World Bank approves $100 million for modernization of Uzbekistan's power grids

A loan for upgrading distribution networks

On October 27, the Board of Executive Directors of the World Bank approved a $100 million loan to improve the efficiency and reliability of Uzbekistan's electricity distribution system. This was announced by the bank's press service; the report on the decision was prepared by Gazeta.uz.

What the program includes

The funds are allocated under the 'Modernization of Electricity Distribution Systems' program implemented by JSC 'National Electric Grid of Uzbekistan'. The main goal is to expand the grid's capacity to receive energy from renewable sources and deliver it to consumers. The program provides for the modernization and digitalization of 60 key substations across the country, as well as strengthening the company's institutional capacity: improving financial management, enhancing cybersecurity, complying with environmental and social standards, and ensuring gender equality in employment.

Expected results and financing

According to the bank's estimates, by 2031 annual electricity losses at the modernized substations will decrease by 20,000 MWh, conditions will be created for integrating at least 3.3 GW of renewable energy capacity into the grid, and greenhouse gas emissions will be reduced by an amount equivalent to almost 23,000 tons of CO2 per year. Within five years after the facilities are commissioned, about 11,700 additional jobs are expected to be created.

Co-financing with the ADB

The World Bank is financing the program together with the Asian Development Bank under the Full Mutual Reliance Framework (FMRF), which provides for a unified approach by the two institutions to preparation and implementation oversight — this reduces transaction costs and eliminates duplicated procedures for the government. The ADB approved a $200 million loan on September 30; taking into account the World Bank loan and the government's contribution of $71 million from the state budget, the total financing amounts to $371 million.

Context: why the grids need upgrading

The World Bank's statement notes that a significant part of Uzbekistan's distribution networks was built several decades ago, and many substations operate under overload — this leads to electricity losses and interruptions in power supply to households, businesses and social infrastructure, including schools and medical facilities. The country's goal is to bring installed renewable energy capacity to 25 GW by 2030, which requires more advanced grid infrastructure. The World Bank Regional Director for Central Asia, Najy Benhassine , emphasized that reliable electricity supply is critical for daily life, job creation, public services and economic growth, and that the partnership with the ADB allows financial resources to be used more effectively.