By Anders Lorenzen
Say the name Uzbekistan, and clean energy is not necessarily the first thing you think about. Not surprisingly, the former Soviet nation is highly dependent on natural gas for electricity. As of 2012, only 3% of the country’s electricity generation came from renewables, and that is despite the country having significant solar resources.
But perhaps there could soon be a sea change in energy policies in the country.
The country has signed a mandate with the International Finance Corporation (IFC), a member of the World Bank Group, to increase its renewable energy power capacity by encouraging private sector investment in Uzbekistan’s renewable energy sector.
IFC will act as transaction advisor and will provide advice to both the government and the state-owned utility Uzbekenergo to realize a 100 megawatt (MW) solar power plant. This would just be the first phase of what would be a larger initiative to generate up to 1 gigawatt of new solar power capacity.
This is an initiative the country’s Deputy Prime Minister, Sukhrob Kholmuradov, is keen on. He states that “Developing renewable energy in Uzbekistan is crucial to diversify our power supply. The joint work of IFC, the State Investment Committee and Uzbekenergo could bring up to $1 billion in private investment to develop solar photovoltaic plants. This will not only improve the supply but also create a transparent mechanism to attract more private sector investment, which could be successfully replicated in other energy spheres.”
This is just the latest IFC initiative to tackle climate change. Globally, over the past decade, IFC has invested $18.3 billion of its own funds in long-term financing for climate-smart projects and mobilized an additional $11 billion from other investors. The institution says that through these investments they have developed expertise in key climate markets including solar, hydropower, wind, energy storage, green buildings, and waste-to-energy.
Many countries from the former Soviet Union have struggled to make the switch towards cleaner energy sources. In the case of Uzbekistan, this is clearly due to old Soviet policies and infrastructure. And Russia’s state-owned gas giant, Gazprom, is still very active and with a plentiful supply of natural gas resources.