EBRD and Green Climate Fund launch green financing program in Uzbekistan

The Green Climate Fund Council approved the regional program CLiCA, aimed at increasing the resilience of Central Asian landscapes to the effects of climate change. Under this program, Uzbekistan will receive 103.7 million euros, which is the largest share among all participating countries.

These funds are intended to support farmers and restore ecosystems. The total budget for the entire program is 264.4 million euros. The project was developed by the German Agency for International Cooperation (GIZ) in collaboration with Uzbekistan, Kyrgyzstan, and Tajikistan. Coordination of the work on the Uzbek side was carried out by the National Center for Climate Change under the Committee on Ecology.

In Uzbekistan, this initiative plans work across an area of 164 thousand hectares, including forests, pastures, and agricultural lands. Methods that promote the conservation of natural resources and increase the sustainability of agriculture against climate shifts will be applied there.

A significant portion of the allocated money will go towards supporting farmers, providing them with additional opportunities to attract financing needed to implement new technologies and adapt their farms to the changing climate. The project is expected to protect 342 thousand residents of Uzbekistan from climate threats, with about half of them being women.

Furthermore, the program provides for reducing greenhouse gas emissions and increasing their absorption by 1.07 million tons of CO₂ equivalent. The CLiCA program unites the efforts of Uzbekistan, Kyrgyzstan, and Tajikistan in nature conservation and land restoration tasks, paying special attention to territories and residents most vulnerable to the consequences of climate change. Previously, Uzbekistan had proposed using artificial intelligence to combat poaching and create a network of reserves in Central Asia.

The World Bank has approved a loan of $100 million to carry out the modernization of Uzbekistan's power grids. These funds will be used to update and digitize 60 substations across the country.

This project aims to reduce energy losses, increase the stability of electricity supply, and enable the connection of new renewable energy facilities, such as solar and wind farms. Furthermore, the implementation of the project is expected to create approximately 11,700 new jobs.

By 2031, the modernized substations are expected to allow for an annual reduction in electricity losses by 20,000 megawatt-hours. Moreover, the power grid will gain the capacity to accept at least 3.3 gigawatts of power from renewable sources. It is projected that this project will lead to an annual reduction in greenhouse gas emissions of nearly 23,000 tons.

The total cost of the entire program is $371 million. In addition to the World Bank's contribution, the Asian Development Bank will provide another $200 million, having approved the project financing in September. An additional $71 million will be allocated by the Government of Uzbekistan from the state budget.

The need to update the infrastructure is driven by increasing electricity consumption. A significant portion of the distribution networks was built many decades ago, and many substations operate under overload. This causes energy losses and outages that affect not only residential and commercial buildings but also social institutions, including hospitals and schools.

Infrastructure modernization is critically important for Uzbekistan to achieve its goal of increasing renewable energy capacity to 25 gigawatts by 2030. To do this, the country requires a power grid capable of efficiently receiving energy from wind and solar installations and reliably delivering it to end consumers.

AO 'National Electric Networks of Uzbekistan' is responsible for implementing the program. In addition to updating the infrastructure itself, the project includes digitizing processes at substations, strengthening cybersecurity measures, and improving the financial management system. An increase in the proportion of female employment in the energy sector and improved compliance with environmental and social standards are also planned.

The World Bank emphasizes that stable power supply is a fundamental condition for the life of the population, the functioning of businesses, and ensuring sustainable economic growth of the state. Specifically, ten substations in Tashkent are planned for modernization to increase their throughput capacity and stabilize electricity supply. After replacing power transformers, the total additional capacity will amount to 333.2 megavolt-amperes.