World Bank directors approve $380m loan for Uzbekistan grid upgrade

The executive directors of the World Bank have approved the allocation of a $380m loan for the implementation of a major project by Uzbekistan’s National Grid to upgrade the country’s transmission and distribution (T&D) infrastructure and digitalise the system

 

The executive directors of the World Bank have approved the allocation of a $380m loan for the implementation of a major project by Uzbekistan’s National Grid to upgrade the country’s transmission and distribution (T&D) infrastructure and digitalise the system.

The grid upgrade project will be supported by a $380m loan from the International Development Association (IDA) and a $43m loan from the Green Climate Fund (GCF) under the Sustainable Renewables Risk Mitigation Initiative.

The government of Uzbekistan will receive the financing at very-low interest rates, with the longest repayment period of up to 40 years. The GCF will also provide a $4m grant to cover selected project activities.

“This new transformational project supports the Government’s goal of removing barriers to the effective operation and growth of the electricity sector. It will create the conditions for transforming the NEGU into a modern and commercially run company and modernizing the national power transmission system. These measures will ensure reliable electricity supply for approximately 32 million consumers and, importantly, enable the grid integration of new large-scale renewable energy generation projects,” Marco Mantovanelli, World Bank Country Manager for Uzbekistan, was quoted in a press statement released by Uzbekistan’s Ministry of Energy.

The project will aim to modernise outdated energy infrastructure by financing a part of the National Grid’s investment programme. This will include rehabilitation, upgrade and expansion of 22 existing substations which are currently not in operation. The scheme will also include the development of a new 500kV transmission substation and associated transmission lines in 11 regions of Uzbekistan.

The project will introduce modern digital and telecommunication technologies and solutions to improve the process of monitoring, control, and operation of the power transmission system. This will include the installation of a new Supervisory Control and Data Acquisition (SCADA) and Energy Management System (EMS) for the NEGU’s central and regional dispatch centers to replace the outdated systems placed in operation during the Soviet era.

The project aims to play a key part in readying the country’s infrastructure for the integration of significant renewable energy capacity, which is being developed by international developers.

Energy & Utilities reported in May that UAE-based Masdar had been selected as winning bidder to develop two photovoltaic (PV) solar projects in Uzbekistan with a combined total generation capacity of 440MW following a competitive tender.

Energy & Utilities reported in April that eight groups had submitted bids for the second project to be developed under the IFC’s scaling solar programme in Uzbekistan, which will involve developing PV solar parks at Samarkand and Jizzakh. The projects are being developed under the independent power producer (IPP) model.

In May, Saudi Arabia’s Acwa Power signed the implementation agreement with the Uzbekistan Ministry of Energy for a planned 1,500MW wind farm in Uzbekistan, which will be one of the largest wind farms in the world when completed.

Acwa Power signed the implementation agreement with the Uzbekistan’s Ministry of Investments & Foreign Trade and Ministry of Energy for the independent power producer (IPP) project, which will be located in the Karakalpakstan area of Uzbekistan.

The programme to upgrade Uzbekistan’s grid is envisaged to build the foundations of a competitive electricity market in Uzbekistan, and will also help contribute to the development of a regional electricity trade in Central Asia through rehabilitating and expanding transmission infrastructure connecting Uzbekistan with Afghanistan, Kazakhstan and Tajikistan’s networks.