ADB approves grant to support increased cross-border energy trading in Central Asia
Baku, Azerbaijan, Jan. 7
By Rashid Shirinov – Trend:
The Asian Development Bank (ADB) has approved a $4.5 million cluster regional technical assistance grant to support an increase in regional power trade in Central Asia Power System (CAPS) and explore potential reconnection of Turkmenistan to CAPS and its further expansion to Afghanistan, Trend reports citing the ADB website.
“With increased regional power trade, countries will be able to meet local demand for power and supply surpluses to their neighbors,” said Director of Energy Division at ADB’s Central and West Asia Department Ashok Bhargava. He added that this will improve regional energy security.
Power trade among Central Asian countries has declined dramatically since the collapse of the Soviet Union in 1991. First in 2003, Turkmenistan disconnected from CAPS and then in 2009, Tajikistan did the same. As a result, compared to 25,413 million kilowatt hour (kWh) traded in CAPS in 1990, the traded energy volume declined to 2,080 million kWh in 2016.
This caused widespread power outages notably in Tajikistan in winter and resulted in increased fossil fuel use by Kazakhstan, Turkmenistan, and Uzbekistan in summer mainly because hydropower surpluses from Tajikistan were not available to CAPS. Tajikistan has since reconnected to Uzbekistan and to CAPS in March 2018.
The technical assistance cost is $4.5 million, $1.5 million of which will be financed by ADB on a grant basis; $1 million by the Regional Cooperation and Integration Fund; $1 million by the Asian Clean Energy Fund; and $1 million by the High-Level Technology Fund.
The governments will provide counterpart support in the form of staff, office space, and supplies and other in-kind contributions.
ADB has committed $7.1 billion in loans and $85.9 million in technical assistance grants to Uzbekistan since it joined the bank in 1995. In 2018, ADB committed four loans totaling $993 million to improve power generation efficiency, improve primary healthcare services, support horticulture-related farmers and businesses for fixed asset investments, and support ongoing reforms through better economic management in the country.
Follow the author on Twitter: @ShirinovRashid