ADB Signs $200m Deal to Upgrade Uzbekistan’s Power Grid and Cut Electricity Losses

The program is ADB’s first energy operation under the ADB–World Bank Full Mutual Reliance Framework and the first results-based lending operation in Uzbekistan’s energy sector.

Uzbekistan's growing cities, expanding economy, and rising household electricity use are putting more pressure on a power network already struggling with aging equipment. A new $200 million loan agreement with the Asian Development Bank (ADB) will help modernize the country's electricity distribution system, reduce power losses, and make supply more dependable.

ADB President Masato Kanda signed the agreement during a meeting with Uzbekistan's Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov. The investment will support improvements to the networks that supply homes, businesses, and public institutions, giving the country more room to connect renewable energy as demand increases.

Upgrades Planned for 60 Critical Substations

The Modernization of Electricity Distribution Systems Program will upgrade 60 critical distribution substations across Uzbekistan and introduce digital systems to improve network management.

Aging infrastructure, overloaded equipment, and electricity losses have made reliable service harder to maintain. These problems also limit the network's ability to accommodate additional renewable power, making improvements necessary for both existing consumers and future energy projects.

The work will rehabilitate substations and strengthen the operational capabilities of JSC National Electric Grid of Uzbekistan. Better equipment and network management are expected to reduce transformer overloading and electricity losses, helping the system deliver power more reliably.

"A reliable power supply is one of the most basic promises a modern economy must keep to its people," Kanda said. "This agreement will help Uzbekistan keep that promise as demand rises, with stronger networks that serve families, businesses, and public institutions and can carry more renewable energy."

A Stronger Network to Support Renewable Power

The investments are expected to help enable at least 3.3 gigawatts of renewable energy capacity and reduce greenhouse gas emissions by nearly 23,000 tons of carbon dioxide equivalent each year.

Connecting renewable generation requires a network capable of handling the additional power, which makes substations and the systems used to manage them an essential part of Uzbekistan's energy plans. The program addresses those needs alongside the everyday challenge of maintaining dependable electricity service.

Its scope extends beyond equipment. The national power transmission utility will receive support to strengthen technical skills, management practices, and financial controls, with workforce training and greater participation of women in the energy industry also included.

The program supports the Uzbekistan 2030 Strategy and national goals for renewable energy expansion and improved energy efficiency. It aligns with ADB's country partnership strategy for Uzbekistan covering 2024–2028.

ADB and World Bank Coordinate Financing

The program is ADB's first energy operation under the ADB–World Bank Full Mutual Reliance Framework and the first results-based lending operation in Uzbekistan's energy sector.

The framework allows the two institutions to rely on each other's due diligence and implementation arrangements, reducing repeated work and transaction costs. ADB will serve as the lead lender for this program.

World Bank management is expected to seek its Board's approval for an additional $100 million later in the month of the signing. That proposed financing remains subject to approval and is separate from the signed $200 million ADB loan.

The agreement builds on more than $3.4 billion in ADB financing and guarantees for Uzbekistan's energy sector since 2010, covering power generation, transmission, and distribution. This investment focuses on the infrastructure and operational skills needed to keep electricity moving reliably as the country's energy needs grow.