World Bank backs 250-MW solar-storage project in Uzbekistan

The World Bank Group has agreed to a financial package to support the construction and operation of a new 250-MW solar project with 63 MW of energy storage in Uzbekistan, developed by UAE-based Masdar and the local government.

The agreed financing package includes an up-to-USD-53-million (EUR 48.7m) loan from the International Finance Corporation (IFC) and loans for up to USD 106 million from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO) and Japan International Cooperation Agency (JICA). IFC will also provide interest rate swaps for the entire debt amount.

In addition, the World Bank is providing a guarantee of up to USD 12 million to support the government’s payment obligations under the project. The investment package also includes blended finance support in the form of concessional senior loans of USD 20 million each from the Canada-IFC Blended Climate Finance Program and ADB-managed Leading Asia’s Private Sector Infrastructure Fund (LEAP).

The solar-plus-storage project, to be implemented in the Alat district of the Bukhara region, marks Central Asia's first renewable energy initiative with an integrated battery energy system (BESS) component, according to the announcement. Once commissioned, the plant will generate 585 GWh of renewable energy annually, enough to power about 75,000 local households.

Masdar, through a project company, is in charge of developing, financing, building, owning, operating, and maintaining the facility. The company won the project in a tender back in December 2022.

The output of the future plant will be sold to National Electric Grid of Uzbekistan JSC under a 25-year power purchase agreement (PPA). There is also a 10-year operating term for the BESS component signed with the state-run grid operator.

(USD 1 = EUR 0.921)

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