The World Bank has approved a $150 million concessional loan to help Uzbekistan expand its small hydropower sector and improve electricity supply across the country. The project will involve private sector participation, including local developers and banks.

Electricity demand in Uzbekistan is expected to double by 2030, reaching more than 120 billion kilowatt-hours. Although electricity production is increasing, about 10 percent of demand remains unmet. This has led to frequent outages, especially in rural and underserved areas, due to problems in transmission and distribution.

The new project will support the development of small hydropower plants (SHPPs), with capacities between 100kW and 5MW. These plants will operate on existing irrigation canals, making them suitable for distributed electricity generation in regions with limited access to reliable power.

SHPPs are considered low-cost and require little maintenance. By using the existing irrigation canal network, they offer opportunities for private investment in small-scale renewable energy.

“The Government of Uzbekistan plans to establish nearly 3,000 SHPPs, increasing installed capacity to 160 MW by 2026 and providing electricity to an additional 280,000 people,” said Tatiana Proskuryakova, World Bank Director for Central Asia. “The new World Bank-funded project, to be implemented by the Ministry of Energy between 2025 and 2030, will support this goal by providing local developers with access to finance for launching new SHPPs, delivered through local banks. The project will also help mobilize around $38 million in commercial financing to expand hydropower infrastructure nationwide.”

By 2030, the project aims to install up to 150MW of SHPP capacity, producing over 520GWh of electricity annually. It is also expected to reduce greenhouse gas emissions by up to 430,000 tons of CO₂.

Approximately 270 sites suitable for SHPPs have been identified, most with capacities between 100 and 1,000 kilowatts.

Electricity generated from these SHPPs will be purchased by JSC Regional Electric Power Networks. This is expected to improve the reliability of electricity in rural and underserved areas and diversify Uzbekistan’s energy mix.

The project may also support job creation and growth in related industries and small and medium enterprises, contributing to regional economic development.