MANILA, PHILIPPINES - The Asian Development Bank's (ADB) Board of Directors on Tuesday approved financing totaling $350 million to improve energy security and energy efficiency in Uzbekistan.

The financing by ADB will build Central Asia's first 800 MW combined cycle gas turbine (CCGT) power plant. CCGT is the most efficient and cleanest option for Uzbekistan. It will improve power generation efficiency from 30% to over 50%, saving fuel and cutting carbon emissions by over 1 million tons of carbon dioxide equivalent per year.

Uzbekistan has the most industrialized and energy intensive economy in Central Asia. It uses four times more energy than the world average to produce one dollar of gross domestic product. This is due to aging and dilapidated energy infrastructure, low technological base, lack of investment and inefficiency.

"The project is the least-cost and low-carbon solution to ensure energy security. Advanced power generation technology will cut the high energy intensity levels and increase energy productivity," said Bayanjargal Byambasaikhan, an energy specialist at ADB's Central and West Asia Department.

The project will cost $1.28 billion. The first ADB loan of $340 million will be sourced from ADB's ordinary capital resources. It has a repayment period of 25 years, including a grace period of 5 years. The interest rate will be based on ADB's LIBOR-based lending facility. The second loan is a $10 million concessional facility from ADB's Asian Development Fund.

The Uzbekistan government has requested Japan International Cooperation Agency (JICA) to cofinance the project with a loan of up to $300 million. The remaining $630 million will be financed by the government, the Fund for Reconstruction and Development of the Republic of Uzbekistan, and the power utility company.

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