Masdar Raises Financing For Uzbek Solar & Storage Project

• The World Bank has announced a financing facility for a utility-scale solar and storage project in Uzbekistan 
• Masdar is developing the project and will use the facility to construct and operate it in the Bukhara region 
• The bank says the addition of BESS will ensure flexibility and greater security of energy supply 

The World Bank has arranged a financing facility for what it calls the 1st renewable energy initiative with an integrated battery energy storage system (BESS) component in Central Asia. The 250 MW solar PV project in Uzbekistan with a 63 MW BESS is being developed by Abu Dhabi's Masdar. 

According to the bank, adding BESS to the solar power plants will improve flexibility and efficiency of the power system. It will ensure greater security of energy supply and mitigate intermittency of renewable energy generation. 

The financing facility signed with Masdar and the Uzbek government includes a $53 million loan from the International Finance Corporation (IFC) and up to $106 million in loans from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank (FMO), and Japan International Cooperation Agency (JICA). The IFC is also providing interest rate swaps for the entire debt amount. 

Additionally, the World Bank is providing up to $12 million guarantee to support the government's payment obligations under the project. The Canada-IFC Blended Climate Finance Program and ADB-managed Leading Asia's Private Sector Infrastructure Fund (LEAP) are providing blended finance support as concessional senior loans of $20 million each. 

Masdar will use the proceeds to construct and operate the plant in the Alat district of Bukhara region. It will implement the project through Nur Bukhara Solar PV LLC FE project company. 

The project will generate over 585 GWh of renewable energy annually on completion for the state-owned National Electric Grid of Uzbekistan under a 20-year power purchase agreement. It includes a 10-year operating term for BESS. 

"The new solar plant with a battery energy storage system will not just boost the uptake of renewable energy in the country, but also help stabilize and strengthen existing electricity grids and aid the global fight against climate change," said IFC Director for Türkiye and Central Asia Wiebke Schloemer. 

The Abu Dhabi company has committed to developing 2.15 GW solar and wind energy capacity along with 500 MWh of BESS in Uzbekistan under a co-development agreement with the Ministry of Energy (see Masdar For 2 GW RE In Uzbekistan). 

Uzbekistan targets to increase its aggregate renewable energy capacity by up to 25 GW or 40% of its overall electricity consumption by 2030. 

The World Bank says it is helping the country develop 2 GW of solar and 5 GW of wind energy capacity by attracting private sector investments. 

It is already backing a 100 MW solar plant in Navoi, 440 MW solar projects in Samarkand and Jizzakh and a 500 MW wind power plant in Navoi, all developed by Masdar (see Masdar Wins Uzbek's Sherabad Solar Power Auction).