Vienna (UNA-OIC) – The OPEC Fund for International Development (OFID) has signed a $50 million term loan agreement with ACWA Power to support the construction and operation of a 1.5 GW combined-cycle gas-turbine power plant in Sirdarya, Uzbekistan.
The new plant, located near the border with Tajikistan, will replace an aging, less efficient thermal power facility, resulting in lower operating costs and a significant reduction in GHG emissions.
Although Uzbekistan is well electrified and electricity demand is increasing, the efficiency of its power plants is low due to outdated infrastructure and technologies. The country experiences regular power outages, which undermine the productivity of businesses and the delivery of energy to households.
The new Sirdarya plant is projected to boost generation efficiency and reduce GHG emissions by a minimum of 2.2 million tons/year. Upon completion, it is expected to meet 15 percent of power demand in Uzbekistan and comprise 8 percent of all installed power capacity. The adoption of modern technologies will provide a reliable, more consistent delivery of energy.
The Uzbek government is committed to modernizing and strengthening its electricity generation base across the country and has initiated a number of reforms that lay the foundation for encouraging private sector investment. The upgrading of the Sirdarya power plant represents the largest single private-sector-led project in Uzbekistan’s energy sector to date, with a total project cost of about $1 billion.
The European Bank for Reconstruction and Development, the Deutsche Investitions- und Entwicklungsgesellschaft mbH and commercial banks led by Standard Chartered Bank are also participating in the project. The commercial bank tranches will benefit from a political insurance cover provided by the Multilateral Investment Agency of the World Bank Group.
OPEC Fund Director-General Dr. Abdulhamid Alkhalifa said, “We are pleased to contribute to Uzbekistan’s massive efforts to upgrade and modernize the country’s power generation capacity with reliable and efficient infrastructure. Private sector participation in the energy sector will expedite this process and landmark projects such as Sirdarya will pave the way, setting examples of great cooperation among governments, development finance institutions and the private sector.”
The OPEC Fund and Uzbekistan have been development partners for more than two decades. The organization has to date committed funding to various sectors including but not limited to the banking, agriculture, transportation and education sectors to support Uzbekistan’s development priorities.
OFID was established in January 1976 by the then 13 member countries of OPEC; including the United Arab Emirates. It is the development finance institution established as a channel of aid to developing countries.