The Asian Development Bank (ADB) and the government of Uzbekistan have signed a $200 million loan agreement. The funds will be used to modernize 60 substations and introduce digital systems for managing power grids, according to a press release from the international financial institution.
The agreement was signed by ADB President Masato Kanda and Uzbekistan's Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov. It is the first energy project implemented under the ADB–World Bank Framework for Full Mutual Reliance.
The initiative is driven by Uzbekistan's economic growth and the expansion of its cities, which are placing an increasing load on the power system. To reduce losses, the project will rebuild and modernize substations and strengthen the capacity of JSC National Electric Networks of Uzbekistan in grid operations.
The investment is expected to ease transformer overloads and improve the reliability of the electricity supply. It will also make it possible to connect at least 3.3 GW of renewable energy capacity to the grid and cut greenhouse gas emissions by almost 23,000 tonnes of carbon dioxide equivalent a year. The project also aims to upgrade the skills of the national company's employees and strengthen its management and financial control systems.
The program will continue ADB's support for the development of Uzbekistan's energy sector. The bank noted that since 2010 it has provided the government with more than $3.4 billion for similar initiatives.
«Reliable electricity is one of the core obligations a modern economy owes to its people. This agreement will help Uzbekistan meet that obligation amid rising demand. Strengthening the grid will improve the reliability of power supply for households, businesses and government institutions, and allow more electricity from renewable sources to be transmitted,» said ADB President Masato Kanda.
ADB is the lead lender for the program, but the World Bank is also likely to join the financing effort. This October, a proposal to provide Uzbekistan with an additional $100 million is due to go before the institution's Board of Directors for approval.
Uzbekistan became a partner of the Asian Development Bank in 1995. Over 30 years of cooperation, the lender has provided the Central Asian republic with loans, grants and technical assistance totaling $15 billion.
