Uzbekistan : Digitize to Decarbonize—Power Transmission Grid Enhancement

Sovereign Project | 52322-004

Digitize to Decarbonize - Power Transmission Grid Enhancement Project aims to support the low-carbon transition and green economy development agenda of the Government of Uzbekistan by (i) enhancing reliability and stability of the power transmission grid, (ii) increasing operational efficiency and improving monitoring and control of the power system by introducing modern digital and telecom technologies, (iii) reducing the number of system blackouts, (iv) reducing transmission losses, and (v) supporting the prioritized government reform of state-owned enterprises by enhancing the corporate governance of Joint Stock Company (JSC) National Electricity Grid of Uzbekistan (NEGU).

Project Details

Project Name
Digitize to Decarbonize—Power Transmission Grid Enhancement
Project Number
52322-004
Country / Economy
  • Uzbekistan
Project Status
Active
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 4326-UZB: Digitize to DecarbonizePower Transmission Grid Enhancement
Source Amount
Ordinary capital resources US$ 125.00 million
Operational Priorities
  • OP1: Addressing remaining poverty and reducing inequalities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Energy / Electricity transmission and distribution

Gender
Effective gender mainstreaming
Description
Digitize to Decarbonize - Power Transmission Grid Enhancement Project aims to support the low-carbon transition and green economy development agenda of the Government of Uzbekistan by (i) enhancing reliability and stability of the power transmission grid, (ii) increasing operational efficiency and improving monitoring and control of the power system by introducing modern digital and telecom technologies, (iii) reducing the number of system blackouts, (iv) reducing transmission losses, and (v) supporting the prioritized government reform of state-owned enterprises by enhancing the corporate governance of Joint Stock Company (JSC) National Electricity Grid of Uzbekistan (NEGU).
Project Rationale and Linkage to Country/Regional Strategy

Uzbekistan is an energy-rich country, with positive economic growth outlook and a considerably high-energy demand forecast for the main demand centers. Thus, the development of the power sector is a prerequisite for achieving economic development in the country's regions and for meeting the growing demand of reliable electricity supply by industrial, commercial, and residential consumers. Since the mid-half of 2010, electricity demand has grown by around 4%-5% per annum, with the government forecasting growth of around 6%-7% per annum in the period to 2030.

In response, the government set ambitious targets to increase power supply capacity to meet growing demand and to allow the phase out of old and inefficient thermal plants, with the new generation capacity to be developed by the private sector. The targets include the construction of a 7-gigawatt solar photovoltaic and 5 gigawatts of wind capacity over the course of the decade -- and the government is currently working on updating its long-term strategic document to reflect these new targets.

Uzbekistan's power transmission network was largely developed during the Soviet era, with most of the transmission lines and substations constructed 30-50 years ago. Presently, the substations are equipped with protection and monitoring equipment from the 1960s to 1970s, of which spare parts are no longer available. Failure to adequately replace and rehabilitate this infrastructure can lead to worsening supply reliability, increased incidence of system outages, higher losses, and inability to meet growing demand and evacuate power from newly constructed renewable power plants.

At present, analog instruments and manual hourly recording measure the loading of transformers, and incoming and outgoing transmission lines. Disturbance events are also recorded by hand. Communication with the control center is done by the power line carrier and the national telecommunication network. For example, the Uzbekistan grid system took a long time to detect faults and recover from the regional blackout in the early 2022, compared with its neighboring countries, because of the absence of modern digital system and the supervisory control and data acquisition (SCADA) system.

Uzbekistan's power transmission system is owned and maintained by JSC NEGU, which will serve as the project's executing agency. JSC NEGU also functions as the single buyer of electricity from all power generators and the reseller to the distribution companies. With increasing private sector participation in the power generation, particularly renewable energy, robust creditworthiness of JSC NEGU and a sustainable market structure are needed to guarantee the successful operation of private power projects. The government has been rigorously pursuing reform policies to address these, including (i) the creation of an autonomous tariff commission, (ii) the adoption of a new cost-reflective tariff methodology, (iii) increased revenue collections through a nationwide advance metering program, and (iv) a stronger financial management system for JSC NEGU. Among others, the project will support power grid modernization through the introduction of state-of-the-art infrastructure and monitoring equipment. In doing so, it will improve JSC NEGU's financial position through reduced losses of energy, reduction in outages, and enhanced ability to meet growing demands within various regions of Uzbekistan. In addition, the reform components of the project tailored for JSC NEGU will complement ongoing policy-level intervention and strengthen JSC NEGU's institutional capacity.

Impact

Comprehensive measures aimed at deepening structural transformation, modernization, and diversification of key sectors of the economy adopted; and

Access to modern, affordable, and reliable energy supply for 100% of the population and key sectors of the economy ensured.

Project Outcome

Description of Outcome

Power transmission system reliability improved.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Twelve transmission lines in seven regions (Bukhara, Fergana, Kaskadarya, Samarkhand, Surkhandarya, Navoi, and Tashkent) rehabilitated and equipped with climate-resilient technologies

Four 220 kV substations (Faisabad, Obi-Khaet, Zafar, and Zarafshan) reconstructed, equipped with climate-resilient technologies, and expanded by 420 MVA

NEGU's corporate governance enhanced

NEGU's project management capacity improved

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Nation-wide

Safeguard Categories

Environment
B
Involuntary Resettlement
B
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Contact

Responsible ADB Officer
Gurgenidze, Nana
Responsible ADB Department
Sectors Group
Responsible ADB Division
Energy Sector Office (SG-ENE)
Executing Agencies
Joint Stock Company National Electric Grid of Uzbekistan (formerly Joint Stock Company National Electric Networks of Uzbekistan)

Timetable

Concept Clearance
25 Oct 2022
Fact Finding
01 Oct 2022 to 15 Oct 2022
MRM
17 Nov 2021
Approval
07 Jul 2023
Last Review Mission
-
Last PDS Update
07 Jul 2023

Funding

Loan 4326-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Jul 2023 24 Nov 2023 15 Jan 2024 30 Jun 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 164.30
ADB 125.00
Counterpart 39.30
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 44.43 0.00 36%
Cumulative Disbursements 06 Jun 2024 7.52 0.00 6%

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.


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.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


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Requests for information may also be directed to the InfoUnit.

Tenders


Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Consulting Services for Project Implementation Consultant (PIC) Loan 4326 07 May 2024 JV of SMEC International Pty. Ltd. and Tractebel Engineering GmbH | Australia: Level 7, 40 Mount Street, North Sydney, New South Wales, 2060Uzbekistan: Afrosiyob Street, 8A, DMAAR Business Centre, office 711, 100015 Joint Stock Company National Electric Grid of Uzbekistan 3,977,858.00 3,977,858.00
OCB/EPC/HVTL-01/1: Design, Supply, and Installation of the High-voltage Transmission Lines in Uzbekistan Regions (Lot 1) Loan 4326 12 Feb 2024 Tojikgidroelectromontaj JSC (Tajikistan) - Uzkishlokelektrkurilish JSC (Uzbekistan) JV | N. Huvaydullaev Street 377/1, Dushanbe City, Republic of Tajikistan 734060 Joint Stock Company National Electric Grid of Uzbekistan 10,036,919.73 10,036,919.73
OCB/EPC/HVTL-01/3: Design, Supply, and Installation of the High-voltage Transmission Lines in Uzbekistan Regions (Lot 3) Loan 4326 29 Jan 2024 LLP ASPMK-519 | 15/88, Isaev St., Almaty 050026, Republic of Kazakhstan Joint Stock Company National Electric Grid of Uzbekistan 13,148,433.70 13,148,433.70
OCB/EPC/HVTL-01/2: Design, Supply, and Installation of the High-voltage Transmission Lines in Uzbekistan Regions (Lot 2) Loan 4326 29 Jan 2024 LLP ASPMK-519 | 15/88, Isaev St., Almaty 050026, Republic of Kazakhstan Joint Stock Company National Electric Grid of Uzbekistan 17,268,472.31 17,268,472.31

Procurement Plan

Title Document Type Document Date
Digitize to Decarbonize—Power Transmission Grid Enhancement: Procurement Plan Procurement Plans Apr 2024