Uzbekistan is set to become a regional powerhouse in renewable energy as a landmark financing agreement was sealed in late October between the Asian Development Bank (ADB), Saudi Arabian ACWA Power, Japanese Sumitomo Corporation, Chubu Electric Power Co. Inc., and Shikoku Electric Power Co. Inc. The consortium has committed to constructing two massive solar installations coupled with advanced battery energy storage systems (BESS) in the Samarkand and Bukhara regions — a project that will reshape the country’s energy landscape and mark one of the largest renewable energy undertakings in Central Asia.
A generation-scale infrastructure play
The two Samarkand projects (Samarkand 1 and Samarkand 2) represent an unprecedented combination of solar generation and energy storage capacity for the region. The facilities will add a combined 1,000 megawatts of solar generation power alongside battery storage systems holding approximately 1,336 megawatt-hours of energy capacity. This configuration is designed to smoothen power supply fluctuations inherent to solar generation, ensuring more reliable and stable electricity delivery throughout the national grid. Upon completion, the installations will supply clean electricity to roughly 600,000 households — approximately five percent of Uzbekistan’s population — while simultaneously reducing annual carbon dioxide emissions by around 1.3 million tons.
Beyond the power stations themselves, the project encompasses construction of new high-voltage transmission lines and two additional electrical substations, critical infrastructure investments aimed at strengthening the overall resilience and connectivity of Uzbekistan’s energy distribution network. These ancillary components ensure that the generated power can flow efficiently to consumption centers across the country.
Multilayered financing architecture
The financing structure reflects the complexity and scale of the undertaking. The ADB organized a primary funding package of 140 million US dollars, comprising 70 million from the bank’s own resources, 10 million from the Asia-Pacific Project Preparation Facility (LEAP 2) managed by the ADB, and 60 million in syndicated credit lines with the ADB as lead lender. Recognizing the investment risks inherent to large infrastructure projects in developing markets, the bank further extended up to 85 million dollars in credit guarantees tied to tariff payment obligations, substantially de-risking the investment proposition for private capital participants.
This multi-layered approach proved effective in mobilizing substantially larger sums from private and development sector partners. The ADB’s initial commitments and guarantees catalyzed more than 1.2 billion dollars in total project capitalization, demonstrating how strategic public sector financial instruments can unlock private investment at scale. The financing consortium also includes the European Bank for Reconstruction and Development (EBRD), the Islamic Development Bank (IsDB), and the Japan Bank for International Cooperation (JBIC). Commercial banking participation, underpinned by export credit insurance from Japan’s NEXI agency, comes from Standard Chartered Bank, The Norinchukin Bank, Sumitomo Mitsui Banking Corporation, and KfW IPEX-Bank GmbH.
Operational timeline and long-term commitment
Construction is anticipated to conclude after 2027, with generated electricity to be supplied to Uzbekistan’s national electricity grid operator under 25-year power purchase agreements (PPAs). This extended contract horizon provides revenue certainty to project investors while locking in electricity pricing for the state utility over two and a half decades.
National energy transition strategy
The Samarkand projects align directly with Uzbekistan’s strategic pivot toward renewable energy independence. The country currently generates approximately 80 percent of its electricity from natural gas — a legacy of Soviet-era energy infrastructure — but aims to increase renewable sources to 30 percent of installed capacity by 2030. With proven solar resources and increasingly cost-competitive renewable technologies, this ambition is now becoming operationally achievable. The battery storage component is particularly significant, addressing the intermittency challenge that has historically constrained solar deployment in the region.
Strategic significance for international business
For international companies in manufacturing, construction, logistics, and industrial sectors, this energy infrastructure advancement carries substantial implications. A modernized, renewable-powered electricity system enhances Uzbekistan’s competitive positioning for attracting foreign manufacturing investment. Reliable, clean electricity at competitive tariffs becomes a tangible business advantage for industrial operators, particularly in energy-intensive sectors such as textile production, metalworking, and food processing. Construction companies stand to benefit from the infrastructure expansion accompanying the energy transition. Additionally, improved energy infrastructure supports the broader business climate, reducing operational risks and boosting confidence among international investors evaluating Central Asian market entry or expansion. The successful execution of this multilateral financing model also signals Uzbekistan’s creditworthiness and commitment to modern governance practices, a positive signal for future foreign direct investment across multiple sectors.
