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AIIB approves US$100 million loan for Uzbekistan gas-fired power project
New, high-efficiency gas power stations to complement early growth of renewable energy
Michael Marray 10 Nov 2021

The Asian Infrastructure Investment Bank (AIIB) has approved a US$100 million loan to ACWA Power Sirdarya LLC to support the construction of the 1,500MW Sirdarya Combined Cycle Gas Turbine (CCGT) power project in Uzbekistan. This is AIIB’s first non-sovereign-backed financing (NSBF) in Uzbekistan, and aims to increase the availability of high-efficiency gas power generation capacity in the country.

Along with AIIB, the other participating lenders are the European Bank for Reconstruction and Development, OPEC Fund for International Development, and KfW affiliate DEG (Deutsche Investitions-und Entwicklungsgesellschaft), with some commercial lenders backed by guarantees from the Multilateral Investment Guarantee Agency.

The AIIB says Uzbekistan’s electricity system faces major supply gaps (estimated at 9.4% of total electricity demand in 2019), and lacks the necessary reserve capacity to balance the upcoming large share of intermittent renewable energy such as solar and wind.

The construction of new, high-efficiency gas power stations, which will replace older and less efficient assets, is an important modernization step that complements the early growth of renewable energy.

The government of Uzbekistan is implementing plans to meet the projected electricity demand, and the long-term objective of ensuring reliable and efficient electricity supply while facilitating low-carbon transition towards carbon neutrality by 2050.

The project is also in line with Uzbekistan’s Nationally Determined Contribution, which aims to decrease specific greenhouse gas emissions per unit of GDP by 10% by 2030 from 2010 levels.

“This project sets an outstanding example of a private sector investment in our lower-middle-income member, which will support its transition to a competitive energy sector,” says Konstantin Limitovskiy, AIIB vice president, investment operations (Region 2). “It is fully aligned with the bank's Energy Sector Strategy, and will help Uzbekistan to reduce the carbon intensity of its energy supply.”

The project is AIIB’s largest NSBF project in Central Asia and is the first large-scale independent power producer project in Uzbekistan to date, a product of the long reform and liberalization process of Uzbekistan’s energy sector.

The project is being developed by Riyadh-headquartered ACWA Power, a developer, investor and operator of power, desalinated water, and green hydrogen plants in the Middle East, Africa, Central Asia and Southeast Asia.

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