OR 12 GW OF RENEWABLE POWER CAPACITY IN LESS THAN 10 YEARS

Can it be possible for a country to go from zero to climate hero or 12 GW of solar and wind power in less than 10 years and at a very low cost?

This is a daunting task for any country. But Uzbekistan, whose current installed capacity is just 14 GW, most of it fossil fuel-based, is taking up the challenge. Even if the target is ambitious, there is little doubt that it is achievable, given the pace of change in Uzbekistan and the commitment of its leadership.

In May 2020, Uzbekistan announced it would aim to build 8 GW of solar and wind power generation capacity from scratch. Since then, the country has already auctioned almost 1 GW of solar capacity. Recently conducted solar tenders secured the lowest solar tariffs for the entire EBRD region, a vast territory spanning several time zones from Mongolia to Morocco. In August 2021, Uzbekistan announced its ambition to raise this target to 12 GW – another major step demonstrating strong commitment to the green agenda and setting an excellent example in the run up to the COP-26 summit.

The Government of Uzbekistan has done a tremendous amount of work in a very limited period of time to make setting such a target possible, proudly supported by the EBRD. The EBRD has already financed the first 200MW solar PV in Uzbekistan through the first two projects 100MW in Nur Navoi with Masdar and 100MW with Total Eren in the Samarkand region. Green electricity produced by these power plants will be enough to supply approximately 70,000 households.

And there is more good news – auctions for 1 GW of wind power are underway supported by the EBRD. The first such auction, for 100 MW, attracted over 70 qualified investors and is also the first under Uzbekistan’s Public-Private Partnership (PPP) law developed with the Bank’s assistance in 2019.

This engagement in renewables is happening on the back of the EBRD’s extensive involvement in the broader energy sector reform and its work with public sector entities.

Since the introduction of currency and trade liberalisation in 2017, a number of reforms have been implemented in the country. They have been instrumental in attracting foreign investment to Uzbekistan and its power sector as well as in enabling the successful launch of renewable energy tenders. The unbundling of the sector monopoly, Uzbekenergo, setting up a new power market model, the adoption of the PPP Law and bankable power purchase agreements (all supported by the EBRD) contributed to the commercialisation of Uzbekistan’s power sector. The Bank is also financing investments by the National Electric Grid of Uzbekistan into the electricity transmission infrastructure in the Navoi region, which will help increase the penetration of intermittent renewables.

The development of renewable energy is part of Uzbekistan’s broader ambition to decarbonise its power sector. As demonstrated by studies conducted to formulate the EBRD-supported Low Carbon Pathway for Uzbekistan’s power sector, it is technically and economically feasible to achieve the Uzbek power sector carbon neutrality by 2050.

The EBRD supports the transformation of Uzbekistan and its ambitious reforms by increasing its regional presence (including a third regional office in Urgench, which opened in early 2021), supporting a broad range of reforms through technical cooperation projects and committing fresh funds to support public and private clients. The EBRD’s business model is a unique blend of sector expertise and long-term customer-tailored financing, combined with policy dialogue. To date, it has invested around € 2.4 billion in 97 projects across Uzbekistan.

The EBRD works with long-standing partners ranging from the Ministry of Investments and Foreign Trade to the Ministry of Energy, the PPP Development Agency, the Ministry of Finance and the Ministry of Economy.

Modern Uzbekistan is a young country, celebrating its 30th anniversary, but it is rooted in an ancient civilisation in which sciences such as algebra and astronomy flourished. Today’s fast-moving reforms in the power sector go hand in hand with Uzbekistan’s growing international profile in renewables and the decarbonisation of existing thermal power capacity. The country is responding to the global challenges and uncertainties of climate change. What is clear, though, is that the EBRD stands ready to support Uzbekistan every step of the way on this journey.

by Nandita Parshad
Managing Director, Sustainable Infrastructure Group EBRD