The World Bank will provide Uzbekistan with a $10.6 million grant to establish a mechanism for eliminating gas leaks, under the Cabinet of Ministers’ August 18 Resolution.
Gas-leak detection efforts carried out with World Bank support have already identified more than 1,000 defective points across Uztransgaz facilities nationwide, with leak volumes estimated at up to 35 million cubic meters of gas.
The World Bank has noted that Uzbekistan's gas transport infrastructure has deteriorated over time due to insufficient investment in maintenance and repair, leading to gas leaks and financial losses. Without the necessary repair work, cumulative losses could reach 1.75 billion cubic meters of gas by 2030 — equivalent to $228 million in lost revenue.
The project will run from 2026 to 2028. The bulk of the grant — roughly $9.6 million — will go directly toward repairing gas infrastructure and reducing existing losses.
An additional $500,000 each has been earmarked for two other areas: developing a monitoring and reporting system for leaks and emissions, and establishing a project implementation team, including the hiring of foreign experts and organizational support for the project.
Work will proceed in phases. To access the grant funds, Uztransgaz must open special accounts at commercial banks, with World Bank funds flowing exclusively into a dedicated foreign-currency account.
The Resolution establishes a separate financial mechanism under which the economic benefit from eliminating leaks will be channeled back into further reducing gas losses.
Under the project, repair work is expected to prevent the annual leakage of roughly 47,500 metric tons of gas by 2029 — gas that will instead reach consumers and businesses. The reduction in losses is also expected to generate roughly $18 million in financial savings.
After repair work is completed, the volumes of natural gas saved must undergo independent verification. The financial value of that saved gas will be calculated based on this data.
Funds calculated from the volume of gas that was previously lost but preserved after repairs will accumulate in a special escrow account held by Uztransgaz. Those funds can then be redirected toward identifying and fixing new leaks.
In the initial phase, this money will supplement the World Bank grant. Once the grant is fully disbursed, the funds accumulated in the escrow account are meant to become the primary source of financing for ongoing leak-detection and repair work.
Once work at Uztransgaz's own facilities is complete, the savings will also be directed toward addressing losses and leaks at other gas infrastructure facilities across the country.
Gas transport tariffs won't fall for at least two years
The Resolution also includes a distinct tariff mechanism.
The interdepartmental tariff commission under the Cabinet of Ministers must ensure that, once previously existing losses are eliminated and independently confirmed, the corresponding gas volumes continue to be factored into Uztransgaz's tariffs covering its own operational needs and losses during transport through the main pipeline system.
This arrangement is to remain in place for at least two years after the saved gas volumes are confirmed.
In effect, this allows the financial benefit of reduced losses to stay within the mechanism itself, funding further investment in gas infrastructure rather than being passed on immediately through lower consumer tariffs.
The project also aims to cut methane emissions. Any greenhouse gas reductions achieved through the project will remain under state control.
The financial mechanism is meant to be used not only for infrastructure repairs, but also for developing measurement, monitoring, reporting and verification systems, upgrading worker skills, modernizing facilities, and ensuring compliance with environmental standards.
Uztransgaz must draw up a quarterly list of priority leak-detection and repair work, along with investment plans for the following year, which will require approval from the Ministry of Economy and Finance and the Ministry of Energy.
Once work is completed, the company must submit independently verified reports detailing the volume of gas saved, methane emissions reduced, work performed, and financial results.
A dedicated five-person team will be established within Uztransgaz to manage the project. The company will also be able to bring in local and foreign specialists, consultants and experts, with those costs covered by grant funds.
The president said earlier that electricity losses reached 17.2 percent and natural gas losses 7.6 percent in the first half of the year. Modernizing the country's energy infrastructure is expected to require $8 billion over the next decade.
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