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Electricity sector development programme for a low-carbon economy

Project

L’AFD accompagne le gouvernement ouzbek dans la mise en oeuvre des réformes du secteur de l’électricité pour une économie bas-carbone
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Project start date
Status

Ongoing

Project duration
20 years
AFD financing amount
150 000 000 €
Country and region
Eurasia and Beyond, Uzbekistan
Location
Ouzbékistan
Type of financing
Loan
Beneficiaries
Republic of Uzbekistan, Ministry of Energy, Uzgidromet
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Energy transition is a key issue in Uzbekistan. AFD is supporting the government in the implementation of electricity sector reforms for a low carbon economy via a first Energy-Climate Public Policy Loan co-financed with the Asian Development Bank (ADB).

Context

In 2018, Uzbekistan ratified the Paris Agreement with the objective, in its Nationally Determined Contribution (NDC), to reduce its energy intensity by 10% by 2030 compared to 2010. The government has launched an ambitious policy of development and renovation of the energy sector with the support of a group of donors. To support its energy reform program, the government has asked the ADB to join forces with AFD to co-finance this Energy-Climate Policy Based Loan (PBL) in 2020.

Description

This loan aims to implement energy reforms to ensure a low carbon development path.

The public policy matrix is structured around 4 pillars:

  • strengthening the legal and institutional framework of the electricity sector;
  • improving financial sustainability and attracting private investment;
  • decarbonizing of electricity production;
  • reducing energy demand.

In addition to ADB support, the project includes a Technical Assistance program led by AFD. This program includes:

  • a study on the impact of electricity tariff increases on vulnerable populations;
  • the design and implementation of an action plan to improve women’s employability in the energy sector;
  • a study on the modelling of low-carbon scenarios up to 2050, to support the government in the preparation of a more ambitious NDC for 2023.

With the ADB, AFD will set up a mechanism to monitor the reforms in order to establish a biannual public policy dialogue.

Impacts

This sectoral support is anopportunity for AFD to participate in public policy dialogue on structuring energy issues in Uzbekistan. It contributes to the viability of many investments over the coming decade in the areas of electricity transport and distribution, the development of renewable energies by the private sector and energy efficiency.