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Two state-owned companies held inside Uzbekistan’s National Investment Fund are being prepared for stock-market listings in 2027, with Uzbektelecom identified as the most advanced candidate, according to Marius Dan, chief executive for Central Asia at Templeton Global Investments, the Franklin Templeton subsidiary that manages the fund.
The fund — known by its Uzbek acronym UzNIF — raised close to $700 million through a dual listing on the London and Tashkent stock exchanges in May 2026, the first equity offering from Uzbekistan on an international capital market. Its portfolio spans stakes in 13 state-owned enterprises, including Uzbekistan Airways, Uzbektelecom, SQB bank and a cluster of energy-sector companies. Dan said the shares now trade at a small premium to net asset value (NAV), which he described as the highest valuation relative to NAV among all publicly listed closed-end investment funds globally — a signal, in his view, of investor confidence in the pace of reform.
Uzbektelecom first, more to follow
Dan named Uzbektelecom as the likeliest first portfolio company to list, pointing to revenue growth, improved profitability and the recent addition of independent directors to its supervisory board. SQB, the state-owned bank, has undergone similar governance changes and is also considered a strong IPO candidate, though Dan declined to specify its listing date. A presidential decree sets out six portfolio companies earmarked for public offerings over the next three years; if all proceed, UzNIF would shift from a predominantly private-company portfolio to one composed mainly of listed assets.
Uzbekistan Airways is being prepared for an eventual IPO but Dan cautioned that timing remains uncertain. Franklin Templeton is overseeing more than 120 transformation initiatives at the airline, and he said the impact of those measures needs to feed through into audited financial results before a listing can be pursued at maximum valuation. Rising fuel costs driven by geopolitical pressures have weighed on the sector globally, though Dan said the airline’s cost structure gives it a relative advantage over some regional and international peers.
A newer and less-discussed asset is Temiryo’l Infratuzilma, the rail-infrastructure company created when Uzbekistan’s railway holding was split into separate operating and infrastructure entities. Dan described it as potentially a significant regional player given Uzbekistan’s position along the Middle Corridor trade route, but acknowledged that the company is at an early stage: tariff regulation for rail infrastructure still needs to be properly established, and a new chief financial officer has only recently been appointed. He said investors can expect greater transparency and more detailed financial reporting as a result.
Dividends in 2028, energy reform the key variable
Shareholders in UzNIF should not expect dividend payments before the first half of 2028. Dan explained the sequencing: portfolio companies will report 2026 results, make dividend recommendations in the first half of 2027, and UzNIF will then consolidate those receipts into its own audited 2027 accounts before its supervisory board can propose a distribution for shareholder approval. He described an approximately 18-month lag between a portfolio company’s financial year-end and cash reaching fund shareholders as normal for vehicles of this type. He declined to give a yield forecast but said a 50 percent payout ratio represents the right balance between reinvestment and distribution as a general principle. An exception was made for SQB’s 2025 dividend — which would have been paid in 2026 — to allow the bank to reinvest its profits and sustain growth.
The energy companies in the portfolio — Regional Electric Networks, National Electric Networks of Uzbekistan, Khududgaztaminot, Uzbekhydroenergo and Thermal Electric Stations — have historically been loss-making and collectively represent a large share of the fund’s assets. Dan said Franklin Templeton is working with the government on regulatory reform, including further steps toward RAB-based tariff regulation, which links permitted returns to the regulated asset base. He was careful to note that UzNIF does not set tariff policy; its role is to push for better corporate governance and financial discipline within the companies. Uzbekistan has set targets of roughly 90 billion kilowatt-hours of electricity generation in 2026, rising to more than 129 billion kilowatt-hours annually by 2030, and Dan said all the energy companies in the portfolio will require substantial capital investment to meet those goals reliably.
Investor interest growing
More than 250 investors attended Franklin Templeton’s latest Tashkent roadshow events, a figure Dan said was 50 to 60 percent higher than the equivalent gathering a year earlier. More than 60 percent of this year’s attendees were encountering Uzbekistan as an investment destination for the first time. Collectively, the institutions represented at the events manage assets exceeding $2 trillion. The May IPO itself drew more than 160 institutional investors; Dan said that number has significant room to grow. Franklin Templeton has also held investor events in London and New York.
Portfolio companies are independently valued each month by one of the Big Four accounting firms, with NAV published on a monthly basis. Dan said the near-10,000-strong shareholder base — a mix of international institutions and Uzbek retail investors — creates an ongoing obligation to deliver positive returns, and that the primary investment case for UzNIF remains NAV growth rather than near-term income.