INDUSTRY

4. Set-up of Worsted Spinning Factory at the Shafirkan Textile Factory, Ltd. Facilities
1. Information on the Originator Enterprise:

2. Description of Proposed Project:
Establishment of worsted spinning factory based on the incomplete construction of the weaving factory.
3. Project Performance Characteristics: 

4. Provision of Proposed Production with Raw Material Resources: 

5. Finished Product Markets:

6. Existing Infrastructure and Availability of Business Plan:

TEXTILE INDUSTRY

5. Auction Sale of the Ramitan Textile Factory, Ltd. Property COmplex

• Legal address        -        Ramitan Rayon, Bukhara Province
• Type of activity       -        production of textile goods
• Area of land plot     -        17 ha
• Area of buildings and facilities     -       15 ha
• Provision with         -        production infrastructure - 100 %, labor resources     - 100 %
• Terms of sale         -        complex
• Estimated value      -        under appraisal

TEXTILE INDUSTRY

6. Set-up of Worsted Spinning Factory at the Ramitan Textile Factory, Ltd. Facilities
1. Information on the Originator Enterprise:

2. Description of Proposed Project:
Organization of 6,835 tons of cotton yarn based on the incomplete construction of the weaving factory.
3. Project Performance Characteristics: 

4. Provision of Proposed Production with Raw Material Resources: 

5. Finished Product Markets:

6. Existing Infrastructure and Availability of Business Plan:

TEXTILE INDUSTRY

7. Sale of 44.8% of Shares of the OJSC “Bukharatex”

Investment obligations: according to resolution of the State Tender Commission
Date of tender for sale of share stock: 2008

1. Main Information on the Company

2. Information of Securities Issue and Placement

3. Financial Indicators (million UZS)

4. Information on Sale of Share Stock at the Tender

TEXTILE INDUSTRY

8. Auction Sale of the OJSC “I. Fazilov” Production Complex (production of knitwear)

• Legal address        -        City of Bukhara, Bukhara Province
• Type of activity       -        production of textile goods
• Capacity                -        20 kg of knitting fiber
• Area of land plot     -        8 ha
• Area of buildings and facilities     -       4.7 ha
• Provision with         -        production infrastructure - 100 %, labor resources     - 100 %
• Equipment             -        made in Russia, brands: КЛК-5, КЛК-3 depreciation – 52%
• Terms of sale         -        complex
• Estimated value      -        under appraisal

TEXTILE INDUSTRY

9. Sale of 24.1% of Shares of the JSC “Bukhara Karakul’

Investment obligations: according to the resolution of the State Tender Commission

1. Main Information on the Company

2. Information of Securities Issue and Placement

3. Financial Indicators (thousand UZS)

4. Information on Sale of Share Stock at the Tender

SILK INDUSTRY

10. Auction Sale of the CJSC “Shafirkon Pilla” Property Complex (Acceptance and Drying of Cocoons)

• Legal address        -        Shafirkan Rayon, Bukhara Province
• Type of activity       -        acceptance and drying of cocoons
• Area of land plot     -        5.5 ha
• Area of buildings and facilities     -       3.5 ha
• Provision with         -        production infrastructure - 100 %, labor resources     - 100 %
• Terms of sale         -        complex
• Estimated value      -        USD 388.0 

SILK INDUSTRY

11. Auction Sale of the OJSC “Bukhara Ipagi” Property Complex (sild-winding production)

• Legal address        -        City of Bukhara, Bukhara Province
• Type of activity       -        production of raw silk
• Capacity                -        660 kg/day
• Area of land plot     -        2.27 ha
• Area of buildings and facilities     -       1.14 ha
• Provision with         -        production infrastructure - 100 %, labor resources     - 100 %
• Terms of sale         -        complex
• Estimated value      -        USD 244.3 thousand

PRODUCTION OF CONSTRUCTION MATERIALS

12. Organization of Roofing Slate Production Based on the Bukhara Reinforced Concrete Items Plant, Ltd.

I. Information on Investment Project Originator      

II. Description of Investment Project

Investment Needs

Proposed Sources of Financing

CDM PROJECTS

13. Construction of booster compressor stations at underground gas storage (UGS) in Gazli

CDM PROJECTS

14. Improvement of energy using efficiency on electric engines, used in gas compressor units of JSC “Uztransgas” at CS-1 in Kagan

ENERGY

14. Sale of 25.0% of Shares of the JSC “Energomarkaz”

Investment obligations: according to the resolution of the State Tender Commission

1. Main Information on the Company

2. Information on Securities Issue and Placement

3. Financial Indicators (million UZS)

4. Information on Sale of Share Stock at the Tender

Telephone numbers in Bukhara Province are seven-digit. In order to dial a number in Bukhara Province from another province of the Reublic of Uzbekistan, one should dial 8 – long beep – 372 (telephone number). International format for dial-up to Bukhara Province: +99872 (telephone number).
    Operator’s codes differ for mobile communications subscribers and are dialed in international format:
    - for subscribers of the MTS Uzbekistan: +99872 (subscriber’s number);
    - for subscribers of the Beeline:  +99890 (subscriber’s number)
    - for subscribers of the Coscom (U-Cell):  +99893 (subscriber’s number)