The government of Uzbekistan last week signed loan and guarantee agreements with the World Bank Group, UAE-based developer Masdar, and the Asian Development Bank (ADB) to finance the first 100-megawatt solar photovoltaic power plant in the country.
The International Finance Corporation (IFC) and ADB are providing up to $60 million in the financing of the project which will be the first large-scale, privately developed and operated renewable energy facility in Uzbekistan.
The European Bank for Reconstruction and Development (EBRD) is providing an equity bridge loan to Masdar to fund the equity needs of the project.
Meanwhile, the World Bank is providing a $5.1 million payment guarantee for the Government of Uzbekistan to backstop the payment obligations under the project along with its upstream support to create an enabling environment for renewable energy deployment in Uzbekistan.
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.
“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 have an enormous effect, serving as a best practice example in Uzbekistan, opening new markets for private investment and helping accomplish the country's goal of increasing the use of renewable energy," said Wiebke Schloemer, IFC Director for Europe and Central Asia.
The plant's 300,000 photovoltaic panels occupying a 268-hectare plot of land 35 kilometers east of the city of Navoi are expected to start feeding power directly to the national electric network in 2021. It will produce 270 gigawatt hours per year of electricity from solar energy resources, enough to power more than 31,000 households, and prevent the release of 156,000 metric tons of greenhouse gases annually.
The plant will be constructed and operated by the "Nur Navoi Solar" Foreign Enterprise, a limited liability company owned by Masdar, a unit of Mubadala Investment Company, an investment holding fully owned by the government of Abu Dhabi.
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.
In October 2019, Masdar won Uzbekistan's first competitively-tendered solar power public-private partnership, which was structured with IFC's advisory support under the WBG Scaling Solar Program, a one-stop shop that helps governments rapidly bring online privately funded solar projects at competitive tariffs. Uzbekistan was the first state outside of Africa to join the Program.