- EBRD, DEG, OFID and commercial banks provide US$ 752 million loan to ACWA Power
- Saudi developer to build and operate 1,500MW gas-fired power plant in south Uzbekistan
- Significant CO2 reduction and greater efficiency of power sector
The European Bank for Reconstruction and Development (EBRD) is taking concrete steps to support Uzbekistan’s ambitious objective of achieving carbon neutrality in its power sector by 2050.
A loan to support the construction of a 1,500MW combined-cycle gas-fired power plant in the Syrdarya region of the country will be the first transaction following a Memorandum of Understanding on long-term decarbonisation strategy [LINK] signed between the EBRD and the government of Uzbekistan.
The EBRD’s financing of up to US$ 200 million will help construct and operate a highly efficient power plant and associated infrastructure, replacing a 1,170MW old generation capacity at the existing Syrdarya thermal power station.
The EBRD’s loan will be complemented with a financial package of up to US$552 million provided by the German Investment Corporation (DEG), the OPEC Fund for International Development (OFID) and a group of commercial lenders under a guarantee by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group.
The new gas-fired plant, which will be owned and operated by ACWA Power International of Saudi Arabia, will provide the required base load power to complement and facilitate the rapidly growing renewable generating capacity additions to the grid. Once operational, it will help cut CO2 emissions by more than 2.6 million tonnes per year.
Uzbekistan has one of the highest carbon intensities among all EBRD economies, exceeding similar indicators in other countries by almost 1.5 times. The reduction of carbon-intensive generation facilities and the increased use of natural gas as a transitional fuel is essential for the development of renewable power generation. The Bank, which is set to become fully aligned with the Paris Agreement by early 2023, is helping the country to also align the development of its power sector with the Agreement.
For this it is important to upgrade Uzbekistan’s inefficient gas-fired generation fleet with an age frequently between 40 and 50 years. The depreciated electricity system puts in jeopardy the sustainable development and decarbonisation of the sector, makes the supply of electricity unreliable and inflates maintenance costs.
The EBRD is already supporting the replacement of Uzbekistan’s ageing power sector infrastructure and the establishment of an effective regulatory framework, which has now paved the way for the first competitively tendered renewable energy project in the country.
Strengthening economic inclusion, ACWA Power will also develop specialised vocational programmes on combined-cycle technologies and green skills for young women and men. It will also help retrain employees from the existing power plant to work at the new facility.
To date, the EBRD has invested over €2 billion through 92 projects in the economy of Uzbekistan.