The European Bank for Reconstruction and Development (EBRD) issued a $66.4 million loan, guaranteed by the government, to National Electric Grid of Uzbekistan (NEGU), the bank press service said.

The funds will be used for the construction of a 230-kilometer 500 kV power transmission line connecting the settlements of Sarimay in Khorezm regions and Muruntau in Navoi region.

The project aims to address “bottlenecks” in the energy system and reduce power outages, especially during peak demand periods. It will also aid in the integration of renewable energy sources, in line with Uzbekistan’s low-carbon energy strategy developed with EBRD support.

The project is expected to reduce greenhouse gas emissions by 4,143 tons annually and decrease electricity losses by 34,636 MWh per year.

In November, deputy minister of energy Umid Mamadaminov said that Uzbekistan had made significant strides in power generation but now needs infrastructure for energy storage and transmission.

“Infrastructure is crucial for integrating intermittent energy sources like wind and solar, a challenge many countries face. We need at least 5,000 km of transmission lines, including 500 kV and 200 kV high-voltage lines, and substations,” he said.

This week, it was also announced that the World Bank was supporting the development of a 100 MW solar power plant in Khorezm, to be implemented by Sarimay Foreign Enterprise, a subsidiary of French energy company Voltalia.

The World Bank’s $3.5 million guarantee will secure payment obligations for NEGU’s purchase of electricity from Sarimay Foreign Enterprise.