OPEC Fund's US$50m loan to increase efficient power generation capacity in Uzbekistan
VIENNA, April 16, 2021 /PRNewswire/ -- The OPEC Fund for International Development (the OPEC Fund) has signed a US$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 ageing, 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Uzbekistan is well electrified and electricity demand is increasing, the efficiency of its power plants is low due to outdated infrastructure and technologies.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 tonnes / 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 US$1 billion. The European Bank for Reconstruction and Development (EBRD), the Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) 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 (MIGA) 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.
About the OPEC Fund
The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed more than $22 billion to development projects in over 125 countries with an estimated total project cost of $187 billion. Our vision is a world where sustainable development is a reality for all.
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