New Tashkent Airport Pioneered by Sodjitz: Steering a New Era of Investment in Central Asia

Central Asia’s New Investment Frontier: Uzbekistan’s Attractiveness

Uzbekistan has emerged in recent years as one of the most remarkable economic growth countries in the Central Asian region. With a population of approximately 36 million, the country boasts abundant natural resources and strategic geographic advantages, and under the leadership of President Shavkat Mirziyoyev, it has pursued bold economic reforms. The country has moved away from its former closed economic system and has taken a proactive stance toward becoming a market economy and attracting foreign investment.

These reforms, in areas as diverse as foreign exchange liberalization, tax reform, and the privatization of state-owned enterprises, have attracted the interest of international investors. The World Bank and the International Monetary Fund (IMF) have also given high marks to Uzbekistan’s economic growth prospects, especially with stable real GDP growth exceeding 5% in 2022.

In this dynamic environment, the announcement by Sojitz (Sojitz), a leading Japanese general trading company, of a billion-dollar investment plan to build a new international airport in Tashkent, the capital of Uzbekistan, represents more than just an infrastructure project. It is clear evidence that Japanese firms appreciate Uzbekistan’s long-term growth potential and improved investment climate. This project is an important step toward consolidating Uzbekistan’s position as the economic hub of Central Asia and the keystone of the “New Silk Road” connecting the East and the West.

For investors, Uzbekistan’s appeal lies in its young labor force, growing domestic market, and extensive business opportunities as an access point to neighboring Central Asian countries and Afghanistan. Sojitz’s large-scale investment is a true sign of confidence in this potential, and could be the catalyst for many more international companies to enter the Uzbek market in the future. A new investment frontier in Central Asia is now opening up.

Strategic Insight from a General Trading Company: Sojitz’s New Tashkent Airport Project

Sojitz’s project to build the new Tashkent International Airport is notable for its scale and strategic significance. The massive investment totaling $1 billion is one of the largest single infrastructure projects in the Central Asian region and demonstrates the Sojitz Group’s long-term perspective andrisk tolerance. This project is expected to take the form of a truly comprehensive partnership that will not only “build” the airport, but will also consider its subsequent operation and management.

Why is Sojitz building a new airport in Tashkent? The reason is the rapid growth of aviation demand in Uzbekistan. With an increase in the number of tourists, more active business travel, and an expected expansion of international cargo volume, the existing Tashkent International Airport alone would not be able to meet future demand. The new airport is expected to solve these issues and strengthen Uzbekistan’s economic growth in both logistics and tourism by enhancing its air traffic hub function.

The project is expected to adopt a typical PPP (Public-Private Partnership) model, in which the government of Uzbekistan and the Sojitz Group, a private company, will cooperate while leveraging their respective strengths. Sojitz will make maximum use of its project structuring capabilities, fund-raising capacity, and international network as a trading company, aiming to create value throughout the entire life cycle of the project, from airport construction to operation.

The construction of a new airport will have a significant ripple effect on infrastructure development and related industries in the surrounding area, contributing not only to job creation but also to the revitalization of the entire regional economy. Examples include the construction of airport access roads, the development of hotels and commercial facilities, and the expansion of cargo terminals and logistics facilities. This is not just an infrastructure investment, but a strategic move that will directly improve the competitiveness of the nation, and will be a shining example of Sojitz’s deep insight andability to execute in international business.

Opportunities for Investors to Watch: Related Industries and Market Entry Tips

Sojitz’s Tashkent New International Airport project will have far-reaching ripple effects throughout the Uzbek economy and create new business opportunities for many investors. In particular, specific investment opportunities are expected in the following sectors

• Construction and materials industry: Demand will increase not only for the airport itself, but also for the surrounding infrastructure (roads, railroads, power supply, etc.). Construction of high-rise buildings and residential development will also accelerate.
• Logistics and Transportation Industry: The new airport will be a logistics hub for Central Asia, so investment in air cargo, warehousing, and international transportation services will be essential. Supply chain optimization is the key to competitive advantage.
• Tourism and Hospitality Industry: Demand for hotels, resorts, food and beverage facilities, and tourism services (e.g., tour operators) will explode to accommodate the growing number of tourists. The demand will be for unique tourism experiences that capitalize on traditional culture.
• Retail and commercial development: Opportunities will arise for commercial facilities, duty-free stores, shopping malls, etc. on and near the airport. Strategies must also take into account the expansion of the domestic consumer market.
• IT and Digital Services: Demand will increase for IT solutions to support digital transformation, including more efficient airport operations, smart cities, and e-commerce proliferation.

When considering entering the Uzbekistan market, it is important to consider the following

• Local partnerships: A joint venture (JV) with a reputable local company will provide smooth access to the market and reduce risk.
• Utilize SpecialEconomic Zones (SEZs): SEZs are particularly attractive to manufacturing and export-oriented companies that can take advantage of tax incentives and infrastructure support offered by the government.
• Understanding the RegulatoryEnvironment: It is essential to fully understand the local legal and regulatory environment, including foreign investor protection, labor laws, and taxation, and to seek expert advice.
• Respect for culture and customs: Understanding Central Asian business culture and a commitment to building long-term relationships are key to success.

By seizing these opportunities, Japanese investors have the potential to become deeply involved in Uzbekistan’s growth story and establish new revenue streams.

Risks, Challenges, and Long-Term Prospects

While investing in Uzbekistan is attractive, there are also risks and challenges. As international financial journalists, we must always balance both sides of the equation. The main risk factors include the following

• Political and geopolitical risks: Central Asia is a region that is susceptible to fluctuations in international affairs. Relations with neighboring countries and stability within the region can have a direct impact on the investment environment.
• Regulatory and legal uncertainties: Although reforms are underway, there is no denying that the legal system and administrative procedures are still in the process of being developed. Unexpected changes and differences in interpretation may increase business costs.
• Inadequate infrastructure: Basic infrastructure such as power, water, and telecommunications may still be inadequate in some areas, creating bottlenecks in the implementation of large projects.
• Corruption Risk: Increasing transparency continues to be a challenge, and the risk of corruption in the business environment remains a factor to be considered.

Thorough due diligence, strong local partnerships, and government dialogue channels are essential to addressing these risks. Properly managing risk can maximize potential returns.

However, from a long-term perspective, Uzbekistan still has high growth potential. As it strengthens its role as a hub in Central Asia and as a key location in the “One Belt, One Road” initiative, its importance in international trade and logistics will only increase. The new airport project will be a symbolic project that will materialize this long-term vision.

Uzbekistan’s young and dynamic labor force, abundant natural resources, and strong will for reform are the foundation for sustainable economic growth. There is great potential for Japan’s technology and experience to contribute to Uzbekistan’s development and create a mutually beneficial win-win relationship. For international investors, Uzbekistan is transforming into a “can’t miss” market. The future of investment sometimes begins with a bold step.