“To attract large-scale industrial investment and meet the rapidly growing demand for electricity, northwestern Uzbekistan needs a reliable power supply,” said Tianhua Luo, Senior Energy Specialist in ADB’s Central and West Asia Regional Department. “The loan will help improve power transmission network capacity and reliability, reduce transmission losses, and boost energy efficiency in the region.”

Uzbekistan has substantial primary energy resources, with total installed capacity for power generation reaching 13,500 megawatts, of which thermal accounts for 86% and hydro the remaining 14%. The government has adopted plans to increase energy efficiency, but aging infrastructure results in higher risk of outages, poor service quality, high maintenance costs, and increased transmission losses, all of which constrain economic activity in Karakalpakstan and Khorezm.

To address these problems, the funding will strengthen the regional power transmission network by constructing 364 kilometers of single-circuit 220 kilovolt (kV) overhead transmission lines connecting Takhiatash thermal power plant, Khorezm substation, and Ellikala substation. It will also expand and rehabilitate the existing Khorezm substation, open switchyards in the Takhiatash thermal power plant, and build a new 500/220 kV substation in Ellikala.

In addition, the project will help state-owned power utility Uzbekenergo boost its own management capacity through much-needed activities such as upgrading system planning and dispatch automation, strengthening assets management, and staff training.

Along with ADB’s loan from ordinary capital resources, the Government of Uzbekistan and Uzbekenergo will provide counterpart support of US$105 million. The project will run for nearly 4 years with an expected completion date of end December 2019.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2014, ADB assistance totaled US$22.9 billion, including cofinancing of US$9.2 billion.