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Answers to the questions inquired

by the International Group of Experts contracted by the UNECE to compile Country Profiles

on

the Housing Sector

and Land Use in Uzbekistan

OOO "Qishloq Qurilish Loyiha" (“RuralConstructionProject”)

1) INFORMATION ON THE STANDARDIZED DESIGNS FOR INDIVIDUAL RURAL

HOUSING;

In order to implement the Resolution of the President of the Republic of Uzbekistan of

26.01.2009 № PP-1046 On the State Program "Year of Development and Improvement of the

Countryside", the institute, OOO "Kishlokkurilishloyiha" received an order for the development of

new model projects for rural houses, taking into account the following:

- Local climatic conditions and terrain;

- Socio-demographic characteristics of rural housing and livelihood;

- Availability of local building materials;

- The available range of industrial products and structures made of concrete and reinforced

concrete.

The customer to order standardized designs for individual houses for the countryside was

Gosarkhitektstroy agency of the Republic of Uzbekistan. From the beginning, the decision was

that,for any of the project designs, each new housing estate must be provided with electricity, gas,

hot and cold water, heating, telephone line, Internet access, paved roads and all major facilities of

social amenities: from school to a barber shop. There were 16 kinds of social amenity facilities

developed.

The institute has developed the following replicable standard housing designs for

construction in rural areas:

- A series of model projects for 1-storey regular comfort class houses with 3, 4 and 5-room

capacity for a family of 4; 5 and 6 people respectively; with the norm of the floor area per resident

being no more than 16 m 2 excluding summer premises. The residential building designs are for use

in Construction and Climatic Zones II and III.

- A series of model projects of 1-storey, improved comfort class dwelling houses with 3; 4;

and 5 - room capacity for use in the Construction I-Climatic Zone I. The project designs ensure that

the number of rooms is appropriate for the number of residents to live in an apartment. The floor

area, excluding summer premises, is 30 m 2 per person.

- A series of model projects of 1-storeyedenhanced comfort houses of 3; 4; 5 and 6 room

capacity intended for construction in Climatic Zone II. The number of people living in each

apartment corresponds to the number of rooms in it. The floor area, excluding summer premises, is

30 m 2per person.

- A series of model projects of 1-storeyed, 3; 4; 5 and 6 room houses of enhanced class of

comfort for construction in Climatic Zone III. The number of people living in each apartment

corresponds to the number of rooms in it. The floor area is 30.0 m 2 per person excluding summer

premises.

- A series of model projects for 2-storeyed, 1 and 2-apartment improved comfort class houses

with 3; 4; 5 and 6 bedrooms at two levels for construction in Climatic Zone I. The number of people

living in each apartment corresponds to the number of rooms in it. The floor area is 30 m 2 per

person.

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- A series of 2-storeyedimproved comfort class houses with 1 and 2 apartments of 4; 5 and 6

rooms at two levels for construction in Climatic Zone II. The number of people living in each

apartment corresponds to the number of rooms in it. The floor area is 30 m 2 per person.

Altogether, there are 22 project designs for residential buildings with the total number being

32 considering "mirror image" designs. The specifications proposed for the residential units, such as

the number of stores, the number of rooms, the class of comfort and the scope of construction and

climatic zones to fit, allowed for flexibility in addressing demographic, socio-economic, climatic

and architectural tasks in rural housing development.

New spatial and planning solutions for the standardized designs with an ergonomic zoning of

the dwelling space in the apartments or houseshas raised the quality of living conditions for future

residents. Plasticity and expressiveness of the residential buildings' facades increased the landscape

amenity of the housing development in rural areas, streets and towns in general.

A full engineering support of the residential buildings combined with increased comfort

brought the rural housing conditions considerably closer to the urban ones in terms of both

household and social life.

In addition, the drafted projects include kitchen gardens of 0.06 ha which includes:

- Fencing sections with gates;

- Backyard latrine;

- Backyard boiler room with a gas boiler;

- Storage for miscellaneous household stock.

The developed standardized project documentation bases on the following existing

standard-setting regulations of the Republic of Uzbekistan:

- SHNK 1.03.01-08 "Composition, procedure development, coordination and approval of design

and estimate documentation for capital construction of enterprises, buildings and structures";

- KMK 1.03.04-97 "Instructions on standardized design development";

- KMK 2.01.03-96 "Construction in seismic regions";

- SHNK 2.08.01-05 "Residential buildings";

- KMK 2.04.01-98 "Domestic water supply and sewerage";

- KMK 2.04.05-97 "Heating, ventilation and air conditioning";

- KMK 2.04.08-96 "Gas provision. Design standards ";

- KMK 2.04.17-98 "Electricity provision at residential and public buildings" and other regulatory

documents.

The standardized project design documentation of the basic projects developed in 2009 was

for the following conditions:

- Construction and Climatic Zones I; II and III;

- Subsoil that is non-subsident, non-corrosive to portland cement based concrete;

- An area with 7-8 points seismicity.

The experience of applying standardized construction projects in regional planning by the

project design institutions of Uzbekistan in 2009 pointed to the difficulty of conducting construction

investments calculations for such a great number of types of houses, assessing the needs for building

materials, structures; complexity of organizing centralized delivery of materials to construction

sites; organization of technical supervision of construction and many other challenges.

In one of his speeches, the President of Uzbekistan Islam Karimov stated that the first 840

private houses built are to be experimental for they allow to test in practice the developed model

projects and, after a thorough examination of the suggestions and feedback from people living in

them, the appropriate conclusions could be drawn. As a result, the feedback of the population

informed such housing design changes as increasing the height of the walls up to 3.2 meters, the

living area up to 72.6 square meters for a three-room house, up to 78.8 for a four-room house, and

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up to 108.4 - for a five-room one. The kitchen garden was enlarged from four to six acres. The 2-

storeyed housing projects were dropped.

Contracted by an engineering company "Qishloq Qurilish Invest", the Institute OOO

"Kishlokkurilishloyiha" developed a series of single-storey advanced comfort houses of 3, 4 and 5-

room capacity and the State Architecure Committee of the Republic of Uzbekistan approved those

under the construction plan for 2010 and subsequent years with the following design parameters:

- Foundations - strip, monolithic concrete;

- Walls - 38 cm thick brick and Category II brickword;

- Partitions - 12 cm thick, made of reinforced brick;

- Roof - attic, 2-pitched roof of metal shingles on roof boarding and roof trusses;

- Coating - build of concrete hollow-core slabs;

- Insulation - mineral wool of "PPJ" type;

- Windows - plastic fiberglass;

- Doors - wooden paneled;

- Floors - planked on logs, covered with ceramic tile and linoleum in the kitchen, made of cement

and concrete.

Heating - boiler heated water, boilers are locally manufactured. Hot water - from "Ariston".

The composition of house facilities included the following:

- Carport for the car;

- Boiler running on natural gas;

- Pit latrines with cesspools;

- Brick fence of the infield territory with gates.

In addition, the project design envisaged construction of pantry, small facilities for livestock

and poultry, intra-site WSS and electricity networks.

The standardized projects of enhanced comfort class houses of 3; 4 and 5-roomcapacity were

reviewed by the State Architecture Committee of the Republic of Uzbekistan and approved by the

meetings of the Technical Council of Gosarchitectstroy on August 16, 2010. The construction work

applied the standardized project designs in 2010 and 2011.

The two-year experience of construction and operation of the 2010 version of the projects

faced changes of construction material and energy prices, thus there was a need for revision of a

number of design solutions in order to reduce the consumption of reinforcing steel, metal shingle

and lumber while considering improving of the construction quality.

Thus in 2012, at the beginning and at the end of the year, two adjustments were made by the

Institute to the 2013 Construction Plan to optimize the standard solutions of houses and household

facilities and the house layouts included wall plans with spatial coordinates showing the places for

mounting sockets, switches, sanitary appliances and plumbing. Additionally, technical

recommendations were included for the production and implementation of all types of construction

and installation works, etc.

2) AUTHORIZATION OF INDIVIDUAL HOUSESCONSTRUCTION PROJECTS IN

RURAL AREAS.

In order to simplify the procedures for obtaining permits for individual housing construction

(reconstruction) and coordination of projects with authorized agencies a Resolution of the Cabinet of

Ministers № 127 of 30.04.2009 was issued "On measures for the introduction of simplified

procedures for obtaining permits for individual housing construction (reconstruction), coordination

of projects with the authorized bodies based on "one window" principle.

The decree defined the main tasks for inspections in registration of business entities under

khokimiyats of districts and cities regarding registration permits for individual housing construction

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(reconstruction), coordination of projects with authorized bodies via "one window" principle. The

inspections entrusted the responsibility for the organization of the following in accordance with the

legislation:

-Preparation of initial permit (design) documentation for launching of housing construction

and reconstruction works;

- Acceptance of a house in operation;

-State registration of rights to immovable property in the territorial bodies of the

Goskomzemgeodezkadastr of the Republic of Uzbekistan;

-Other procedures performed in individual housing construction (reconstruction).

The new regulation ensured active creation of new development firms, there was no need to

apply separately to Gosarkhitektstroy, Goskomzemgeodezkadastr and other organizations. All

administrative functions in this matter were takenup by the Inspection for Business Entities

Registration under the khokimiyats of districts and cities.

Besides, developers received the right to receive authorization for individual housing

construction (reconstruction) and coordinate their projects with the authorized agencies on their own

or through the Inspection for Business Entities Registration under the khokimiyats of districts and

cities.

As a result of improvement of the authorization procedures, the volume of construction works

increased significantly and to this day maintains a high rate of growth. Currently, any construction

contractor can build houses annually, having successfully passed tendering for house "turnkey"

construction orders.

It should be noted that, while " Qishloq Qurilish Bank " was established as a specialized

engineering company "Qishloq Qurilish Invest", which undertook all administrative and

organizational work on the part of working with construction contractors, conclusion of contracts,

administrative arrangements arising in the course of construction as well as inspecting the completed

facilities for compliance. Currently, the villagers who wish to buy a house built by a standardized

project should only conclude an agreement on granting a lifetime inheritable possession of land for

construction of the house, a loan agreement with "Qishloq Qurilish Bank," obtain their new house a

year later, and timely perform their credit obligations.

OJSCB "Qishloq Qurilish Bank" (“Rural Construction Bank”)

1) INFORMATION ON LENDING AND REPAYMENT SCHEME OF

"KISHLOKKURILISHINVEST" ENGINEERING COMPANY FOR CONSTRUCTION OF

RESIDENTIAL AREAS IN RURAL AREAS. Currently OJSCB "Qishloq Qurilish Bank" provides no direct lending to the Engineering

Company "Qishloq Qurilish Invest" in the framework of the Rural Area HousingDevelopment

Program; it instead provides preferential mortgage loans to individuals for individual construction of

houses based on standard projects in rural areas.

In order to replenish the working capital of the engineering company, the bank for the purpose

of the agreement between the bank and the engineering company, transfers targeted funds of the

bank to a special deposit acct number 22626 "Target Funds of Enterprises and Organizations" to

finance the engineering company. These funds are purpose specific and used to finance the housing

construction.

If trust funds are insufficient to finance a contract with the winner of the bidding for

construction in progress it is carried out in accordance with the procedure provided for in Chapter

IX of the bidding processes to identify contractors for individual housing construction in rural areas

of model projects on a "turnkey" basis. This provision was approved by Resolution № 37 of the

Cabinet of Ministers of the Republic of Uzbekistan dated February 13, 2012, at the same time the

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engineering company has the right to use its own funds and,if such funds are insufficient, it can

obtain funds from the bank on the basis of a separate agreement.

Financing of the construction of a residential building is carried out via a special deposit acct

number 22626 "Target Funds of Enterprises and Organizations" for financing the engineering

company at the expense of funds advanced to the engineering company (at least 15 percent of the

property value) with a monthly operational financing of up to 95 percent of the volume of the

performed work and with proportional withholding of the cash advance payment and repayment of

the remaining project cost in the amount of 5 percent after the warranty period expires subject to

confirmation by the branch of the engineering company.

Monthly operational financing of the housing construction is to pay for the actually

accomplished volume of construction works.

The houses built at the request of individual developers become owned by them after the final

settlement with the engineering company, with a consideration given to the provided preferential

“Ipoteka Bank” loans and other means, including the financial means of the individual developer.

With this in mind, transfer of the funds to a special deposit acct number 22626 "Target Funds

of Enterprises and Organizations" for financing the engineering company, be it an initial payment,

mortgage funds and resources accumulated in a savings deposit account in an amount equal to the

rest of the cost of housingunder construction, is provided by a bank branch based on the written

instructions of the borrower in the manner provided for in the agreement between the developer and

the individual branch of engineering company.

The funds transferred by legal entities to pay for the cost of the house under construction for

their employees, also go to the special deposit acct number 22626 "Trust Funds of Enterprises and

Organizations"to fund the engineering company.

In the event of payment by an individual developer the cost of a house under construction at

their own expense or with other legal sources of funds, after the engineering company submits to the

bank a copy of the district hokim's approval of the acceptance certificate for a house commissioned

into operation, the individual developer transfers the funds accumulated in a savings deposit account

in the amount equal to the value of the building under construction to the special deposit acct

number 22626 "Target Funds of Enterprises and Organizations" to fund the engineering company in

the manner provided for in the agreement between the individual developer and the branch of the

engineering company.

When an engineering company funds individual housing construction, the funds transferred to

the special deposit acct number 22626 "Target Funds of Enterprises and Organizations" to fund the

engineering company are used in payment of the cost of the individual housing under construction to

pay back the bank loans that the engineering company obtained for the construction of the individual

housing.

Funds received to the special deposit acct number 22626 "Target Funds of Enterprises and

Organizations" for financing the contractor are used for the intended purpose of construction of

residential buildings. Thus, these funds are allocated to repay loans, purchase construction materials

and equipment, pay for construction work and services provided by corresponding agreements, pay

wages and salaries in the construction (including taxes and other obligatory payments).

In accordance with the Instruction of the Cabinet of Ministers № 05/1-748 of February 11,

2014 - in order to ensure timely import of building materials - a loan agreement was signed between

OJSCB "Qishloq Qurilish Bank" and IR "Qishloq Qurilish Invest" on February 10, 2014 on

Replenishment of the current assets in the amount of 100 billion soums.

2) INFORMATION ON LENDING AND LOAN REPAYMENT SCHEME

OF INDIVIDUAL DEVELOPERS FOR HOUSING CONSTRUCTION IN RURAL AREAS

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On October 26, 2009, the Resolution of the Cabinet of Ministers of the Republic of

Uzbekistan "On measures to organize the construction of housing in rural areas based on model

projects involving engineering company" Qishloq Qurilish Invest " was adopted, under which the

Regulation on the procedure for individual housing construction involving IK "Qishloq Qurilish

Invest" was approved.

The engineering company organizes the complete complex of works for the "turnkey"

construction of a houseby the approved standardized design.

To organize house construction, an individual developer submits application to the appropriate

local regional branch of the engineering company.

Individual developer in his application indicates his chosen specific land plot and a model

project, as well as a way to pay the cost of the upcoming construction of a residential building (be

that mortgage loans, personal funds or other sources that are not contrary to the law).

In this case, at the request of individual developer, the engineering company's branch provides

a copy of the selected model project.

The branch of the engineering company, within one working day, considers the application of

the individual developer and if it is approved, then the branch shall notify the individual developer

within three days and offer him to sign a contract for the implementation of the engineering

company's customer functions for "turnkey" construction of the house.

At the same time, the individual developer paying the cost of the house under constructionby a

mortgage enters a preliminary contract.

An individual developer that concluded a preliminary agreement with the branch of the

engineering company with the condition to pay the cost of the house under construction via

mortgage submits an application to the bank branch.

The bank provides preferential mortgage to individual developers for individual housing

construction involving the engineering company in accordance with the Cabinet of Ministers

Regulations № 148 "On the procedure for preferential mortgage provision by the Joint-Stock

Commercial Bank "Qishloq Qurilish Bank" for individual housing construction projects based on

the approved standardized designs" dated May 25, 2009.

Mortgage loans are issued on a contractual basis and under conditions of repayment, security,

targeted use, and time to the borrowers (co-borrowers) that meet the following requirements:

be citizens of the Republic of Uzbekistan living in rural areas, who turned 18 years of age on

the day of applying for a mortgage;

have a permanent job in the past 12 months, a steady income from a part-time or dekhkan farm

or be self-employed, as well as have any other source of income, not prohibited by law,

sufficient for a monthly payment of the interest accrued on the mortgage loan and for

repayment of the principal in accordance with the payment schedule ;

have funds for a downpayment of at least 25 percent of the estimated cost of a house under

construction and/or of the provided amount of the construction work and/or construction

materials in an amount not less than 25 percent of the estimated cost of the house under

construction;

have no overdue loan debts to credit institutions.

The borrower's employing organization can pay the downpayment , in part or in full,to the

bank’ssavings deposit account in the name of the borrower in accordance with legislation.

Depositing funds into a savings account is made via a bank deposit contract based on

application for opening a savings deposit account.

The mortgage loan size is determined based on the calculation of solvency assessment of the

borrower (co-borrower) and the estimated cost of the house under construction; it cannot exceed the

amount of 1000 minimum wages and 75 percent of the estimated cost of a house under construction.

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In order to obtain a mortgage loan, the client applies to a local district (city) branch of the

bank or, if such branch does not exist – to the nearest branch of the bank.

After acceptance of a mortgage application and all the necessary documents, the credit

department officer of the bank branch analysesthe documents submitted and checks the authenticity

of the information stated therein.

The Credit Commission (Credit Committee) of a branch of the bank, having considered the

loan application and all the documents attached thereto, as well as the conclusion of the credit

department of the bank branch as to the credit application, decides on whether to grant or refuse

granting a mortgage. The length of a mortgage application review should not exceed 15 business

days from the day on which the the loan application and all required documents were received.

If the Credit Commission (Credit Committee) of the bank branch decides to refuse to grant a

mortgage, the bank branch, within three days after the decision, sends to the borrower (co-

borrower)its written conclusion specifying the reasons for the refusal to grant a mortgage.

Within a week after completion of the construction of a house, the borrower applies to the

Acceptance Commission created by a district khokim with a request to accept the house into

operation. Once the Acceptance Commission compiles a Certificate accepting the house into

operation, and after it being approved by the khokim's decision, the borrower within one month

shall:

a) submit to the bank a copy of the district hokim's approval of commissioning the house into

operation;

b) ensure the state registration of the ownership right to the completed house with

Goskomzemgeodezkadastr (land cadasterauthority) of the Republic of Uzbekistan and then submit

to the Bank a copy of the registered title to the house;

c) insure the house against the risk of loss and damage for the duration of the loan agreement

and then provide to the bank the insurance contract and insurance policy;

d) conclude a house mortgage agreement with the bank, notarize and register it and then

submit it to the bank.

Issuance of a mortgage loan takes one business day after receipt of a written order from the

borrower.

Issuance of mortgage is done by opening a separate loan account for the borrower and wire-

transferring non-cash funds from the account by a memorial order based on the written instructions

submitted by the borrower with the documents specified in the loan agreement: for purchase of

building materials – to a demand deposit account of trade organizations, manufacturing enterprises

and individual entrepreneurs engaged in the preparation of certain construction materials, and for the

construction and installation work – to a demand deposit account of the contractor, under the

conditions and within the period specified in the work contract.

Mortgage loans can be provided by the bank branch also via transferring funds from the loan

account to the bankcards of the borrower. Such bankcards are issued to the name of the borrower by

executing a separate contract. The contract should stipulate that the funds from the bankcard can

only be used for the purchase of building materials for the construction of a house. Cashing out

these bankcards is not allowed.

During construction of the house based on a "turnkey" contract between a borrower and a

contractor, the payment for the accomplished work is donein stages in accordance with the

schedules of financing of construction and installation works in the following order:

a) advanced payment of up to 50 percent of the total mortgage loan;

b) operational funding of up to 40 percent of the total mortgage amount after the bank

employees confirm targeted use of the advance payment through a field visit to the site where they

compile a report confirming proper targeted use of the funds;

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c) final payment of the remaining 10 percent of the total mortgage amount 12 months after the

completion of construction and acceptance of the house by the Acceptance Commission performed

in the manner prescribed by the law as well as a confirmation of the targeted use of all previous

payments by the bank's employees in the course of their field visit (with compiling of the Target Use

Report). In the event of detection of latent defects in the construction works and if the contractor

fails to correct identified defects,these funds can be used by the borrower to have those corrected.

The downpayment accumulated by the borrower in the saving deposit are used to finance

construction of the house in the first place.

After using the funds accumulated in construction and housing savings deposit, the bank

branch begins to issue funds from the mortgage loan account upon written instructions from the

borrower.

The interest on a mortgage loan issued is calculated daily against the mortgage balance and

recovered once a month.

A borrower repays the principal on a monthly basis over the life of the mortgage loan after the

grace period expires.

Payment of interest and repayment of a mortgage loan by the borrower (co-borrowers) is

possible through the following sources:

a) transfers of funds in non-cash form at the expense of a wage and other similar payments,

pensions, royalties, dividends, interest and other income received on securities;

b) cash payment;

c) transfer of funds in non-cash form from deposit accounts of the borrower (co-borrower) in

the bank;

d) non-cash payments via bank cards;

e) transfer of non-cash funds by the employer of the borrower (co-borrowers) through

financial assistance and other resources allocated to repay the mortgage loan;

f) transfer of funds from the farm income becoming private means of the head of the farm at

year-end if the head of the farm is the borrower or co-borrower;

g) other sources not prohibited by law.

Borrowers (co-borrowers) have the right to repay the principal and the accrued interest prior to

the loan maturity specified in the loan agreement without any payment of commission for early

repayment.

On the same day after a positive decision regarding the issuance of a mortgage, the bank

branch provides information to a branch of engineering company about making an initial payment

with a list of individual developers who have paid the mentioned payment. This information serves

grounds for the branch of the engineering company to conclude the main contract with the

individual developer.

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3) CLARIFICATION ABOUT THE SUPPORT MEASURES FOR IMPLEMENTATION OF STANDARDIZED rural

housing programs.

INFORMATION

on tax and customs privileges granted to participants the Program for construction of standardized projects based individual

housing in rural areas

№

Legal entities and

individuals receiving

benefits

Types and terms of benefits Legal document that grants benefits

1 Open Joint Stock

Commercial Bank "Qishloq

Qurilish Bank"

JSB "Qishloq Qurilish Bank" shall be exempt till January 1, 2016 from

income tax and property tax, and customs duties (except customs

clearance fees) for imported banking equipment and technology with a

targeted channeling of the saved funds to increase the share of the

Ministry of Finance of the Republic of Uzbekistan in the authorized

capital of the bank.

Paragraph 6 of the decree of the

President of the Republic of Uzbekistan

of 30.03.2009 № PP-1083 "On creation

of the Joint-Stock Commercial Bank"

Qishloq Qurilish Bank"

Paragraph 6 of the PP-1083 is provided

here as amended by paragraph 1 b) of

the annex to the Resolution №5 of the

President of the Republic of Uzbekistan

of 11.01.2012 № PP-1683

2 Engineering company

"Qishloq Qurilish Invest"

The engineering company OOO "Qishloq Qurilish Invest" shall be

exempt till January 1, 2016 from all taxes and mandatory contributions to

the National Road Fund and Extrabudgetary Fund of

Reconstruction,Refurbishment and Equipment of Educational and

Medical Institutions under the Ministry of Finance of the Republic of

Uzbekistan.

Paragraph 8 of the Resolution of the

President of the Republic of Uzbekistan

dated 03.08.2009 № PP-1167 "On

Additional Measures to Scale-up

Housing Construction in the

Countryside"

Paragraph 8 PP-1167 is provided here as

amended by paragraph 1 of Annex 6 to

the Resolution of the President of the

Republic of Uzbekistan dated

15.11.2013, № PP-2068

3 Contractors Contractors, in terms of the volume of work undertaken by them in

construction of individual housing based on "turnkey" contracts with the

Paragraph 3 of the Decision of the

President of the Republic of Uzbekistan

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engineering company "Qishloq Qurilish Invest" and newly created

specialized repair companies shall be exempt till January 1, 2016 from

paying the following:

- all kinds of taxes and mandatory contributions to state funds,

except extrabudgetary Pension Fund;

- customs duties (excluding charges for customs clearance) for

construction equipment and mechanisms imported into the

territory of the Republic of Uzbekistan as per the List approved

by the Cabinet of Ministers.

of 29.01.2009 № PP-1051 "On

Additional Measures to Stimulate the

Expansion of Contract Work on

Reconstruction and Repair of Housing

Stock on a "Turnkey" Basis."

Paragraph 3 of PP-1051 is provided here

as amended by paragraph 1 of Annex 6

to the Resolution of the President of the

Republic of Uzbekistan dated

15.11.2013 № PP-2068

4 Subcontractors Exempt subcontractors till January 1, 2015 from the single tax payment

within the amount of work that they perform under contracts with

contractors that have concluded agreements with the engineering

company LLC "Qishloq Qurilish Invest" in the framework of model

projects based individual housing construction in rural areas on a

"turnkey" basis.

Paragraph 6 of the Resolution of the

President of the Republic of Uzbekistan

of 15.11.2013 № PP-2068 "On the

Program of Construction of Individual

housing in Rural Areas based on

Standardized Projects in 2014"

5 SJC "Uzprommashimpeks" SJC "Uzprommashimpeks" shall be exempt till January 1, 2015 from

customs duties (except customs charges) for imported metal roofing

sheets in amounts according to the appendix №4 as well as from value-

added tax on imported import lumber, roofing metal sheets and chipboard

sold to the engineering company "Qishloq Qurilish Invest".

Paragraph 6 of the Resolution of the

President of the Republic of Uzbekistan

of 15.11.2013 № PP-2068 " On the

Program of Construction of Individual

housing in Rural Areas based on

Standardized Projects in 2014"

6 Enterprises producing

construction materials

(Brick factories and the

plant for production of tile

effect roofing, window

frames and doors)

SJC enterprises producing construction materials, according to the list in

annex №5 shall be exempt till January 1, 2015 from all taxes, mandatory

contributions to state funds (except for the single social tax) and the Fund

for Reconstruction, refurbishment and equipment of educational and

medical institutions.

Paragraph 6 of the Resolution of the

President of the Republic of Uzbekistan

of 15.11.2013 № PP-2068 " On the

Program of Construction of Individual

housing in Rural Areas based on

Standardized Projects in 2014"

7. Individuals (individual

developers)

Extend the application of paragraph 4 of the Decree of the President of

the Republic of Uzbekistan of May 18, 2007 N UP-3878 "On Additional

Measures for Material and Moral Support of Young Families" to the

developers engaged in construction of model projects based private

housing in rural areas through the loans of OJSCB "Qishloq Qurilish

Paragraph 9 of the decree of the

President of the Republic of Uzbekistan

dated 03.08.2009 № PP-1167 "On

additional measures to Scale-up

Housing Construction in the

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Bank", National Bank for Foreign Economic Activity of the Republic of

Uzbekistan and JSIB "Ipoteka Bank ".

(Pursuant to paragraph 4 of UP-3878, the following is excluded from

the taxable income of individuals qualifying as members of "young

families":

- the amount of wages and other taxable income spent on repayment of

mortgage loans and interest accrued for mortgage received for

construction, renovation and purchase of an individual house or an

apartment in a residential apartment building;

- the funds received from a business entity (employer) for the purchase

of housing.

Countryside"

Legal Entities

(Employers individual

developers)

Taxable corporate income is reduced by the sum of:

5) funds allocated gratis for payments of mortgages and (or) for

acquisition of housing by the employees who are forming young families

but not more than 10 percent of the taxable income;

Article 159 (Part I, paragraph 5) of the

Tax Code of the Republic of Uzbekistan

**All of the above-mentioned benefitsare extendedthrough January 1, 2016.

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OJSCB "Ipoteka Bank", JSCB "Qishloq Qurilish Bank"

1) INFORMATION ON THE AVAILABILITY OF LOANS TO INDIVIDUAL

DEVELOPERS FOR CONSTRUCTION OF INDIVIDUAL PROJECTS BASED HOUSING

IN RURAL AREAS.

The following categories of citizens of Uzbekistan are eligible to receive preferential mortgage

loans for individual housing construction in rural areas:

- citizens of the Republic of Uzbekistan in rural areas who are 18 years of age on the day of

applying for a mortgage;

- having, in the past 12 months, a permanent job, a steady income from a personal part-time

farm or a dekhkan farm or self-employment, as well as a source of income that is not prohibited by

law, sufficient for a monthly payment of accrued interest on the mortgage loan and principal

repayment in accordance with the payments schedule;

- having funds for a downpayment of at least 25 percent of the estimated cost of a house under

construction and/or the amount of construction work accomplished and/or construction materials in

an amount of not less than 25 percent of the estimated cost of the house under construction;

- having no overdue loans to credit institutions.

In order to obtain a preferential mortgage, individual developers should apply to a branch of

OJSCB "Qishloq Qurilish Bank".

In accordance with Loan Agreement of October 11, 2013 between the Republic of Uzbekistan

and the Asian Development Bank (ADB), potential borrowers must also meet the following

requirements:

- he/she agrees to use the funds only to finance housing construction in rural areas and is

eligible for only one preferential mortgage loan;

- he/she corresponds to the category of average and low income population –by the threshold

of the Programme for Housing Development in Rural Areas; and

- he/she agrees to reside and not sell or transfer to anyone else the property acquired through

preferential mortgage for at least 5 years from the date of receipt of his/her legal right to a house.

According to the terms of the abovementioned Loan Agreement, preferential mortgage loans

are issued to individual developers in 2014 under the following conditions:

- Loan maturity - 15 years;

- Grace period - 12 months;

- Interest rate at 7% per annum for the first 5 years and at 90% of the refinancing rate of the

Central Bank of Uzbekistan for the remaining 10 years.

One of the types of mortgage loans issued by JSIB "Ipoteka Bank", according to the

established procedure – as approved by the Cabinet of Ministers Resolution № 2 of 03.01.2007 –is

the issuance of mortgage to individual developers for construction of houses, including those in rural

areas, based on individual projects. Construction of a house can be accomplished by a contractor or

independently.

The size of mortgage loan for construction of houses is up to 3000 times the minimum wage.

Mortgage lending is carried out by the mortgage of a house under constructionalong with the right to

the land plot thereof.

To obtain a mortgage, a developer should possess funds of at least 25 percent of the cost of a

house under construction. These funds must be available in national or foreign currency on a savings

deposit bank account opened to the developer's name or be present in the form of completed

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construction works, as well as in the form of building materials purchased by the developer at his

own expense.

Terms for lending to construction companies • The size of the loan issued by a bank for construction of apartment buildings is set at no

more than 70 percent of the construction site

• The interest rate on the loan is set at the current refinancing rate of the Central Bank

• Lending to construction companies that build apartment buildings is made only for

"turnkey" arrangements

• Construction companies are eligible for lending if they have working capital of not less

than 20 percent of the cost of an apartment building under construction, several years of

experience in the construction industry, sufficient material and technical base and qualified

specialists.

The mechanism of housing construction financing Lending to construction companies undergoes the following stages:

• advance payment of up to 50 percent of the total amount of the loan agreement;

• payment for the work actually performed ensured by a field trip to the construction site for

confirmation of targeted use of the credit funds;

Housing apartment buildings is carried out in two directions:

• economical low-expense apartments for young families;

• improved layout apartments.

The price value is determined according to the apartment design cost-sheet. The financing

mechanism for construction and sale of housing is done through separate special bank accounts for

strict accounting of costs of construction and repayment from construction companies. Sales

mechanism involves maintaining double-accountancy on the part of both financing bank and

construction company.

Mechanism for sale of apartments in constructed residential buildings • Sale of apartments at the initial stage of construction allows individuals to accumulate the

downpayment funds (in amount of not less than 25 percent of the purchase price) to the

nominal savings account at the bank before entering a house in operation.

• After commissioning a house, a person (the buyer) receives a mortgage loan;

• After the state registration of the mortgage contract, the accumulated funds of

downpayment and mortgage loan are transferred to a special deposit account of the

construction company.

Incentives provided for construction companies • Loan principal and accrued interest repayment is carried out by the construction company

after actual sale of the apartments;

• In order to reduce the cost per 1 m2 of housing, benefits are provided for acquisition of

construction materials (cement, bricks, metal);

• The interest rate on the loan to the construction company is less than the refinancing rate of

the Central Bank.

Benefits provided to the population.

Program for Support of Young Families:

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• Mortgage loans to young families are issued for a period of not less than 15 years, with a

three-year grace period and an interest rate of an amount not exceeding the current

refinancing rate of the Central Bank;

• Young families have the right to repay the loan and pay interest on it in advance without

any commission fee for early repayment;

• The solvency of a young family is determined based on monthly payments with

consideration of a three-year grace period.

• The taxable income of individuals-members of young families excludes the following:

• salaries and other, otherwise taxable, income if spent on repayment of mortgage loans and

accrued interest;

• funds received from a business entity (employer) to purchase housing.

• business entities can deduct from the tax base the amount funds allocated gratis to make

initial contributions when calculating profits tax or a single tax payment.

In order to support families that do not qualify as the "young families" category, mortgage loans to

purchase housing from the primary market are provided under the following conditions:

• loan maturity is up to 12 years, with a grace period for principal repayment up to 1 year;

• the interest rate is 14 to 16 percent depending on the amount of the downpayment.

Ministry of Labor and Social Security

1) INFORMATION ABOUT THE JOBS CREATEDIN HOUSING CONSTRUCTION IN

RURAL AREAS (HOW STABLE THESE NEW JOBS ARE?DO THEY SUSTAIN AFTER

THE COMPLETION OFRESIDENTIAL AREA CONSTRUCTION?) Construction of standard projects based housing in rural areas involves substantial labor

resources of the country. So for example, construction of a typical 1-storeyed 4-room house takes

about 26 workers while the labor costs are not less than 5445 man-hours. The machine operators

cost is about 352 man-hours. At the same time, the following specialists are involved in

construction: foreman, laborers, concrete workers, brick-masons, slingers, carpenters, tinsmiths,

tilers, plasterer, painters, plumbers, and electricians. In addition, third-party companies work is

involved to produce plastic frames and wooden doors. The following building materials are used in

housing construction: roofing metal sheets, timber, particle board (chipboard), ceramic tile, PVC

window frames, construction glass, gas stove, water heater, heating boiler, heating radiators

(aluminum and iron), electronic electric energy use counters, natural gas consumption consumption

meters are supplied centrally by OOO IK "Kishlok Qurilish Invest". Cement and metal are allocated

as work fundsmaterials from manufacturing plants at discounted prices.

Thus construction of about 10 thousand houses by the end of 2013 involved 54 450 000 man-

hours or about 260 000 people at the same time. Also, such housing construction in rural areas

intensively involves suppliers of building materials, transportation companies for delivery,

installation, landscaping, etc.

Labor costs are also taken into account in setting up external infrastructure for utilities(gas,

electricity, and water supply) and laying roads infrastructureof employees (???) of the respective

ministries and departments (???).

2) WHAT FACTORS VAUSE GROWTH OF THE RURAL POPULATION'S INCOME

IN THE COURSE OF THE PROGRAM FOR THE STANDARDIZED HOUSING

CONSTRUCTION?

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Implementation of construction of standard projects based new housing in rural areas

substantially increases incomes. The main revenue growth is due to construction and repair work,

landscaping, creation of new jobs in the communal service sphere, employment of local workers

during construction and subsequent operation of the infrastructure of the residential areas. New jobs

are created by running bakeries, shops, kindergartens, service industry enterprises: hairdressing, dry

cleaning, etc. Furthermore, households save money due to reduction in transport costs previously

faced due to the need to transport consumer goods and food products; local provision of services etc.

3) AFFORDABILITY OF NEW HOUSING CONSTRUCTION FOR DIFFERENT

CATEGORIES OF PEOPLE IN RURAL AREAS In order to improve the affordability of housing, a number of benefits is provided in construction,

supply of building materials without any import duties (lumber, roofing materials) and acquisition of

housing in installments via discounted mortgage. At the same, a sufficiently long maturity of the

loans at preferential bank rates enables repayment planning for the general population. In addition, a

number of companies, business entities, and commercial banks carry out additional financial support

to its employees as relates to acquisition of housing in rural areas, such as provision of the

downpayment, transfer of certain amounts of wages to repay mortgages.

4) IS THERE AND WHAT KIND OF ADDITIONAL SUPPORT MEASURES FOR NEW

HOUSING CONSTRUCTION IS AVAILABLE TO LOW-INCOME POPULATION IN

RURAL AREAS? According to paragraph 4 of the Decree of the President of the Republic of Uzbekistan dated

May 18, 2007, № UP-3878 "On Additional Measures for Material and Moral Support for Young

Families", the taxable income of individuals - members of young families excludes:

- the amount of wages and other taxable income spent on repayment of principal and interest

accrued of mortgage loans received for construction, renovation and purchase of an individual house

or an apartment in a residential apartment building;

- the funds received from a business entity (employer) for the purchase of housing.

Changes in the level of urbanization in Uzbekistan (Average per year)

Population 1993 2003 2013

Total population 100.0 100.0 100.0

Percentage of rural population

in%

60.8 63.4 49.0

Urban population in% 39.2 36.6 51.0

Estimated number of households

(Based on sample surveys of households), in thousands

1993 2003 2013

Total 4524.3 5051.6 6010.3

including urban areas .... 2158.2 3314.0

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Rural area 2893.4 2696.3

The results of the housing construction stimulation in the Republic of Uzbekistan:

Increasing social wellbeing by provision of the demand of the population for comfortable

housing;

Rapid development of housing construction, especially in small towns and rural areas;

Changing face of cities. The entire neighborhoods with infrastructure emerge;

Enterprises producing modern, efficient, market-demanded building materials are created;

New jobs are created;

In recent years, new developers have emerged that have acquired experience in the

construction industry to form a sufficient logistical basis.

Gosarkhitektstroy (The State Architecture and Construction Committee)

1) BY WHOM AND HOW THE DEMAND FOR NEW HOUSING IN SPECIFIC RURAL

AREAS IS ASSESSED? The assessment of housing needs is informed by the requests of local khokimiyats based on the

real housing needs of rural residents of the regions.

2) HOW A BALANCE IS ENSURED BETWEEN THE HOUSING NEEDS OF

INDIVIDUAL FAMILIES (IN TERMS OF THE AREA AND NUMBER OF ROOMS IN A

RESIDENTIAL BUILDING) AND THE GENERAL PLAN FOR THE TERRITORY

ALLOCATED TO FOR CONSTRUCTION OF A NEW HOUSING ESTATE?

3) WHAT MECHANISMS PROVIDE INVESTMENTS IN MUNICIPAL

INFRASTRUCTURE (ELECTRICITY, GAS, WATER, AND SEWER) WHEN BUILDING

NEW HOUSING ESTATES IN A RURAL AREA?

4) WHAT ARE THE PRIORITIES WHEN MAKING DECISIONS ABOUT

INVESTMENT IN NEW HOUSING AND INFRASTRUCTURE IN RURAL AREAS? WHO

MAKES THE DECISION TO INVEST?

5) IS A CONTRACT MADE BETWEEN INDIVIDUAL DEVELOPERS AND THE

ENGINEERING COMPANY "KISHLOKKURILISHINVEST"? IF SO, WHAT ARE THE

TERMS AND CONDITIONS?

6) CAN A HARDCOPY OF OR A WEB LINK TO THE GENERAL/SITUATIONAL

PLANS FOR THE LARGER CITIES BE PROVIDED?

7) SECTION IV ON URBAN DEVELOPMENT AND PLANNING STATES THAT " ...IN

2010, THE PRESIDENTIAL DECREE INSTRUCTED THE RELEVANT MINISTRIES

AND DEPARTMENTS... " (WHAT ARE THOSE MINISTRIES/DEPARTMENTS?) FOR

"HOUSING CONSTRUCTION IN RURAL AREAS": IS THERE ANY PLAN OR MAPPED

SURVEY OF THESE DEVELOPMENTS IN THE COUNTRYSIDE?

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8) THE SAME DOCUMENT, IN MANY PARTS MENTIONS A MANDATORY

"STANDARDIZED PROJECT" FOR RURAL HOUSING DEVELOPMENT: WHAT DOES

IT MEAN? IS THIS A RULE IN PLANNINNG OR DESIGN? ARE THOSE AVAILABLE

FOR A CLOSER LOOK?

9) ARE THERE ANY AVAILABLE ASSESSMENTS OR PLANS OF INDUSTRIAL

DEVELOPMENT OF FIEZ IN NAVOI AND ANGREN AND DZHIZAK?

10) IS THERE AN ENGLISH VERSION OF "THE URBAN CODE OF THE REPUBLIC

OF UZBEKISTAN" AVAILABLE AS AMENDED BY THE LAW NUMBER ZRU-278 OF

04.01.2011?