ADB signs $52 million loan with Masdar to build largest wind power plant in Central Asia

By Asian Development Bank

ADB signs $52 million loan with Masdar to build largest wind power plant in Central Asia

The Asian Development Bank (ADB) and Shamol Zarafshan Energy Foreign Enterprise Limited Liability Company (SZE), a wholly owned subsidiary of Abu Dhabi Future Energy Company Private Joint Stock Company (Masdar), signed a $52 million loan agreement to finance Uzbekistan’s first wind power plant and the largest yet developed in Central Asia.

The 500-megawatt (MW) plant will be located to the east of Zarafshan City, in the Tamdy District of the Navoi Region in Uzbekistan. It will help the country meet rapidly rising energy demand, deliver reliable power supplies to underserved urban and rural areas, meet its climate action goals, and improve resilience against climate change impacts. The facility will comprise 111 wind turbine generators, each with a capacity of 4.5 MW.

“The Zarafshan wind power project shows how private sector investment can help countries largely dependent on fossil fuels to decarbonize their economies,” said ADB Private Sector Operations Department Director General Suzanne Gaboury. “It will support Uzbekistan’s efforts to lift clean energy’s share of total generation to more than 25% by 2030 while helping the government deliver reliable and affordable power to businesses, schools, health clinics, and households.”

The project is cofinanced with the European Bank for Reconstruction and Development, First Abu Dhabi Bank, International Finance Corporation, the Japan International Cooperation Agency, and Natixis. As part of the overall financing package, ADB mobilized a $10 million B-loan tranche from the Dutch Entrepreneurial Development Bank, FMO. ADB also signed a sovereign-backed partial credit guarantee of $19.5 million to mitigate the credit risk of the state-owned off-taker, Joint Stock Company National Electric Grid of Uzbekistan (NEGU).

Like many Central Asian economies, Uzbekistan is heavily reliant on fossil fuels with most of its electricity supplied by natural gas. The Zarafshan wind power project will generate 1,599 gigawatt-hours of clean energy annually and avoid more than 890,000 tons of carbon emissions. SZE will provide its energy output to NEGU under a 25-year power purchase agreement.

“As one of Central Asia’s fastest-growing economies Uzbekistan’s demand for energy will continue to increase, so it’s crucial to diversify its energy mix with more renewable sources of power,” said Officer-in-Charge of ADB’s Uzbekistan Resident Mission Enrico Pinali. “This is the largest wind power plant that ADB has ever financed, and we are proud that it will support the government’s efforts to transition to a sustainable, green economy.”

SZE is a special purpose vehicle owned by United Arab Emirates-based Masdar, a global leader in renewable energy. Masdar has developed utility-scale, grid-tied projects, small-scale applications providing energy access to remote communities, and carbon abatement projects globally. Masdar and ADB have previously partnered in multiple landmark renewable projects in the region.