The Asian Development Bank (ADB) and “Nur Navoi Solar” Foreign Enterprise Limited Liability Company (NNS) signed loans of up to $17.5 million for a 100-megawatt (MW) solar power plant that will be the first public–private partnership renewable energy project in Uzbekistan. The project will play a catalytic role in improving access to affordable and reliable renewable energy in rural parts of the country.
The financing package for the plant, to be built near Navoi City in central Uzbekistan, includes a loan from ADB and a loan from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II), which will be administered by ADB.
The 100 MW project will generate around 258.2 gigawatt-hours of clean energy annually, avoiding 157,502 tons of carbon dioxide emissions a year. NNS will provide its energy output to the National Electric Grid of Uzbekistan under a 25-year power purchase agreement.
“As the first major private sector renewables investment in Uzbekistan, Navoi solar is a landmark transaction in many ways,” said ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa. “The project will significantly help the government in meeting its target of at least 25% renewable energy capacity by 2030.”
Uzbekistan is reliant on fossil fuels with most of its electricity supplied by natural gas. Its aging power grid results in high transmission and distribution losses. Power deficits are especially acute in southern and western regions, where some schools and hospitals are unable to operate at full capacity due to unreliable electricity supply.
ADB is also financing the construction of a high-voltage transmission line to strengthen the country’s electricity grid and the installation of advanced metering systems. The project is in line with ADB’s country partnership strategy (2019–2023) for Uzbekistan, which stresses ADB’s private sector financing support for renewable energy.
NNS is a special purpose vehicle owned by United Arab Emirates-based Abu Dhabi Future Energy Company Private - Masdar, a global leader in renewable energy. Masdar has developed utility-scale, grid-tied projects, small-scale applications providing energy access to communities away from the electricity grid, and carbon abatement projects.
The ADB loan package includes a concessional finance tranche, funded by CFPS II, to support a lower-than-expected power tariff for the project and will help in demonstrating the commercial feasibility of solar projects as the country shifts to clean energy. CFPS II is managed and administered by ADB and was established in 2017 by the Government of Canada to encourage private investment in climate change mitigation and adaptation projects in Asia and the Pacific.