52322-002: Preparing Sustainable Energy Investment Projects | Asian Development Bank

Uzbekistan: Preparing Sustainable Energy Investment Projects

Sovereign (Public) Project | 52322-002 Status: Approved

The transaction TA facility will provide project preparation support to a series of ensuing projects, comprising: (i) Uzbekistan Regional Gas Modernization Project ($300 million), (ii) Power Distribution Improvement Program ($300 million), and (iii) Regional Energy Transmission and Dispatch Enhancement Project ($400 million). All ensuing projects are among the Government's priorities for energy sector development under Uzbekistan 2030, and will require similar scope of safeguard, financial management and economic assessments.

Natural gas is the most important indigenous source of energy in Uzbekistan and is regarded as one of the driving forces of the country's economy. At present, the energy sector contributes to over 20% of national tax revenues and 18% of the country's gross domestic product (GDP). Natural gas is over 80% of the country's energy mix and 85% of electricity generated.

Project Details

Project Officer
Abbasov, Rafayil Central and West Asia Department Request for information
Country
  • Uzbekistan
Sector
  • Energy
 
Project Name Preparing Sustainable Energy Investment Projects
Project Number 52322-002
Country Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9708-UZB: Preparing Sustainable Energy Investment Projects
Technical Assistance Special Fund US$ 1.50 million
TA: Preparing Sustainable Energy Investment Projects
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution - Energy utility services - Oil and gas transmission and distribution

Gender Equity and Mainstreaming No gender elements
Description

The transaction TA facility will provide project preparation support to a series of ensuing projects, comprising: (i) Uzbekistan Regional Gas Modernization Project ($300 million), (ii) Power Distribution Improvement Program ($300 million), and (iii) Regional Energy Transmission and Dispatch Enhancement Project ($400 million). All ensuing projects are among the Government's priorities for energy sector development under Uzbekistan 2030, and will require similar scope of safeguard, financial management and economic assessments.

Natural gas is the most important indigenous source of energy in Uzbekistan and is regarded as one of the driving forces of the country's economy. At present, the energy sector contributes to over 20% of national tax revenues and 18% of the country's gross domestic product (GDP). Natural gas is over 80% of the country's energy mix and 85% of electricity generated.

Uzbekistan's aging and dilapidated infrastructure in the whole energy chain increasingly results in system inefficiencies, unreliable gas and electricity supply that dampens the economic development and business confidence, and uneven access to electricity across provinces contributing towards widening regional income disparities. The obsolete energy transmission and distribution systems have developed serious problems overtime, such as increasingly frequent electricity blackouts and insufficient gas available especially during peak demand times in the winter, putting social service systems such as education and health care at risk.

In 2017, Uzbekistan initiated comprehensive economic reforms liberalizing its exchange rate to solve long-standing difficulties associated with limited access to foreign exchange and requirements to surrender foreign exchange resulted in structural and economic distortions. The liberalization of the foreign exchange regime and local currency devaluation created additional challenges to energy utilities massively distorting their value of assets, capital structures and revenue generation under existing governance and financial management frameworks. To recover the sustainability of energy utilities, the government launched several initiatives and legislative acts for sector reforms that includes: (i) development of cost reflective energy tariffs (ii) adoption of international financial reporting standards (IFRS) and disclosures and (iii) strengthening financial management and corporate governance frameworks

Project Rationale and Linkage to Country/Regional Strategy

Government development plan. Uzbekistan government formulated its vision for the country, _Uzbekistan 2030_ with the aim of overcoming social and economic challenges. The government recognizes the strong link between energy and economic growth, and the urgency to sustain gas supply modernizing transmission infrastructure. The key priority of the government is to maintain momentum on structural reforms and liberalization of economic activities that would lead to more financial resources for achieving long term economic growth. Development and implementation of cost reflecting pricing for natural gas is essential to successful energy reforms. In its vision of _Uzbekistan 2030_, the government is committed to promote resource-efficient growth model through: (i) institutional and governance reforms in the energy sector with potential unbundling of upstream, mid-stream and downstream functions; and (ii) rationalized and cost reflective pricing for gas and electricity.

Energy is one of ADB's priority sectors of engagement in Uzbekistan. The country partnership strategy for Uzbekistan indicates that energy sector operations will focus on reform and market development to meet energy demand with reliable, environmentally sustainable supply. The government's request is also consistent with ADB's priorities under Strategy 2030 and, based on the government's demonstrated commitment to reform.

The three ensuing projects to be prepared under the TRTA facility are of similar nature. These projects are aligned with the objectives of the government to strengthen reliability of energy sector to increase its sustainability, efficiency, and mobilizing private sector investments. The projects aim to improve the quality of energy supply, reduce aggregate technical and commercial losses, and improve the financial performance of energy utilities.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services ADB will engage the consultants following the ADB Procurement Policy (2017, as amended from time to time) and the Staff Instructions on ADB Administered Consulting Services. The F-TRTA will require consultancy services from international consulting firms (at least 67 person-months, comprising of 27 person-months of international experts, and 40 person-months of national experts) for conducting due diligence on the (i) Regional Gas Transmission Efficiency Enhancement Project, and (ii) Regional Energy Transmission and Dispatch Enhancement Project. The consulting firms with experience in energy (gas and electricity) will be recruited using quality- and cost-based selection method with a quality to cost ratio of 90:10. In addition, individual consultants (at least 21.5 person-months of international experts, and 69 person-months of national experts) will be recruited. Any consultant position not envisaged at this time but needed during implementation will be recruited as individual consultants. The recruitment of these consultants as individuals is justified to retain the flexibility of engaging these consultants, as required.
Procurement Not applicable
Responsible ADB Officer Abbasov, Rafayil
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
UzbekEnergo
6 Istiklol Street
Tashkent, 100000, Uzbekistan
Uzbekneftegaz
Uzbekistan, 100047, Tashkent
Yashnabandski rayon, Str.
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 28 Jan 2019
Last Review Mission -
Last PDS Update 29 Jan 2019

TA 9708-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Jan 2019 - - 30 Jun 2020 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,500,000.00 0.00 0.00 0.00 0.00 0.00 1,500,000.00 28 Jan 2019 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Project Coordinator Individual - Consulting Closed 10 Jan 2019 16 Jan 2019
Procurement Specialist Individual - Consulting Closed 09 Jan 2019 11 Jan 2019
Gas Consulting Firm Firm - Consulting Closed 04 Jan 2019 02 Feb 2019
Procurement Specialist Individual - Consulting Closed 22 Dec 2018 06 Jan 2019
Gender Specialist Individual - Consulting Closed 22 Dec 2018 06 Jan 2019
Preparing Regional Gas Modernization Project Firm - Consulting Closed 20 Oct 2018 10 Dec 2018

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.