Uzbekistan is preparing to overhaul the backbone of its electricity distribution system after the World Bank approved a $100 million loan for a nationwide modernization program. The initiative is designed to improve the efficiency and reliability of power supplies while giving the grid greater capacity to absorb electricity from renewable sources and deliver it to households and businesses.
A broader financing package for the power grid
The World Bank’s executive board approved the financing on October 27. The program is being developed jointly with the Asian Development Bank under a global framework for mutual reliance in project financing. The ADB approved a separate $200 million loan for Uzbekistan in late September, while the Uzbek government is contributing $71 million from the state budget. Total program financing will therefore reach $371 million.
Implementation has been assigned to Uzbekistan’s National Electric Grid company. The project will focus on the modernization and digitalization of 60 strategically important substations across the country, with the aim of reducing electricity losses, easing pressure on aging infrastructure and improving the reliability of supplies.
Renewables will test the system’s capacity
Uzbekistan has set a target of reaching 25 gigawatts of renewable-energy capacity by 2030. Achieving that goal will require a more powerful and technologically advanced transmission and distribution network. A substantial share of the country’s existing grid was built decades ago, and many substations are already operating under heavy loads.
According to current projections, the upgraded infrastructure will allow at least 3.3 gigawatts of additional renewable capacity to be integrated into the grid by 2031. Annual electricity losses are expected to decline by 20,000 megawatt-hours, while greenhouse-gas emissions could fall by nearly 23,000 tonnes of carbon-dioxide equivalent each year.
The program is also expected to create approximately 11,700 jobs in the power sector over five years. “By joining forces with the ADB, we are not only helping Uzbekistan modernize critical infrastructure in its electricity system, but also ensuring more efficient use of resources and achieving more significant results for the country,” said Nadji Benhasin, the World Bank’s Regional Director for Central Asia.
For international companies in construction, engineering, electrical equipment, digital infrastructure, architecture and industrial design, the program signals a sizeable pipeline of opportunities linked to substation upgrades, grid automation and renewable-energy integration. More reliable electricity distribution could also improve the operating environment for manufacturers, commercial property developers, hospitality projects and other energy-intensive businesses considering expansion in Uzbekistan.
