IFC helps modernize power distribution services in Tashkent

IFC is assisting the government of Uzbekistan in attracting a private investor to modernize the electricity distribution infrastructure in the capital Tashkent and help improve the connectivity for more than 700,000 customers.

IFC will act as Lead Transaction Advisor to the government of Uzbekistan for the country's first public-private partnership (PPP) in the power distribution sector, which aims to rehabilitate, modernize, and operate Tashkent's aging distribution system. The project includes structuring and preparing an open and competitive international tender to identify an investor with the necessary experience and capacity.

Uzbekistan is one of the most energy-intensive economies in the world, consuming more than three times the average of other countries in Europe and Central Asia, because of outdated electricity transmission and distribution infrastructure leading to high energy losses.

"The proposed project is critical to resolving the problems facing our distribution system, including reducing high energy losses and power outages," said Sarvar Khamidov, Deputy Minister of Investments, Industry and Trade. "Through this PPP, we will be able to modernize the distribution of energy in our country, scale up our renewable energy capacity, and ensure energy security for consumers."

The government is planning to increase the country's renewable energy capacity by 12 gigawatts by 2030 to help diversify the energy mix, reduce CO2 emissions, and reach Paris Agreement commitments. Despite significant progress in meeting its renewable energy goals, investments in the distribution sector have lagged, and significant investment will be needed to establish a renewable-friendly grid.

"As one of the region's fastest-growing economies, Uzbekistan needs sustainable infrastructure solutions. For this, the private sector's capital and know-how are key," said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. "This landmark project underscores IFC's commitment to attracting more foreign investment to promote sustainable – and transformative – infrastructure projects in the country."

Supporting renewable energy projects and opening the energy sector to private investments is a pillar of IFC's work in Uzbekistan and the Central Asia region. IFC has been advising the Uzbek government since 2018 on attracting private investments in the power sector and is currently assisting the government in developing over 1 gigawatt of solar power PPPs through transparent, competitive international tenders aligned with the highest environmental, social, and governance standards.