Uzbekistan: Transformation Of Energy Sector Of Uzbekistan

A new Presidential Decree No. PP-113 dated 3 February 2022 “On Measures to Implement the Project on “Electricity Sector Transformation and Sustainable Electricity Transmission” with the participation of the World Bank, as well as on “Development and Efficiency Improvement of the Transmission Grid System of the Republic” was adopted.

The document was adopted to develop the transmission grid system, improve its reliability and safety, prevent accidents, and ensure sustainable electricity supply to sectors of the economy and the population.

On 25 June 2021, the World Bank agreed to finance investment projects with:

1) a concessional loan of USD330 million;

2) a non-concessional loan of USD50 million from the International Development Association;

3) a concessional loan of USD43 million;

4) grant funds of USD4 million from the Green Climate Fund for the following components of the Project on “Electricity Sector Transformation and Sustainable Electricity Transmission”.

The Decree approves:

1.    the main technical and economic indicators of the following investment projects:

• introduction of a supervisory control and data acquisition (SCADA) software and hardware complex;
• modernisation and reconstruction of transmission grid system with the participation of the World Bank (Stage II);

2.    a list of loans from international financial institutions attracted to finance investment projects of National Power Grid of Uzbekistan JSC and for which savings are expected.

At the same time, it should be taken into account that:

• By introducing a unified power system, including a modern automated system for operational control of power flows through power grids, uninterrupted and stable operation of the power system is ensured;
• Due to replacement of old electrical equipment and equipment at 22 substations with new equipment, including installation of 20 sets of new power transformers and autotransformers at 10 substations, the capacity of the substations was increased to 912.7 MW;
• Costs of equipment overhaul and reduction of electricity consumed by transformers for own needs are reduced by an average of USD14.2 million per year.

On 6 October 2021, a letter of mandate was signed between National Power Grid of Uzbekistan JSC and the European Bank for Reconstruction and Development to provide a corporate loan without a state guarantee to finance the investment project “Construction of 500 kW Sarymai (Khorezm region) - Jangeldy (Bukhara region)” with a length of 130 km.

The 110-500 kW distribution facilities at the disposal of Thermal Power Plants JSC and Uzbekhydroenergo JSC will be transferred to the management of National Grid at balance (residual) value along with the staff units. At the same time, the property rights of business entities transferred from one entity to another are not subject to taxation on all types of taxes.

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