The World Bank has approved a $150 million concessional credit to support Uzbekistan in enhancing its small hydropower (SHP) sector and strengthening electricity supply across the country. This initiative will involve private sector participation, including local small hydropower developers and banks.
Uzbekistan's electricity demand is expected to double by 2030, surpassing 120 billion kilowatt-hours. Despite increased production, about 10 percent of demand remains unmet, leading to power outages in underserved regions and rural areas due to transmission and distribution issues.
Small hydropower plants (SHPPs), with capacities ranging from 100 kW to 5 MW operating on existing irrigation canals, are seen as a practical solution for improving supply reliability and supporting regional development. SHPPs are cost-efficient, require minimal maintenance, and leverage Uzbekistan’s irrigation canal network, presenting an attractive opportunity for private investors interested in small-scale renewable energy.
"The Government of Uzbekistan plans to establish nearly 3,000 SHPPs, increasing installed capacity to 160 MW by 2026 and providing electricity to an additional 280,000 people," said Tatiana Proskuryakova, World Bank Director for Central Asia. "The new World Bank-funded project, to be implemented by the Ministry of Energy between 2025 and 2030, will support this goal by providing local developers with access to finance for launching new SHPPs, delivered through local banks. The project will also help mobilize around $38 million in commercial financing to expand hydropower infrastructure nationwide."
By 2030, the project aims to support investments in SHPPs with a total installed capacity of up to 150 MW and is expected to generate over 520 gigawatt-hours of green energy annually. Additionally, it aims to reduce greenhouse gas emissions by up to 430,000 tons of CO₂.
Around 270 suitable sites for SHPP construction have been preliminarily identified along existing irrigation canals. Most sites (93 percent) have capacities between 100 kW and 1,000 kW.
Electricity generated by project-financed SHPPs will be purchased by JSC Regional Electric Power Networks. This provides a reliable renewable energy source that diversifies the power mix and improves energy supply in underserved regions and rural areas.
The project also has potential benefits such as stimulating job creation and production in relevant industries and SMEs while boosting local economic activity contributing further towards regional development.