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The Asian Development Bank has agreed to lend Uzbekistan $200 million to overhaul its electricity distribution network, targeting ageing substations, chronic transmission losses and the infrastructure bottlenecks that have slowed the country’s shift toward renewable energy.
The loan agreement was signed on 15 October in Bangkok by ADB President Masato Kanda and Uzbekistan’s Deputy Prime Minister and Minister of Economy and Finance, Jamshid Kuchkarov, on the sidelines of the bank’s annual meetings in Thailand.
What the Programme Will Do
Under the programme, 60 strategically important electricity distribution substations across Uzbekistan will be reconstructed and modernised. Digital management systems will be introduced to improve network control and reduce the overloading of transformers that the ADB says has undermined supply reliability.
The bank attributes the strain on Uzbekistan’s grid to a combination of rapid economic growth, urban expansion and rising household electricity demand — all pressing against infrastructure that has not kept pace. Outdated equipment and persistent transmission losses compound the problem, and the same constraints have made it difficult to connect new renewable energy capacity to the national grid.
Once completed, the programme is expected to cut electricity losses, ease transformer overloads and stabilise supply. Critically, it is designed to create the technical conditions for connecting at least 3.3 gigawatts of renewable energy capacity — a figure that signals the project’s importance not just for reliability today but for Uzbekistan’s longer-term energy transition. Annual greenhouse gas emissions are projected to fall by roughly 23,000 tonnes of carbon dioxide equivalent as a result.
Institutional Firsts and World Bank Coordination
The programme also targets the institutional capacity of Uzbekistan’s national grid operator, JSC Uzbekistan National Electric Networks, covering staff technical training, governance and financial oversight systems, and efforts to increase women’s participation in the energy sector.
The ADB describes the loan as the first energy programme it has undertaken with Uzbekistan under a mutual reliance mechanism with the World Bank — an arrangement that allows both institutions to draw on each other’s assessments and implementation procedures, reducing duplication and transaction costs. It is also the first results-based lending programme in Uzbekistan’s energy sector, meaning disbursements are tied to the achievement of defined outcomes rather than input expenditure alone.