The Asian Development Bank (ADB) and Uzbekistan have signed a $200 million loan agreement to modernise the country’s electricity distribution networks. The financing will support infrastructure upgrades, reduce electricity losses and improve the reliability of power supplies amid growing demand.

The agreement was signed in Bangkok on October 15 by ADB President Masato Kanda and Uzbekistan’s Deputy Prime Minister and Minister of Economy and Finance, Jamshid Kuchkarov, The Caspian Post reports, citing UzDaily.

The programme envisages the modernisation of 60 key electricity distribution substations across the country, alongside the introduction of digital management systems. The upgrades are expected to reduce electricity losses, ease transformer overloading and improve the stability of power supplies to households, businesses and public institutions.

According to the ADB, the programme will also help create the conditions for connecting at least 3.3 gigawatts (GW) of new renewable energy capacity. Greenhouse gas emissions are expected to decrease by nearly 23,000 tonnes of carbon dioxide equivalent annually.

The need for modernisation has been driven by economic growth, urban expansion and rising electricity consumption. Outdated equipment and overloaded networks have made it more difficult to maintain reliable power supplies and connect new renewable energy facilities.

Beyond infrastructure improvements, the programme will strengthen the operational capacity of Uzbekistan National Electric Networks JSC, improve management and financial controls, and enhance staff skills. Particular emphasis will be placed on employee training and increasing women's participation in the energy sector.

The project will be the first ADB energy initiative in Uzbekistan implemented under the ADB-World Bank Full Mutual Reliance Framework (FMRF). It will also mark the country's first results-based financing programme in the energy sector.

The ADB will serve as the project's lead lender. Later in October, the World Bank plans to submit a proposal for an additional $100 million in financing to its Board of Executive Directors.

The initiative builds on the ADB's longstanding support for Uzbekistan's energy sector. Since 2010, the bank has provided the country with more than $3.4 billion in financing and guarantees for the sector.

The project is aligned with the goals of Uzbekistan's Uzbekistan 2030 strategy on renewable energy development and energy efficiency, as well as the ADB's country partnership strategy for Uzbekistan for 2024-2028.