Uzbekistan, Tashkent, April 29 / Trend, D. Azizov /
The Board of Directors of the World Bank (WB) has approved a loan of $100 million in additional funding under the project to improve the energy efficiency of industrial enterprises in the country, the World Bank's representative office in Tashkent told Trend on Monday.
According to the statement, the loan will be granted by the International Development Association (a part of the World Bank) for 25 years, including a five-year grace period.
Allocation of additional lending was driven by the demand for measures to improve energy efficiency and promote energy-saving measures announced by the government as key priorities for economic development.
The project, which is designed to take place over five years, will have two components - capacity building in energy efficiency ($1 million) and a line of credit for participating banks ($ 99 million).
Two state-owned banks, Asaka and Uzpromstroybank, and private Hamkorbank will be the project's financial intermediaries. It is expected that additional funding will be ensured through the implementation of sub-projects with a potential 200,000 megawatts in energy savings and a reduction of carbon dioxide emissions by 400,000 tons.
As reported in 2011, the World Bank provided a loan to the Government of Uzbekistan in the amount of $ 25 million for a project to improve energy efficiency of industrial enterprises of the republic.
The borrowed funds were allocated from IDA resources in the form of an interest-free loan for 35 years, including a 10-year grace period with payment of commission obligations.
As part of the project, three Uzbek banks, Asaka, Hamkorbank and Uzpromstroybank, were allocated $8 million for on-lending to industrial enterprises, implementing projects on energy saving and energy efficiency of production of at least 20 percent annually. Loan funds are used to purchase technology and equipment for the optimization of the production system in order to reduce energy consumption.
According to the WB, it is expected that the entire amount of the loan will be fully mastered by the end of 2014 ahead of the 12-month initial project schedule, the effect of which is estimated at 50,000 megawatts of savings.
Uzbekistan joined the World Bank in 1992. As of April 2013, the total amount of the active commitment of the World Bank with regard to Uzbekistan amounted to $987.5 million for 11 projects.