World Bank, Masdar, Uzbekistan partner to fund 250-MW Solar Plant with Battery Storage

The International Finance Corporation (IFC) served as the lead transaction advisor, structuring a transparent and competitive tender process.

The World Bank Group, Abu Dhabi Future Energy Company PJSC (Masdar), and the Government of Uzbekistan have signed a financial package to fund a 250-megawatt (MW) solar photovoltaic plant with a 63-MW battery energy storage system (BESS). This project aims to expand clean and reliable electricity access to approximately 75,000 households in Uzbekistan.

This initiative marks Central Asia's first renewable energy project integrating a BESS component, which will enhance the efficiency and flexibility of the power system, ensuring greater supply security and mitigating the intermittency of renewable energy generation.

Financial Package DetailsThe financing package includes:

$53 million loan from IFC

$106 million in loans from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO), and Japan International Cooperation Agency (JICA)

Interest rate swaps provided by IFC for the entire debt amount

Additionally, the World Bank is providing a $12 million guarantee to support the government’s payment obligations. The investment package also includes $20 million in concessional senior loans each from the Canada-IFC Blended Climate Finance Program and the ADB-managed Leading Asia’s Private Sector Infrastructure Fund (LEAP).

Project ImpactLocated in the Alat district of the Bukhara region, the solar power plant is expected to:

Reduce over 327,000 metric tons of CO2 emissions annually

Generate more than 585 gigawatt hours of renewable energy per year

Government and Private Sector InvolvementThe International Finance Corporation (IFC) served as the lead transaction advisor, structuring a transparent and competitive tender process. Masdar, the United Arab Emirates’ flagship renewable energy company, was announced as the winning bidder in December 2022. The project will be implemented by Nur Bukhara Solar PV LLC FE, a project company owned by Masdar, responsible for the development, financing, construction, ownership, operation, and maintenance of the solar plant and BESS. The company will sell electricity to the National Electric Grid of Uzbekistan JSC under a 25-year Power Purchase Agreement, including a 10-year operating term for the BESS.

Strategic GoalsUzbekistan aims to scale up renewable energy generation to 25 GW, or 40% of the country’s overall electricity consumption, by 2030. This project supports Uzbekistan’s clean energy transition, decarbonization, and economic growth. The World Bank Group is assisting in developing 2,000 MW of solar and 500 MW of wind energy by attracting private sector investments.

Statements from Key Officials“Our growing partnership with Uzbekistan in renewables is bringing clean and sustainable energy to the population at competitive prices,” said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. “The new solar plant with a battery energy storage system will not just boost the uptake of renewable energy in the country, but also help stabilize and strengthen existing electricity grids and aid the global fight against climate change.”

“This project will enhance Uzbekistan’s energy security through the use of innovative solutions and technologies,” noted Marco Mantovanelli, World Bank Country Manager for Uzbekistan. “In addition to attracting private sector participation, the World Bank guarantee has also contributed to ensuring an affordable supply of renewable energy for households and businesses in the country.”

Previous and Ongoing ProjectsThe World Bank and IFC have supported various renewable energy projects in Uzbekistan, including:

A 100 MW solar power plant in the Navoi region (operational since 2021)

440 MW solar power plants in the Samarkand and Jizzakh regions (under construction)

The first 500-MW wind power plant in the Navoi region (under construction)

With the new project in the Bukhara region, the renewable energy generation capacity supported by the World Bank Group’s operations in Uzbekistan will increase to about 1.3 gigawatts.