BAKU, Azerbaijan, Feb.15
Trend:
The Government of Uzbekistan aims at developing the renewable energy sector in order to diversify the energy balance of the country and attract private investments, Zafar Khashimov, International Financial Corporation (IFC) Country Officer for Uzbekistan, told Trend in an interview.
"The Government of Uzbekistan and IFC have agreed to develop up to 900 MW of solar energy through Public-Private Partnership projects. This mandate follows a previous mandate between the Government of Uzbekistan and IFC for a Public-Private Partnership (PPP) to develop a 100 MW Solar photovoltaic (PV) power plant in the Navoi region that achieved a winning bid of just 2.7 US cents per kilowatt hour," Khashimov said.
The country officer noted that recently, the government of Uzbekistan and IFC signed an advisory agreement appointing IFC as a transaction adviser to the government to structure and tender a series of solar PPP projects to design, finance, construct, and operate solar power plants with total capacity of up to 900 MW.
Khashimov added that under the transaction advisory mandate, the package of IFC’s advisory services will include assessing, together with the World Bank, the right size and location for solar PV power plants in the country’s grid.
Group of Banks will work on simplifying and speeding up tenders, ensuring strong participation and competition from committed industry players, providing fully developed templates of bankable project documents that can eliminate negotiation and speed up financing, ensuring competitive financing and insurance attached to the tender and available to all bidders, delivering competitive bidding and ensuring rapid financial close, and managing risks and enhancing credits to lower financing costs and deliver power at lower tariffs.
"Uzbekistan is highly dependent on natural gas, which accounts for 82 percent of the country’s electricity generation. The government aims to develop the renewable energy sector to diversify the country’s energy mix and attract private investments. This project opens new markets for private investment and makes progress towards the country’s goal to increase use of renewable energy," noted Khashimov.
"Masdar Clean Energy of the United Arab Emirates was awarded the project with a bid to supply solar power at just 2.67 cents per kilowatt hour, one of the lowest tariffs seen in emerging markets. It was the country’s first open tender public-private partnership that will supply renewable energy to the Uzbek people at competitive prices. This public-private partnership success has set a precedent for future private sector participation in the country, sending a positive message to international investors," said the officer.
He further noted that World Bank will support the establishment of an enabling environment for renewable energy deployment. This goal will be achieved through improving the legal, regulatory and institutional framework in Uzbekistan, as well as leveraging the World Bank guarantee instruments to provide credit enhancement and risk mitigation comfort for potential private investors.
Khashimov said that the World Bank will support the transformation and commercialization of Uzbekistan's electricity transmission company for its priority investments aimed at digitalization of electricity sector, rehabilitation and expansion of the grid to facilitate the integration of large-scale grid-connected renewables. The initiative also aims to enhance the reliability of electricity supply and strengthen Uzbekistan’s connectivity and electricity trade with other Central Asian states.
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