ADB and Uzbekistan sign $200mn deal to modernise power grid
The Asian Development Bank (ADB) and Uzbekistan have signed a $200mn loan agreement to modernise 60 electricity substations across the country, reduce power losses and improve the reliability of electricity supplies.
The agreement was signed on 15 October in Bangkok by ADB President Masato Kanda and Uzbekistan’s Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov, according to the bank’s press statement shared with Kursiv Uzbekistan.
The financing will support the Modernization of Electricity Distribution Systems Program, which aims to upgrade ageing infrastructure and introduce digital technologies to improve network management.
The project is expected to help Uzbekistan accommodate at least 3.3 gigawatts of renewable energy capacity while reducing greenhouse gas emissions by nearly 23,000 tonnes of carbon dioxide equivalent annually.
«A reliable power supply is one of the most basic promises a modern economy must keep to its people,» Kanda said.
«This agreement will help Uzbekistan keep that promise as demand rises, with stronger networks that serve families, businesses, and public institutions and can carry more renewable energy.»
World Bank could provide another $100mn
The programme will also strengthen the operational capacity of the National Electric Grid of Uzbekistan, including staff training, financial management and technical expertise.
The bank expects the investments to reduce transformer overloading and electricity losses, which have placed additional pressure on the country’s power infrastructure as industrial activity and household consumption increase.
The project is ADB’s first energy operation under its Full Mutual Reliance Framework with the World Bank, which allows the two institutions to share due diligence and implementation arrangements.
ADB will serve as the lead lender, while World Bank management is expected to seek board approval later in October for an additional $100mn in financing.
If approved, the combined funding would reach $300mn.
The agreement forms part of Uzbekistan’s 2030 Strategy, which prioritises energy efficiency and expanding renewable electricity generation.
Since 2010, ADB has provided more than $3.4bn in financing and guarantees to Uzbekistan’s energy sector, supporting electricity generation, transmission and distribution projects.
The latest programme will also promote greater participation of women in the energy industry through workforce development and training initiatives.
