Tashkent, Uzbekistan (UzDaily.com) — The Asian Development Bank (ADB) has approved a US$200 million loan that will help Uzbekistan modernize and digitalize its power distribution system to improve energy efficiency and make electricity services more reliable. 

Under the Distribution Network Digital Transformation and Resiliency Project, 26 distribution substations across the country’s region s will be upgraded to digital substations, including a supervisory control and data acquisition (SCADA) system. Digital protection relays and climate-proof project design will also improve the substations’ operational reliability and resilience to natural hazards and extreme weather events, preventing regional blackouts. 

“Modernizing Uzbekistan’s outdated distribution network is critical to the country’s long-term green and low-carbon strategy,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “We are pleased to support this project which will not only improve the delivery of power services, but also facilitate the clean energy transition by cutting electricity losses that lead to higher greenhouse gas emissions.”

Uzbekistan’s distribution system serves 7.6 million residential and industrial consumers. Despite achieving 100% household electrification, the country suffers unreliable electricity service because of aging and overloaded infrastructure, built mostly in the 1960s. Power outages persist and are particularly severe during winter, when lower temperatures lead to increased demand on power for heating, which hampers critical social services such as schools and clinics.

Energy demand in Uzbekistan is projected to further increase from 67 terawatt-hours in 2019 to 120.8 terawatt-hours in 2030. The government plans to build an additional 17 gigawatts (GW) of capacity adding to existing capacity of 12.9 GW, including 8 GW of renewable energy projects by 2030.

“This project will enable Uzbekistan to reliably deliver the additional energy the country needs to generate to meet rising demand,” said ADB Senior Energy Specialist Seung Duck Kim. “Upgrading transmission and distribution systems will also allow them to integrate more renewable energy into the grid, given that smart and flexible systems can better manage the variability of renewable energy like solar and wind.” 

ADB’s project will also help strengthen the financial management capacity of Regional Electric Power Networks (REPN), the state-owned distribution company. A US$250,000 technical assistance grant will also be provided to support the institutionalization of gender mainstreaming in REPN and promote the participation of women and girls in the energy sector, including through training for female students as part of an ongoing knowledge partnership program between REPN and Tashkent State Technical University. 

Agence Française de Développement will be providing €70 million (around US$75 million) in cofinancing that will be partially administered by ADB.

Uzbekistan joined ADB in 1995. Since then, the bank has committed loans, grants, and technical assistance amounting to US$10.8 billion to the country. 

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.