WASHINGTON, May 9, 2023—The World Bank’s Board of Executive Directors approved today a project contributing to the construction and operation of an energy-efficient natural gas-fired power plant in Uzbekistan’s Syrdarya region. Under the project, the World Bank will provide a payment guarantee of up to $29 million for the National Electrical Grid of Uzbekistan (NEGU) to support its obligations related to the new private power plant.
While Uzbekistan is moving toward greater use of renewables, natural gas still accounts for over 70% of power generation in the country. Its current aging fleet of thermal power plants is inefficient and results in high gas consumption, avoidable CO2 emissions, and low renewable integration.
This project supports Uzbekistan’s clean energy transition, which aims to enhance energy efficiency and deploy large-scale renewable energy sources. The new combined-cycled gas-turbine power plant in the Syrdarya region with a net effective capacity of around 1,580 megawatts (Syrdarya 2 CCGT plant) will provide more efficient and cost-competitive electricity to more than 3 million people, meeting an estimated 15% of electricity demand and comprising almost 10% of the currently installed power generation capacity in the country.
With a thermal efficiency rating of over 60%, the Syrdarya 2 CCGT plant will also be twice as efficient as the current fleet of thermal power plants and contribute to greenhouse gas emissions reduction, by displacing aged, inefficient generation in the country.
After the plant commissioning, its gas consumption savings in the initial years are anticipated at up to 3.5% of the country’s annual gas consumption (approx. 1.5-1.7 bcm per year) due to higher thermal efficiency. This will lead to net carbon emission savings in these first years of up to 2.8 million tons of CO2 emissions annually. The Syrdarya 2 CCGT is thus part of the sector’s least-cost technology mix to decarbonize the power system.
“Uzbekistan will require significant power generation and infrastructure to meet the needs of its growing population and economy. The modern Syrdarya 2 CCGT plant will provide more reliable and affordable electricity, helping to address the country’s energy shortages and increase the security and stability of its electricity supply,” said Marco Mantovanelli, World Bank Country Manager for Uzbekistan. “It will increase the flexibility of the power system and enable large-scale renewable energy generation deployment and integration in the grid over the medium-to-long term. These measures will contribute to the clean energy transition in Uzbekistan and the energy sector decarbonization plans by 2050.”
The Syrdarya 2 CCGT plant is the first and only competitively-tendered thermal independent power producer (IPP) being developed with private sector participation in Uzbekistan. It will be constructed and operated by a special purpose company, Enersok Foreign Enterprise LLC (Enersok), which is owned by a consortium of international investors comprising Électricité de France, Nebras Power, Sojitz Corporation, and Kyuden International.
Under the project, the NEGU will purchase the electricity generated by the power plant and benefit from the World Bank payment guarantee totaling $29 million to backstop a long-term Letter of Credit provided to support its payment obligations under the Power Purchase Agreement signed with Enersok.
Earlier this year, the International Finance Corporation (IFC), a member of the World Bank Group, supported this project by allocating a $150 million financing package and helping mobilize more than $1 billion in private financing needed to construct and launch the Syrdarya 2 CCGT plant.
The World Bank’s country program in Uzbekistan is among the largest in Europe and Central Asia region. It consists of 27 projects, with net commitments totaling around $5.7 billion. It supports the country’s reforms and modernization in various social and economic sectors, including the energy sector, which will improve the well-being of citizens, and contribute to the country’s economic growth.
