OBJECTIVE, ACTIVITIES AND DELIVERABLES

The main objective of the assignment is to assist the Government of Uzbekistan in developing fossil fuel subsidy reform plan through providing expertise on conducting impact assessment and developing reform scenarios for production and consumption subsidies, raising awareness, and building support for the reforms among stakeholders.

Therefore, under the supervision of the Team Leader and Deputy Team Leader of the GETAP and in coordination with the selected expert or a consulting firm will carry out the following activities:

1.1     Activity 1.

1.1.1    Review and Enhance Fossil Fuel Subsidy Inventory Report.

Fossil Fuel Subsidy Inventory Report, prepared in the previous phase of the TA will be reviewed and enhanced / upgraded. The enhanced report will:

      I.                Present the rationale for fossil fuel subsidy reform.

    II.                Analyse all forms of subsidies: direct transfer of governmental funds, tax expenditure and other government revenue foregone, induced transfers (price support), transfer of risk to the government, and other forms of subsidies.

   III.                Provide recommendations on policy options for phasing out subsidies.

1.1.2    Short Review of other recent reports focusing on Energy Subsidies

      I.        This will include recent reports prepared under the auspices of UNDP, World Bank, other organisations, and that may review other methodology subsidies and that will include tentatively Shadow Price methodology and inventory .

Deliverables: Enhanced and validated Fossil Fuel Subsidy Report.

1.2     Activity 2. Report on Impact Assessment and Fossil Fuel Subsidy Reform Policy Scenarios.

This activity includes two components: (i) assessing the social and environmental costs and benefits to the continuation or phasing out the subsidies, and (ii) developing fossil fuel subsidy reforms policy scenarios, completed with mitigation measures to put in place to limit impact on vulnerable firms and households.

The Final Report will analyse the potential impacts of declining fossil fuel industry; evaluate possible policies to address economic, environmental, and social impacts; identify options for economic diversification, social safety nets, and new employment; develop fossil fuel subsidy reforms policy scenarios and describe methodology behind the scenarios development; develop recommendations on policy options based on scenarios.   

Deliverables: A Report on the Design of Fossil Fuel Subsidy Reforms in Uzbekistan, prepared in English and about 50 pages long, covering the following:

a)    social, environmental and environmental assessment of fossil fuel subsidy reform options

b)    presenting scenarios for the gradual phase out of the fossil fuel subsidies.

A preliminary outline of the Report content:

      I.                Foreword

    II.                Executive Summary

   III.                Introduction

  IV.                General overview of previous Report (the macroeconomic situation in Uzbekistan and the role of the fossil fuel subsidies, the energy sector, and the fossil fuel subsidies assessment, etc.)

    V.                Methodology

  VI.                The size of fossil fuel subsidies and impact of their reforms, using the standard methodology of CBA (Costs and Benefit Analysis), estimating subsidies, impacts of fossil fuel subsidy reforms - on public finances, the economy, households (social), businesses and industry, the energy sector, and the environment, etc.

 VII.                Fossil fuel subsidy reforms: past and current reform initiatives and their effectiveness, effect of reforms on the vulnerable people, available and proposed policy instruments, social assistance programs in reform implementation and the ways of their improvement, etc.

VIII.                Fossil fuel subsidy reforms policy scenarios (scenarios assumptions, modelling methodology, modelling results mainly on fossil fuel subsidy impact areas, etc.)

  IX.                Conclusions and recommendations (policy options based on scenarios analysis, etc.)

    X.                References

  XI.                Annexes

1.3     Activity 3. Stakeholder Workshop

A stakeholder workshop will be organised to present the report, collect feedback, and discuss possible steps for the planning and implementation of the fossil fuel subsidies reform in Uzbekistan. The workshop can be carried out either in the online or offline format.

Deliverables: Developed materials for the stakeholder workshop and a report of the workshop results.

2      TENTATIVE WORKPLAN AND TIMEFRAME

The selected expert or a consulting firm will implement the assignment through regular field missions combined with a remote work. If necessary, identify the needs in complementary short-term expertise.