TASHKENT, May 21, 2024 — A new solar photovoltaic plant and battery energy storage system (BESS) are set to be constructed in Uzbekistan, thanks to a financial package signed by the World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), and the Government of Uzbekistan. The project, which will have a capacity of 250 megawatts (MW) with a 63-MW BESS, aims to provide clean and reliable electricity access to approximately 75,000 households.
This initiative marks Central Asia's first renewable energy project with an integrated BESS component. The inclusion of this innovative element is expected to enhance the efficiency and flexibility of the power system, ensuring greater supply security and mitigating the intermittency associated with renewable generation.
The financing package includes up to $53 million loan from IFC and loans for up to $106 million from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO) and Japan International Cooperation Agency (JICA). These funds will support the construction and operation of the new plant. Additionally, IFC will provide interest rate swaps for the entire debt amount, allowing effective management of interest rate risks.
The World Bank is offering a guarantee of up to $12 million to back the government’s payment obligations under this project. The investment package also comprises blended finance support in the form of concessional senior loans of $20 million each from the Canada-IFC Blended Climate Finance Program and ADB-managed Leading Asia’s Private Sector Infrastructure Fund (LEAP).
Projected to cut over 327,000 metric tons of CO2 emissions annually by generating more than 585 gigawatt hours of renewable energy per year, the solar power plant will be located in Alat district in Bukhara region.
As part of its efforts to meet increasing energy demand among its citizens and economy while scaling up renewable energy generation, the government of Uzbekistan aims to generate up to 25 GW, or 40 percent of the country’s overall electricity consumption, from renewable sources by 2030. In this context, the World Bank Group is assisting Uzbekistan in developing 2,000 MW of solar and 500 MW of wind energy by attracting private sector investments.
The project will be implemented through a project company Nur Bukhara Solar PV LLC FE owned by Masdar. The company will be responsible for developing, financing, building, owning, operating, and maintaining the solar plant and BESS. The electricity generated will be sold to the state-owned National Electric Grid of Uzbekistan JSC under a 25-year Power Purchase Agreement for the project.
The World Bank and IFC have been providing guarantees, financing, advisory, and technical assistance support to the government for launching several plants. With this new project in Bukhara region, the renewable energy generation capacity supported by the World Bank Group’s operations will increase to about 1.3 gigawatts.