The Asian Infrastructure Investment Bank (AIIB) has approved a US$ 100 million loan to ACWA Power Sirdarya for the construction of a 1,500 MW thermal power plant with combined cycle gas turbines in the Syrdarya province of Uzbekistan, the bank's said.

Note: ACWA Power started construction of the thermal power plant in the Syrdarya province in 2020. The US$ 1 billion project cost is scheduled to be comleted in 2022. The new facility will produce 10 billion kWh of electricity per year.

This is the first for the AIIB financing project without sovereign security in Uzbekistan, aimed at developing the industry of high-performance gas power plants in the country, the report says.

“Uzbekistan's electricity supply system faces significant energy supply challenges (estimated at 9.4% of total electricity demand in 2019) and does not have the necessary reserve capacity for the upcoming increase in the share of energy from renewable sources with variable generation, such as like solar panels and wind power. The construction of new, highly efficient gas-fired power plants is an important stage in the modernization of the system, complementing the growth in the use of renewable energy sources, ”the AIIB said.

Along with the AIIB, the lenders of the project are the European Bank for Reconstruction and Development, the OPEC Fund for International Development and DEG (Deutsche Investitions-Und Entwicklungsgesellschaft Mbh); however, some commercial lenders received guarantees from the Multilateral Investment Guarantee Agency (MIGA).

"This project is fully consistent with the bank's strategy in the energy sector and will help Uzbekistan to reduce the intensity of carbon dioxide emissions in the energy supply system," said AIIB Vice President for Investment Konstantin Limitovsky.

Uzbekistan's plan to achieve carbon neutrality by 2050 includes the modernization of gas-fired power plants. This will allow modernizing the energy infrastructure in the Syrdarya province through a public-private partnership.

The use of technology will also affect the efficiency of water use and remedy the situation with its shortage in the province, aggravated by climate change, the statement says.

It is expected that the technologies introduced under the project will significantly reduce greenhouse gas emissions per unit of electricity generation compared to the emission factors of the current energy system of Uzbekistan.