The World Bank’s board of executive directors has approved the Electricity Sector Transformation And Resilient Transmission Project aimed at improving the performance of the National Electric Grid of Uzbekistan (NEGU). The project aims to ensure reliable energy supplies for millions of households and businesses across the Central Asian country.

The initiative will be supported by $380mn in credit from the International Development Association (IDA) and a $43mn loan from the Green Climate Fund (GCF). The Uzbek government is to receive the financing at “very low-interest rates” and “with the longest repayment period”, at up to 40 years. The GCF is also to provide a $4mn grant to cover selected project activities.

In Uzbekistan, electricity demand is expected to grow to over 100 TWh by 2030, a significant increase from 61 TWh in 2018. The country has more than 250,000 kilometres of electricity transmission and distribution lines, most of which were built during the Soviet age and are now past their useful economic life.

The obsolete infrastructure results in high electricity losses, estimated at 20% of net generation, and frequent power outages undermining economic activities and the well-being of citizens across the country.

“This new transformational project supports the government’s goal of removing barriers to the effective operation and growth of the electricity sector. It will create the conditions for turning the NEGU into a modern and commercially run company and modernizing the national power transmission system. These measures will ensure reliable electricity supply for approximately 32mn consumers and, importantly, enable the grid integration of new large-scale renewable energy generation projects,” said Marco Mantovanelli, World Bank  country manager for Uzbekistan.

The project aims to help in the modernisation of outdated energy infrastructure by financing a part of NEGU’s priority investment programme. Among other activities, it will include the rehabilitation, upgrading and expansion of 22 existing obsolete high-voltage substations and the construction of a new 500 kV transmission substation and associated transmission lines in 11 regions of Uzbekistan.