The Asian Development Bank (ADB) and the Shamol Zarafshan Energy Limited Liability Company (SZE), a subsidiary of the Abu Dhabi Future Energy Company Private Joint Stock Company of the United Arab Emirates (UAE), have signed a loan agreement of 52 million dollars to finance the first wind power plant in Uzbekistan and the largest ever developed in Central Asia.
The 500 megawatt (MW) plant will be located east of the city of Zarafshan, in the Tamdy district of the Navoi region of Uzbekistan.
It will help the country meet rapidly increasing energy demand, supply reliable power to underserved urban and rural areas, meet its climate action goals, and improve resilience to the impacts of climate change.
The facility will consist of 111 wind turbines, each with a capacity of 4.5 MW.
“The Zarafshan Wind Power Project shows how private sector investment can help countries that are heavily dependent on fossil fuels decarbonize their economies,” said ADB Private Sector Operations Department Director General Suzanne Gaboury.
“It will support Uzbekistan’s efforts to raise the share of clean energy in total generation to more than 25% by 2030, while helping the government supply reliable and affordable power to businesses, schools, health clinics and homes.”
The project is co-financed with the European Bank for Reconstruction and Development, the First Abu Dhabi Bank, the International Finance Corporation, the Japan International Cooperation Agency and Natixis.
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As part of the global financing package, ADB mobilized a $10 million B-loan tranche from the Dutch Enterprise Development Bank, FMO. The ADB also signed a US$19.5 million state-backed partial credit guarantee to mitigate the credit risk of the state-owned Joint Stock Company National Electric Grid of Uzbekistan (NEGU).
Like many Central Asian economies, Uzbekistan relies heavily on fossil fuels and most of its electricity is supplied by natural gas.
The Zarafshan wind project will generate 1,599 gigawatt-hours of clean energy per year and avoid more than 890,000 tons of carbon emissions. SZE will supply its power output to NEGU under a 25-year power purchase agreement.
“As one of the fastest growing economies in Central Asia, Uzbekistan’s energy demand will continue to increase, so it is crucial to diversify its energy mix with more renewable energy sources,” said the Officer-in-Charge of the Resident Mission of the ADB in Uzbekistan, Enrico Pinali.
“This is the largest wind power plant that the ADB has ever financed, and we are proud that it will support the government’s efforts to transition to a sustainable and green economy.”
SZE is a holding company owned by Masdar, based in the United Arab Emirates, a world leader in renewable energy.
Masdar has developed utility-scale and grid-connected projects, small-scale applications that provide energy access to remote communities, and carbon reduction projects around the world. Masdar and the ADB have previously partnered on multiple landmark renewable projects in the region.