The Asian Development Bank (ADB) and Uzbekistan have signed a loan agreement worth 200 million US dollars to upgrade the country's electricity distribution systems. These funds will be used to improve infrastructure, reduce power losses, and increase the reliability of energy supply amid growing demand.
The agreement was signed in Bangkok on October 15 between ADB President Masato Kanda and Deputy Prime Minister and Minister of Economy and Finance of Uzbekistan, Jamshid Kuchkarov.
Modernization Program Details
The program includes the modernization of 60 key distribution substations across the country, as well as the implementation of digital management systems. These infrastructure improvements are expected to help reduce power losses, decrease transformer overload, and enhance the stability of energy supply to households, businesses, and state institutions.
According to ADB data, this program will also create conditions for connecting at least 3.3 GW of new renewable energy capacity. It is projected that greenhouse gas emissions will decrease by nearly 23,000 tons of carbon dioxide equivalent annually.
The need for modernization is driven by economic growth, urbanization, and increased electricity consumption. Outdated equipment and overloaded networks hinder reliable energy supply and the connection of new RES facilities.
Strengthening Operational Capabilities
In addition to equipment replacement, the program will strengthen the operational capabilities of the National Electric Grid of Uzbekistan JSC, improve financial control and management, and enhance personnel qualifications. Special attention will be paid to staff training and increasing the participation of women in the energy sector.
This project marks the first ADB initiative in Uzbekistan's energy sector implemented under the ADB-World Bank Framework of Mutual Trust (FMRF). It will also be the first results-based financing program in the country's energy sector.
ADB is the lead lender for the project. Later in October, the World Bank plans to present a proposal for additional financing of 100 million US dollars to the Executive Directors Board.
The new program continues ADB's long-standing support for Uzbekistan's energy sector. Since 2010, the bank has provided the country with over $3.4 billion in financing and guarantees for this sector.
The project aligns with Uzbekistan's strategy until 2030 for developing renewable energy and improving energy efficiency, as well as ADB's partnership strategy with Uzbekistan for the period 2024–2028.
