Uzbekistan : Preparing Sustainable Energy Investment Projects

Sovereign Project | 52322-002

The transaction TA facility will provide project preparation support to a series of ensuing projects, comprising: (i) Gas Sector Development Program ($750 million), (ii) Distribution Network Modernization Program ($300 million), and (iii) Regional Energy Transmission and Dispatch Enhancement Project ($200 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. Social (labor), human resources, and training needs assessments will also be undertaken for the policy component of the proposed Gas Sector Development Program.

Project Details

Project Name
Preparing Sustainable Energy Investment Projects
Project Number
52322-002
Country / Economy
  • Uzbekistan
Project Status
Closed
Project Type / Modality of Assistance
  • Technical Assistance
Source of Funding / Amount
TA 9708-UZB: Preparing Sustainable Energy Investment Projects
Source Amount
Technical Assistance Special Fund US$ 1.50 million
TA 9708-UZB: Preparing Sustainable Energy Investment Projects (Supplementary)
Source Amount
Technical Assistance Special Fund US$ 500,000.00
TA 9708-UZB: Preparing Sustainable Energy Investment Projects (2nd Supplementary)
Source Amount
Technical Assistance Special Fund US$ 150,000.00
TA 9708-UZB: Preparing Sustainable Energy Investment Projects (3rd Supplementary)
Source Amount
Technical Assistance Special Fund US$ 725,000.00
TA 9708-UZB: Preparing Sustainable Energy Investment Projects
Source Amount
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
No gender elements
Description

The transaction TA facility will provide project preparation support to a series of ensuing projects, comprising: (i) Gas Sector Development Program ($750 million), (ii) Distribution Network Modernization Program ($300 million), and (iii) Regional Energy Transmission and Dispatch Enhancement Project ($200 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. Social (labor), human resources, and training needs assessments will also be undertaken for the policy component of the proposed Gas Sector Development Program.

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

Contact

Responsible ADB Officer
Kim, Seung Duck
Responsible ADB Department
Sectors Group
Responsible ADB Division
Energy Sector Office (SG-ENE)
Executing Agencies
Joint Stock Company National Electric Networks of Uzbekistan
Joint-Stock Company Regional Electrical Power Networks
Joint-Stock Company Uzbekenergo
Uzbekneftegaz

Timetable

Concept Clearance
-
Fact Finding
-
MRM
-
Approval
28 Jan 2019
Last Review Mission
-
Last PDS Update
31 Mar 2020

Funding

TA 9708-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Jan 2019 22 Feb 2019 22 Feb 2019 30 Jun 2020 31 Dec 2023 21 Mar 2024
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
3,375,000.00 0.00 0.00 0.00 0.00 0.00 3,375,000.00
Cumulative Disbursements
Date Amount
05 Apr 2024 3,323,885.34

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 Access to Information Policy (AIP) 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.

Title Document Type Document Date
Preparing Sustainable Energy Investment Projects: Technical Assistance Report Technical Assistance Reports Jan 2019

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 Access to Information Policy (AIP) 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
Procurement Expert Individual - Consulting Closed
National Environmental Specialist (PMU) Individual - Consulting Closed
National Social Safeguards Specialist (PMU) Individual - Consulting Closed
National Financial Management Specialist Individual - Consulting Closed
National Project Management Specialist Individual - Consulting Closed
National Procurement Specialist Individual - Consulting Closed
Distribution Network Modernization Program - Engineering Firm Firm - Consulting Closed
National Financial Management Assessment Expert Individual - Consulting Closed
National Organizational Development Specialist Individual - Consulting Closed
International Organizational Development Specialist Individual - Consulting Closed
National Gender Specialist Individual - Consulting Closed
National Senior Transmission Engineer Individual - Consulting Closed
National Transmission Engineer Individual - Consulting Closed
National Social Safeguards Specialist Individual - Consulting Closed
International Environmental Specialist Individual - Consulting Closed
National Environmental Specialist Individual - Consulting Closed
International Transmission Line Engineer Individual - Consulting Closed
Reform Advisor Individual - Consulting Closed
Procument Expert (International) - Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
(Social Safeguard Expert - National) Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
Electrical Engineer/ Power Distribution and Transmission/ System Planning Engineer Individual - Consulting Closed
Social Development/Safeguards/Land Acquisition/Resettlement Individual - Consulting Closed
Social Development/Safeguards/Gender Specialist Individual - Consulting Closed
Economic/Finance Analysis Expert Individual - Consulting Closed
(Social Safeguard Expert - International) Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
(Environment Safeguard Expert - National) - Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
(Transmission Expert - International) - Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
(Environment Safeguard Expert - International) - Preparing Sustainable Energy Investment Projects Individual - Consulting Closed
International Financing Reporting Standards (IFRS) Expert Individual - Consulting Closed
International Financing Reporting Standards (IFRS) Expert Individual - Consulting Closed
International Financing Reporting Standards (IFRS) Expert/Team Leader Individual - Consulting Closed
Advisor on Energy Tariffs Individual - Consulting Closed
Advisor on Electricity Market Design Individual - Consulting Closed
Advisor on Energy Reforms Individual - Consulting Closed
Corporate Governance Advisor on Energy Market Reforms. Individual - Consulting Closed
Valuation and IFRS Firm Firm - Consulting Closed
Financial Management Assessment Expert Individual - Consulting Closed
Gender Expert Individual - Consulting Closed
Gender Expert Individual - Consulting Closed
Financial Management Expert Individual - Consulting Closed
Project Coordinator/Analyst Individual - Consulting Closed
International Consultation and Development Communications Specialist Individual - Consulting Closed
National Social Development Specialist Individual - Consulting Closed
National Communications Specialist Individual - Consulting Closed
National Human Resource Specialist Individual - Consulting Closed
Legal Specialist Individual - Consulting Closed
International Labor Market Specialist Individual - Consulting Closed
National Labor Market Specialist Individual - Consulting Closed
International Human Resource Specialist Individual - Consulting Closed
Project Coordinator Individual - Consulting Closed
Procurement Specialist Individual - Consulting Closed
Gas Consulting Firm Firm - Consulting Closed
Procurement Specialist Individual - Consulting Closed
Gender Specialist Individual - Consulting Closed
Preparing Regional Gas Modernization Project Firm - Consulting Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Project Preparatory Technical Assistance Technical Assistance 9708 04 Aug 2022 JV "UzAssystem" LLC (UZBEKISTAN) | M.Ashrafiy str. No:9, 1st Drive, Yashnabad District Tashkent 100074 Uzbekistan Joint-Stock Company Uzbekenergo 298,900.00
Project Preparatory Technical Assistance 9708 15 Oct 2020 KPMG Tax and Advisory(KAZAKHSTAN) in association with KPMG Valuation and Consulting(UZBEKISTAN) | 180 Dostyk Avenue Almaty, Kazakhstan 050 Joint-Stock Company Uzbekenergo 339,393.00
Project Preparatory Technical Assistance 9708 12 Apr 2019 MOTT MACDONALD LIMITED (UNITED KINGDOM) in association with CORPORATE SOLUTIONS CONSULTING LTD. (UNITED KINGDOM) | MOTT MACDONALD HOUSE, 8-10 SYDENHAM ROAD CROYDON CR0 2EE, UNITED KINGDOM Joint Stock Company Uzbekenergo 581,640.00
Project Preparatory Technical Assistance 9708 18 Sep 2019 KPMG Tax and Advisory (KAZAKHSTAN) in association with AO KPMG-Audit LLC (UZBEKISTAN) | 180 Dostyk Avenue Almaty, Kazakhstan 050 Joint-Stock Company Uzbekenergo 146,900.00

Procurement Plan

None currently available.