WB to support modernisation of Uzbekistan’s electricity sector

The World Bank’s board of executive directors has approved the Electricity Sector Transformation And Resilient Transmission Project, which aims at improving the performance of the National Electric Grid of Uzbekistan (NEGU). The project is set to ensure reliable energy supplies to millions of households and businesses across the Central Asian country.

It will be supported by $380mn in credit from the International Development Association (IDA), and a $43mn loan from the Green Climate Fund (GCF). The Uzbek government is to receive this financing at “very low-interest rates” and “with the longest repayment period” of up to 40 years. The GCF is also to provide a $4mn grant to cover selected project activities.

In Uzbekistan, electricity demand is expected to grow to over 100 TWh by 2030, a significant increase from 61 TWh in 2018. The country has more than 250,000 km of electricity transmission and distribution lines, most of which were built during the Soviet period and are now past their useful economic life.

The obsolete infrastructure results in high electricity losses, estimated at 20% of net generation, and frequent power outages undermining economic activities and the well-being of citizens across the country.

“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 turning 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 32mn consumers and, importantly, enable the grid integration of new large-scale renewable energy generation projects,” said Marco Mantovanelli, World Bank Country Manager for Uzbekistan.

The project aims to help in modernisation of outdated energy infrastructure by financing a part of NEGU’s priority investment program. Among other activities, it will include rehabilitation, upgrade, and expansion of 22 existing obsolete high-voltage substations and construction of a new 500 kV transmission substation and associated transmission lines in 11 regions of Uzbekistan.