The key facts

  • $200 million loan from ADB for electricity distribution modernization; the agreement was signed on October 15 in Bangkok.
  • Reconstruction of 60 substations and introduction of digital grid management systems.
  • Connection of at least 3.3 GW of renewable sources and a reduction in emissions of approximately 23 thousand tons of CO2 equivalent per year is expected.

Loan agreement

The Asian Development Bank (ADB) will provide Uzbekistan with a loan of $200 million to modernize the electricity distribution system. This was reported by the bank's press service. The loan agreement was signed on October 15 in Bangkok (Thailand) by ADB President Masato Kanda and Deputy Prime Minister of Uzbekistan — Minister of Economy and Finance Jamshid Kuchkarov.

What is included in the program

Under the program, reconstruction and modernization of 60 electric distribution substations important for the country will be carried out across the entire territory of Uzbekistan. To improve grid management, the introduction of digital systems is planned.

Problems the project aims to address

According to the ADB, economic growth, urban expansion, and the population's growing demand for electricity are increasing the load on the grids. Outdated infrastructure, electricity losses, and equipment overload reduce the reliability of power supply and make it difficult to connect new renewable energy capacities to the grid.

Expected results

As a result of the program's implementation, a reduction in electricity losses, a decrease in transformer overload, and improved stability of power supply are expected. Conditions will also be created for connecting renewable energy sources with a capacity of at least 3.3 GW to the power grid. Greenhouse gas emissions are planned to be reduced by approximately 23 thousand tons in terms of carbon dioxide equivalent per year.

Institutional objectives and program features

The project is also aimed at increasing the capacity of JSC 'Uzbekistan National Electric Grids' in the use and management of grids. The program's objectives include developing the technical skills of employees, strengthening management and financial control systems, improving qualifications, as well as expanding women's participation in the energy sector. According to the ADB, this is the bank's first energy program implemented under the full mutual trust mechanism with the World Bank, as well as the first program in Uzbekistan's energy sector based on results-linked loans. This mechanism allows the ADB and the World Bank to use each other's comprehensive assessments and project implementation procedures, which reduces duplication of work and transaction-related costs.