EBRD co-finances major renewable energy and battery project in Central Asia

• EBRD providing US$ 142 million for major renewable-energy and battery development in Uzbekistan
• Funds will help to construct 1 GW of solar and 1,336 MWh of battery energy storage capacity
• New solar plants will be owned by ACWA Power and Japanese investors

The European Bank for Reconstruction and Development (EBRD) is providing a comprehensive financing package of US$ 142 million (€121 million) for two special-purpose vehicles (SPVs) that will develop Uzbekistan’s and Central Asia’s largest combined solar photovoltaic and battery energy storage project to date.

The two SPVs (ACWA Power Sazagan Solar 1 and ACWA Power Sazagan Solar 2) will be majority owned by ACWA Power – an international developer, investor, co-owner and operator of a portfolio of power-generation and desalinated-water-production plants. The SPVs will be co-owned by Sumitomo Corporation, Shikoku Electric Power Company and Chubu Electric Power Company. The investment marks the first foray into renewable-energy and battery energy storage systems (BESSs) in Uzbekistan by the Japanese investors. 

The financing package consists of two senior secured loans. The first loan, of US$ 61 million (€52 million equivalent), will be provided to ACWA Power Sazagan Solar 1 for the development, construction and operation of a 500 MW solar photovoltaic power plant and a 668 MWh BESS in the Samarkand region of Uzbekistan. The second loan, of US$ 81 million (€69 million equivalent), will be made available to ACWA Power Sazagan Solar 2 for the development, construction and operation of a 500 MW solar photovoltaic power plant in the Samarkand region and a 668 MWh BESS in Uzbekistan’s Bukhara region.

The project is expected to be co-financed by the Japan Bank for International Cooperation, Nippon Export and Investment Insurance covered lenders, the Asian Development Bank and Islamic Development Bank. Together, the two SPVs will introduce the largest combined solar photovoltaic (1 GW) and BESS (1,336 MWh) capacity in Uzbekistan and across the region. This unprecedented deployment of BESS capacity will help the grid to mitigate the intermittency of renewable energy sources. The BESS technology will improve grid reliability and flexibility by making additional energy capacity available during periods of peak demand. 

The project will contribute to the government’s renewables plan, which is supported by the EBRD and targets the development of 25 GW of solar and wind capacity by 2030. Once commissioned, the new renewable energy capacity is expected to generate around 2,300 GWh of electricity per year that can power 600,000 households annually. 

The EBRD is a major financier of green energy projects in Uzbekistan. To date the Bank has supported 1.65 GW of wind capacity, 1.4 GW of solar photovoltaic and 334 MW/501 MWh of BESS in the country – projects sponsored by experienced international developers.  

The EBRD has invested over €5.35 billion in Uzbekistan to date across 188 projects, with the majority of this funding supporting private entrepreneurship, contributing to the country’s economic development.