Listen to the article
The World Bank has approved a $100 million loan to upgrade Uzbekistan’s electricity distribution network, targeting 60 key substations across the country in a programme designed to cut energy losses, improve supply reliability and open the grid to large-scale renewable power.
The bank’s board approved the financing on 27 October, making it the second major international tranche for the same programme. The Asian Development Bank had already committed $200 million on 30 September, and the Uzbek government is contributing $71 million from the state budget, bringing the total cost of the Power Distribution Systems Modernisation programme to $371 million.
What the Money Is Meant to Fix
Much of Uzbekistan’s distribution infrastructure dates back several decades. Ageing substations and overloaded networks have produced persistent energy losses and supply interruptions for households, businesses and public facilities. The programme’s stated targets are specific: annual losses at the upgraded substations are projected to fall by 20,000 megawatt-hours by 2031, and the modernised grid is expected to be capable of absorbing at least 3.3 gigawatts of renewable capacity. Annual greenhouse-gas emissions are forecast to drop by nearly 23,000 tonnes of CO₂ equivalent.
Those renewable-integration targets matter because Uzbekistan has set a national goal of reaching 25 gigawatts of installed renewable capacity by 2030 — an ambition that cannot be realised without a grid capable of handling intermittent generation at scale.
The World Bank estimates the programme will support the creation of roughly 11,700 additional quality jobs within five years of the upgraded facilities coming into operation.
How the Two Lenders Will Work Together
The World Bank and the ADB are co-financing the programme under what they call a Full Mutual Reliance Framework, an arrangement that aligns project preparation and supervision procedures between the two institutions. The stated purpose is to reduce administrative costs and avoid duplicating oversight processes — a practical consideration when two multilateral lenders are simultaneously active in the same national programme.
The implementing agency will be the joint-stock company National Electric Networks of Uzbekistan. Beyond the physical upgrade of substations, the programme includes digitalisation of infrastructure and institutional capacity-building for the company, covering financial management systems, cybersecurity, environmental and social compliance, and gender equality in employment.
Najy Benhassine, the World Bank’s regional director for Central Asia, said reliable electricity supply was essential for daily life and economic activity, and that the partnership with the ADB would help modernise Uzbekistan’s energy infrastructure, improve resource efficiency and lay the groundwork for further economic growth.