ADB $300 Million Loan to Give Uzbekistan Power Plant New Lease of Life

News Release | 15 July 2014

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a $300 million loan to upgrade Uzbekistan’s Takhiatash thermal power plant to meet rising electricity demand in the west of the fast-growing Central Asian country.

“Karakalpakstan and Khorezm regions are expecting electricity demand to grow at double the rate of the forecasted national average. Reliable power supply is essential to meet the residential demand and for future industrial development and growth,” said Rune Stroem, Director of the Energy Division of ADB’s Central and West Asia Department. “This loan will help finance modern generating units to increase the reliability of power supply, save energy, and cut greenhouse gas emissions.”

Uzbekistan is a fast growing economy, with more than 8% growth on average from 2007 to 2013. But aging power infrastructure, much of it dating back to the era of the Soviet Union, is undermining its ability to meet power demand and weighing on business and household activity.

The project will build two new energy-efficient combined-cycle gas turbines of up to 280 megawatts each, while decommissioning three existing steam turbine units, with two others to be kept as backup.

Another component will be staff training and other support for Uzbekenergo, the state-owned power utility, to improve tariff setting and to make the utility more commercially bankable. Uzbekenergo, with previous support from ADB, has made substantial improvements in financial transparency and introduced advanced electricity metering infrastructure, but it still needs to modernize its management and information and technology systems.

Along with ADB’s assistance, the Uzbekistan Fund for Reconstruction and Development will provide a $270 million loan, with Uzbekenergo and the Government of Uzbekistan extending a combined $130 million, for a total investment cost of $700 million. The project will run for 6 years with an estimated completion date of end October 2020.