World Bank, Masdar sign US$159 million financing for 250MW Uzbekistan solar-plus-storage project

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Masdar’s Nur Bukhara Solar PV LLC FE will build and operate the solar-plus-storage project. Image: Total Eren

The World Bank and Masdar, the UAE’s state-owned renewable energy developer, have signed a US$159 million financing package to support the development of a 250MW solar-plus-storage project in Uzbekistan.

The project, which is central Asia’s first renewable project to be built with a co-located battery energy storage system (BESS), will include a storage capacity of 63MW. It will be built by Nur Bukhara Solar PV LLC FE, a new project company owned and controlled by Masdar, which won a bid to build the project in December 2022 by offering to sell electricity generated at the project at US$0.03044/kWh.

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Nur Bukhara Solar has already signed a 25-year power purchase agreement (PPA) to sell the plant’s electricity to Uzbekistan’s state-owned electricity grid, and has committed to managing the BESS component for the next ten years. The company will build the project in the Bukhara region in southern Uzbekistan, on the Turkmenistan border, but has not provided a timeline for the project’s construction and commissioning.

The project’s financing includes loans of US$53 million, provided by the World Bank’s International Finance Corporation (IFC), and loans worth US$106 million from the Asian Development Bank (ADB), Dutch Entrepreneurial Development Bank and the Japan International Cooperation Agency.

These funds also include loans of US$20 million each from the Canada-IFC Blended Climate Finance Program and the ADB-managed Leading Asia’ Private Sector Infrastructure Fund, and will add to the growing portfolio of IFC-funded renewables projects, which has reached a total capacity of 16.9GW in the last decade.

“This project will enhance Uzbekistan’s energy security through the use of innovative solutions and technologies,” said Marco Mantovanelli, World Bank country manager for Uzbekistan. “In addition to attracting private sector participation, the World Bank guarantee has also contributed to ensuring an affordable supply of renewable energy for households and businesses in the country.”

This “guarantee” refers to a US$12 million commitment made by the World Bank to help the Uzbek government with its payment obligations for the project, and tools like this can be helpful in de-risking new renewable projects for prospective investors. Earlier this year, Bloomberg New Energy Finance analyst Jenny Chase told PV Tech Premium that de-risking renewable investments can be critical, as investors are only likely to support projects where “the risk is worth the likely return”.

The news also follows a number of new Masdar investments in the Uzbekistan solar space, including the commissioning of two solar projects, with a combined capacity of 511MW, in March this year.

PV Tech’s publisher Solar Media will host the Renewable Energy Revenues Summit on 21-23 May 2024 in London. The event will explore PPA design, the role of effective policy, evolving strategies for large energy buyers and more. For more information, go to the website.

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