Uzbekistan to get Central Asia’s first renewable energy facility with utility-scale battery storage

The World Bank on Tuesday (May 21) announced that it will support a 250-megawatt (MW) solar photovoltaic plant with a 63-MW battery energy storage system (BESS) in Uzbekistan -- Central Asia's first renewable energy facility with a utility-scale battery storage component.

The World Bank, Abu Dhabi Future Energy Company PJSC (Masdar), and the Government of Uzbekistan signed a financial package to fund the Nur Bukhara greenfield solar power plant and BESS facility. The project aims to expand clean and reliable electricity access to approximately 75,000 households.

"Our growing partnership with Uzbekistan in renewables is bringing clean and sustainable energy to the population at competitive prices," said Wiebke Schloemer, Director for Türkiye and Central Asia at International Finance Corporation (IFC).

"The new solar plant with a battery energy storage system will not just boost the uptake of renewable energy in the country, but also help stabilize and strengthen existing electricity grids and aid the global fight against climate change."

The solar power plant will be constructed in the Alat district of the Bukhara region in Uzbekistan and is projected to cut more than 327,000 metric tons of CO2 emissions annually by generating more than 585 GWh of renewable energy per year.

IFC acted as the lead transaction advisor for the project and the Uzbek government announced Masdar as the winning bidder for the PPP tender in December 2022.

The financing package for the project will include up to $53 million loan from IFC and loans for up to $106 million from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO), and Japan International Cooperation Agency (JICA). The financing will support the construction and operation of the new plant.

The World Bank is providing a guarantee of up to $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 $20 million each from the Canada-IFC Blended Climate Finance Program and ADB-managed Leading Asia's Private Sector Infrastructure Fund (LEAP).

"This project will enhance Uzbekistan's energy security through the use of innovative solutions and technologies," noted Marco Mantovanelli, World Bank Country Manager for Uzbekistan.

"In addition to attracting private sector participation, the World Bank guarantee has also contributed to ensuring an affordable supply of renewable energy for households and businesses in the country."

The Nur Bukhara greenfield solar power plant and battery energy storage (BESS) will be implemented through Nur Bukhara Solar PV LLC FE owned by Masdar. The project company will be responsible for developing, financing, building, owning, operating, and maintaining the solar plant and BESS. As part of the agreement, it will sell electricity to the state-owned National Electric Grid of Uzbekistan JSC under a 25-year Power Purchase Agreement for the project, including a 10-year operating term for the BESS component, signed by these two entities.