Building Central Asia's Biggest Wind Farm

Diversifying the Energy Mix

Uzbekistan’s power generation facilities are about half a century old. They mainly use fossil fuels, operate beyond their expected lifespan, and badly need rehabilitation, if not replacement.

No longer efficient, Uzbekistan’s old facilities cause power outages in cities and, more so, in rural areas, where blackouts can last from 6 hours a day to a few weeks in some villages. Households, business activities, and public services are all severely affected.

Around 2010, Uzbekistan’s rapid economic growth propelled an increase in the demand for power from industries and businesses, along with growing residential areas. Meanwhile, Uzbekistan’s aging power infrastructure could not generate enough to fill in the supply–demand gap.

Rich in coal, oil, and gas reserves, Uzbekistan seemed impervious to any energy shortage. But as the country is highly dependent on inefficient and old natural gas generation assets for electricity, Uzbekistan is one of the most energy- and carbon-intensive economies in the world.

The government has moved to quickly develop its renewable energy sector to help diversify the country’s energy mix and attract private investment in the sector. The government aims to install 7 gigawatt (GW) solar and 5 GW wind capacity, for a total of at least 12 GW of renewable energy capacity by 2030.

Partnership for Wind Power

In 2022, ADB approved the Uzbekistan: Zarafshan Wind Power Project, a $95 million loan to Shamol Zarafshan Energy Foreign Enterprise Limited Liability Company to finance, build, own, and operate the country’s first wind power plant. The project will help Uzbekistan 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.

Expected to be the largest in Central Asia, the 500 megawatt (MW) grid-connected wind power plant will be located east of Zarafshan City and consist of 111 wind turbines, each with a capacity of 4.7 MW.

For Uzbekistan, this wind farm is key to its future energy needs: fulfilling rising demand, delivering energy equity for the underserved, meeting climate goals, and achieving climate resilience.

Seung Duck Kimsenior energy specialist and project officer, ADB

From ADB’s perspective, the Zarafshan Wind Power Project is unique in that it combines a nonsovereign or private sector loan with a sovereign-backed partial credit guarantee of $20 million to mitigate the credit risk of the state-owned offtaker, National Electric Grid of Uzbekistan. As part of the overall financing package, ADB mobilized a $10 million B-loan tranche from the Dutch Entrepreneurial Development Bank - FMO.

Several institutions and agencies are providing parallel cofinancing, among them the European Bank for Reconstruction and Development, First Abu Dhabi Bank, International Finance Corporation, the Japan International Cooperation Agency, and Natixis.

“The Zarafshan Wind Power Project will contribute to Uzbekistan’s expansion of its renewable energy resources, which is the centerpiece of the country’s commitment under the Paris Agreement,” Seung Duck Kim, ADB senior energy specialist and project officer, said.

“For Uzbekistan, this wind farm is key to its future energy needs: fulfilling rising demand, delivering energy equity for the underserved, meeting climate goals, and achieving climate resiliency,” Kim said.

Embracing the Winds

The Zarafshan Wind Power Project fully aligned with the government’s Strategy for the Transition to the Green Economy, 2019–2030, and greenhouse gas reduction goals set in the nationally determined contributions.

The Zarafshan Wind Power Plant is expected to be completed and fully operational by 2025 and producing and contributing at least 500 MW of renewable power to Uzbekistan’s national grid. It will contribute to a targeted increase in the share of power produced from renewable energy sources in the total generation mix to more than 25%, with the share of wind power at 5%, by 2030.

The project highlights the importance of public–private partnerships in delivering large-scale renewable energy projects. “The successful collaboration among ADB, the Government of Uzbekistan, and Shamol Zarafshan Energy FE LLC will hopefully pave the way for additional private sector investments in Uzbekistan,” Danyaal Malik, ADB investment specialist and project officer, said.