Uzbekistan to upgrade 60 power substations with $200mn ADB loan

The Asian Development Bank (ADB) has agreed to lend Uzbekistan $200mn to modernise its electricity distribution infrastructure. The objectives are to reduce power losses, improve supply reliability and prepare the network for growing renewable energy capacity.

ADB president Masato Kanda signed the loan agreement with Uzbekistan’s Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov on October 17.

“A reliable power supply is one of the most basic promises a modern economy must keep to its people,” said Kanda. “This agreement will help Uzbekistan keep that promise as demand rises, with stronger networks that serve families, businesses and public institutions and can carry more renewable energy.”

The Modernisation of Electricity Distribution Systems Programme will rehabilitate and upgrade 60 key electricity distribution substations nationwide, alongside the introduction of digital tools for network management.

The investment comes as Uzbekistan’s expanding economy, growing cities and increasing household electricity consumption place additional strain on its power infrastructure. Ageing facilities, overloaded equipment and electricity losses have made it more difficult to maintain a stable supply and integrate renewable energy into the grid.

ADB expects the programme to reduce electricity losses and transformer overloading, improve service reliability and facilitate the integration of at least 3.3 gigawatts of renewable energy capacity. It is also projected to cut annual greenhouse gas emissions by nearly 23,000 tonnes of carbon dioxide equivalent.

The initiative will strengthen the technical and operational capacity of JSC National Electric Grid of Uzbekistan, including improvements to management practises and financial controls. Training programmes and measures to increase women’s participation in the energy sector are also included.

The loan represents ADB’s first energy-sector operation in Uzbekistan under its Full Mutual Reliance Framework with the World Bank. It is also the bank’s first results-based lending operation in the country’s energy sector.

The framework allows ADB and the World Bank to use each other’s due diligence and implementation arrangements, helping streamline project preparation and reduce administrative costs. ADB will lead the financing, with World Bank management expected to submit a proposal for an additional $100mn to its board later in October.

ADB has provided more than $3.4bn in financing and guarantees for Uzbekistan’s energy sector since 2010, supporting electricity generation, transmission and distribution.

The new programme is aligned with Uzbekistan’s 2030 Strategy, which includes expanding renewable energy and improving energy efficiency, as well as ADB’s country partnership strategy for Uzbekistan for 2024–2028.