The World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), and the Government of Uzbekistan have announced a landmark financial package to fund a 250-megawatt (MW) solar photovoltaic plant, integrated with a 63-MW battery energy storage system (BESS). This initiative, aimed at enhancing electricity access for approximately 75,000 households, represents Central Asia’s first renewable energy project to include a BESS component.
Innovative Energy Solutions
The integrated BESS will significantly enhance the efficiency and flexibility of Uzbekistan’s power system, providing greater supply security and mitigating the intermittency of renewable energy sources. The project will be located in the Alat district of the Bukhara region and is expected to generate over 585 gigawatt hours of renewable energy annually, reducing CO2 emissions by more than 327,000 metric tons each year.
Comprehensive Financing Package
The financing package features a $53 million loan from the International Finance Corporation (IFC), along with loans totaling up to $106 million from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO), and Japan International Cooperation Agency (JICA). Additionally, IFC will provide interest rate swaps for the entire debt amount to manage interest rate risks effectively. The World Bank is also providing a $12 million guarantee to support the government’s payment obligations under the project.
Blended finance support includes concessional senior loans of $20 million each from the Canada-IFC Blended Climate Finance Program and the ADB-managed Leading Asia’s Private Sector Infrastructure Fund (LEAP).
Strategic Partnership and Competitive Tendering
As the lead transaction advisor, IFC collaborated with the Uzbek government to structure a transparent and competitive tender. Masdar, the UAE’s flagship renewable energy company, was announced as the winning bidder for the PPP tender in December 2022. The project will be implemented through Nur Bukhara Solar PV LLC FE, a project company owned by Masdar. This entity is responsible for the development, financing, construction, ownership, operation, and maintenance of the solar plant and BESS, selling electricity to Uzbekistan’s state-owned National Electric Grid under a 25-year Power Purchase Agreement.
Commitment to Renewable Energy
Uzbekistan aims to scale up renewable energy generation to 25 GW, or 40% of its total electricity consumption, by 2030. This project aligns with the country’s clean energy transition goals and supports its economic growth. 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.
Statements from Key Stakeholders
Wiebke Schloemer, IFC Director for Türkiye and Central Asia, emphasized the project’s role in bringing clean and sustainable energy to Uzbekistan at competitive prices. Marco Mantovanelli, World Bank Country Manager for Uzbekistan, highlighted the project’s contribution to enhancing the country’s energy security through innovative solutions and private sector participation.
Expanding Renewable Capacity
The World Bank and IFC have been pivotal in supporting Uzbekistan’s renewable energy sector. They have provided guarantees, financing, advisory, and technical assistance for several projects, including a 100 MW solar plant in Navoi (operational since 2021), 440 MW solar plants in Samarkand and Jizzakh (under construction), and a 500 MW wind power plant in Navoi (under construction). The new Bukhara project will increase the renewable energy generation capacity supported by the World Bank Group to about 1.3 gigawatts.
