EBRD Remains Dedicated Partner To Uzbekistan In Its Renewable Energy Initiatives - Andi Aranitasi (Exclusive Interview)

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 4. We are in the process of developing of a new country strategy, which, once prepared and approved, will be a public document, Andi Aranitasi, the newly appointed Head of the European Bank for Reconstruction and Development (EBRD) office in Uzbekistan told Trend in an exclusive interview.

"Following the reengagement with the country in late 2017, the EBRD approved its 5-year country strategy in 2018. It identified the following operational and strategic priorities for our work in Uzbekistan," he said.

According to Aranitasi, those priorities included the enhancement of competitiveness by strengthening the role of the private sector's role in the economy, and also the promotion of green energy and resource solutions across sectors. The support for increased regional and international cooperation and integration has also been one of the pillars of the Bank's cooperation with Uzbekistan.

"The EBRD strategy for Uzbekistan recognized the need to strengthen the country's path to reform, expand the role of civil society, provide greater freedom to mass media and promote women's entrepreneurship. Our Bank continued working on the improvement of the investment climate in Uzbekistan by facilitating the activity of the Foreign Investors' Council, which is serving as a platform for dialogue between foreign investors and the authorities fostering reforms," he said.

Aranitasi also added that the EBRD has also been providing support for Uzbekistan's green transition. The Bank's investment is contributing to a long-term decarbonization plan that the EBRD and the government of Uzbekistan jointly developed and which aims to achieve a carbon neutral power sector by 2050.

Further speaking, the official noted that, in 2023, the EBRD has already organized the $205 million financial package for the construction of three greenfield solar power plants with total installed capacity of nearly 900 MW in Uzbekistan.

"Once commissioned, the three projects are expected to generate up to 2,200 GWh of electricity, providing power to over 1 million homes in Uzbekistan, and reducing annual CO2 emissions by up to 1.2 million tons," he said.

According to Aranitasi, the EBRD, the operations of which became fully aligned with the Paris Agreement, is providing support for Uzbekistan's green transition.

"Last year we financed major renewable energy projects such as 1 GW wind power plants in the Bukhara region (largest renewable investment for the Bank across all its economies) and a 500 MW greenfield wind power plant in the Navoi region of Uzbekistan," he noted.

The Bank has also financed the construction of a 100 MW wind power plant (WPP) in Karakalpakstan by providing a loan to a major international developer ACWA Power, Aranitasi said, pointing out that this project is a key milestone for the EBRD's cooperation in Uzbekistan, since it was tendered as part of the EBRD supported 2 GW wind auction program in the country.

"Uzbekistan is very ambitious in its green energy transition and we are delighted to see that Uzbekistan recently increased its renewable energy generation target from 12 GW all the way up to 25 GW by 2030. The EBRD remains a dedicated partner to Uzbekistan in its renewable energy initiatives and continue to support sustainable economic growth," he said.

With regard to cooperation between Uzbekistan and the Bank in the transport sector, Aranitasi stated that the EBRD will be supporting the rehabilitation of the national road network of the country, particularly in the Khorezm region, as well as the expansion of logistic hubs together with private sector partners.

"The EBRD is facilitating the enhancement of public-private partnership environment via support for the Tashkent-Samarkand road development. Our Bank is also planning to support the Electric Vehicle Charging Infrastructure Strategy as part of the post-signing technical assistance under Khorezm regional roads project. We are also exploring potential cooperation with the Uzbek Railways on the reforms agenda, electrification and the railcar fleet upgrades," he said.

The official pointed out that Uzbekistan is actively developing transport links with all of its neighbors, but as a landlocked country, it will have to rely on transit routes through other countries to present itself as viable transit option.

"Uzbekistan is currently pursuing multimodal transportation (road and rail) from China, through Kyrgyzstan by road, then onwards through the Trans-Afghan route or through Turkmenistan and Iran by road. Other options include the use of Middle Corridor or the Turkmen port of Turkmenbashi," he said.

In this regard, Uzbekistan Railways, the country's main freight carrier, need to be reformed to improve efficiency, the official said, noting that significant investment will be required to electrify sections of railway in the Fergana Valley, between the key cities of Bukhara and Khiva and elsewhere. The same goes for the rehabilitation of roads across the country. In parallel, Uzbekistan should modernize its rolling stock and improve its customs services to ensure smooth transit and transport.

At the same time, as Aranitasi pointed out, the route through Kazakhstan to its ports on the Caspian Sea seems to be most stable option for cargo travelling through Uzbekistan.

"However, there are multiple inefficiencies at border crossing points between the two countries and bottlenecks in the ports of Aktau and Kuryk. What is more, the Caspian Sea is not always navigable, so the Uzbek authorities are keen to explore alternatives," he explained.

Aranitasi further elaborated on the Bank's support for financial sector of Uzbekistan, noting that the overall potential for the development of this field in Central Asia is very high.

"This is particularly relevant for Uzbekistan given the size of its population and rather low penetration of banking services. The Bank is supporting the banking sector as well as non-banking financial institutions such as insurance, leasing companies and microfinanciers of Central Asia in multiple ways, including the support of trade and provision of funding to be used to improve access to finance for micro, small and medium-sized enterprises and equity investments in local banks and non-bank institutions," he explained.

According to Aranitasi, special efforts are put in place to support the green, inclusive and digital direction of partner financial institutions by specially designed programs including Women in Business and Youth in Business.

"They promote women entrepreneurship and create work opportunities for young businessmen. The most recent program is targeting digitalization of women-led/woman-owned businesses," the official said.

Green agenda is equally important for the EBRD, Aranitasi noted, adding that the Bank's Green Economy Financing Facility (GEFF) Uzbekistan Framework is not only encouraging green financing but also helping the Central Bank of Uzbekistan and partner-banks to build their climate risk mitigation capacity in line with the Paris Agreement the requirements.

Secondly, the EBRD is implementing capacity building advisory projects aimed at sharing best practices in banking sector of the Central Asia with the local financial institutions, the EBRD head of office said.

Further speaking, Aranitasi noted that the EBRD partner-banks participate in regional and international training and networking events.

"This helps them stay in touch with the most recent global industry trends and exchange views and experiences. We continue promoting environmental, social and governance (ESG) standards and good corporate climate governance (CCG) among financial institutions in the region. They will develop and implement guidelines and regulations to support the region's transition to a low-carbon and climate-resilient economy," he explained.

Aranitasi pointed out that the EBRD supports financial institutions in adopting a strategic approach to addressing ESG and climate-related risks, as well as to enhance CCG. The Bank currently has 11 financial partners in Uzbekistan and actively engage with them in green and inclusive lending as well as in support of interregional and international trade.


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