OPEC Fund, ACWA Power sign $40m loan deals to build wind farms in Uzbekistan

The OPEC Fund for International Development (OPEC Fund) has entered into two loan agreements worth $20m each with Saudi company ACWA Power.

The funds will be used to support the construction and operation of two wind power plants in Uzbekistan.

The financing was provided through a consortium of international lenders, with the European Bank for Reconstruction and Development serving as the technical bank, and Standard Chartered Bank acting as the documentation bank.

The consortium includes French development financier Proparco, Germany’s development bank Deutsche Investitions- und Entwicklungsgesellschaft, the Industrial and Commercial Bank of China, and the Asian Development Bank.

Building renewable energy generation capacity in Uzbekistan

The two wind power facilities, the 500MW Dzhankeldy wind farm, and the 500MW Bash wind power plant, are located in the Bukhara region of Uzbekistan.

These new plants are expected to support the country’s renewable energy generation capacity, while also reducing greenhouse gas emissions and diversifying its energy mix.

The loan agreement for the Dzhankeldy wind farm will support the development of the plant’s infrastructure, including its construction, operation, and maintenance, as well as the development of 128 kilometre transmission infrastructure.

The plant is expected to generate 1,550 GWh of electricity annually. The Bash wind power plant, on the other hand, will generate more than 1,650 GWh of electricity annually and will include the construction and installation of 160-kilometre transmission infrastructure.

Together, the two plants are expected to reduce CO2 emissions by 1.8 billion tonnes.

We have signed two separate US$20 million loan agreements with @ACWAPower to support the construction and operation of the 500 MW Dzhankeldy #windfarm and the 500 MW Bash wind power plant in the Bukhara region of #Uzbekistan. 🇺🇿 #SDG7
More info: https://t.co/GEfWqBtPXY pic.twitter.com/23CRGmy0Rw

— The OPEC Fund for International Development (@TheOPECFund) April 4, 2023

OPEC Fund director-general Dr Abdulhamid Alkhalifa said, “Increasing private sector participation is key to support Uzbekistan’s ambitious energy transition. We are happy to cooperate with the authorities as well as with our development and private sector partners on energy sector projects that will boost the share of renewables in energy generation and provide reliable and affordable clean energy.”

Uzbekistan’s government forecasts the electricity demand to double by 2030. To meet this increasing energy demand and to mitigate climate and energy security risks, the country plans to add 3GW wind and 5GW solar power capacities to its energy mix.

In the last decade, Uzbekistan has introduced a series of reforms to decarbonise and liberalise the energy sector and to create an environment conducive to private sector investment.

OPEC Fund and ACWA Power build cooperation

Saudi Arabia-headquartered ACWA Power is an international developer and operator of power generation and water desalination facilities.

The OPEC Fund and ACWA Power have previously cooperated in energy projects in Jordan (Zarga), Egypt (Kom Ombo) and Uzbekistan (Sidarya).

To date, the OPEC Fund has provided close to $600m public and private sector financing in support of Uzbekistan’s sustainable growth agenda in line with its country partnership strategy.

Supported by grants, this funding has helped the sustainable development of the energy, water & sanitation, agriculture, transport, education and financial sectors with a focus on small and medium-sized enterprises.

In other news, in December, ACWA Power signed power purchase agreements and investment agreements with Uzbekistan to develop the 1.5 GW Kungrad wind farm in Karakalpakstan, Uzbekistan, formerly called the Karakalpakstan Wind IPP.

The wind farm comprises three 500MW wind power projects owned by three subsidiaries, namely  ACWA Power Kungrad Wind 1, ACWA Power Kungrad Wind 2, and ACWA Power Kungrad Wind 3.

Read: Saudi Arabia’s ACWA Power to develop 1.5GW wind plant in Uzbekistan

Read: ACWA Power, Uzbekistan ink three key energy agreements worth $12bn