(MENAFN- Trend News Agency)
BAKU, Azerbaijan, July 3. As renewable energy
sources are intermittent, developing efficient energy storage
solutions will be key to ensuring a stable power supply in
Uzbekistan, the International Finance Corporation (IFC, a member of
the World bank Group) Regional Manager for Uzbekistan and
Turkmenistan, Neil McKain, told Trend in an exclusive interview.
“Uzbekistan, like many countries, confronts numerous obstacles
in its efforts to switch to renewable energy. The country has
substantial natural gas reserves, and the Economy is heavily
reliant on fossil fuels. Transitioning away from these energy
sources can be economically and politically challenging. It
requires building public support and raising awareness of the many
benefits of renewable energy,” he said.
Neil McKain noted that building the necessary infrastructure,
such as solar farms, wind turbines, and an updated electrical grid,
requires significant investment, time, and technical expertise.
Also, securing the required capital can be difficult, as it often
involves large upfront costs and long-term investment before seeing
returns. Addressing these multifaceted challenges will require
coordinated efforts from the government, private sector, and
international partners.
“The country is well equipped to fulfill its growing energy
needs and transition to a clean energy economy. Renewable energy
can help diversify the energy mix and reduce its heavy reliance on
natural gas. The government is focused on increasing the share of
renewables in power production by up to 25 GW, or 40 percent of the
country's overall electricity consumption, by 2030. These efforts
support the country's clean energy transition and address the
increasing demand for energy in Uzbekistan's economy and among its
citizens. In this context, the World Bank Group is helping
Uzbekistan develop 1,000 MW of solar and 500 MW of wind energy by
attracting private sector investments,” he emphasized.
According to him, the IFC is deeply committed to supporting
renewable energy in emerging markets, and Uzbekistan is a key
country in this regard. The corporation has been involved in
several initiatives, including advising on and financing solar
power projects. One of the first projects is a solar plant in
Uzbekistan's Navoi region, which provides electricity to 31,000
homes. This project was established through a public-private
partnership (PPP) between the Uzbek government and Emirati Masdar.
As a transaction adviser, IFC assisted the government in designing
and tendering the PPP under its Scaling Solar Program. It is now a
major milestone in the country's renewable energy journey.
The representative of IFC noted that, in collaboration with
other lenders, the corporation also provided a financing package to
support the construction of a 500-megawatt wind farm in the Navoi
region, which is also being built by Masdar. Capable of powering
500,000 homes, it will be the largest facility of its kind in
Central Asia - and, incidentally, the largest wind farm IFC has
ever sponsored.
“Together with our state and private sector partners, we are
currently exploring the use of shallow geothermal energy for
heating and cooling buildings. Utilizing this energy source within
the country can help reduce reliance on gas and electricity and
ease the burden on the grid. We are currently mapping the licensing
and permit processes, as well as the local production and
distribution of heat pumps. Additionally, we are exploring
regulatory and incentive policies to encourage investments, promote
the expansion of surface geothermal solutions, and implement
surface geothermal projects in the country,” Neil McKain
emphasized.
He stressed that at this point, IFC's portfolio in PPP
Transaction Advisory in Uzbekistan includes projects at various
stages of development and covers the energy, healthcare, and
education sectors, with an overall expected mobilization of
approximately $700 million. In addition, the IFC has closed several
projects in the energy and healthcare sectors, with an overall
expected mobilization of approximately $1.8 billion.
“But there is still more that can be done. While most current
PPP projects are in the energy generation, utilities, and health
sectors, the government is now starting to turn its attention to
other important sectors such as education, irrigation, transport,
water supply, and wastewater treatment. These sectors have been
strained by years of underinvestment and suboptimal operation and
maintenance, as well as rapid rates of urbanization, but we believe
PPPs can attract much-needed investment and private sector
expertise to these sectors. We stand ready to support this,
including through developing, structuring, and implementing PPP
projects,” the representative of the IFC emphasized.
He added that another key innovation in the solar energy sector
is the integration of battery energy storage systems. These systems
are crucial for addressing the intermittent nature of solar power,
as they store excess energy produced during peak sunlight hours and
make it available during periods of low solar generation or high
demand. This not only ensures a stable energy supply but also
enhances the efficiency of solar plants. The battery energy storage
market is at a critical juncture in its evolution, with prices and
technologies expected to become even more favorable over time.
“In Uzbekistan, the use of innovative battery storage with solar
plants is still new, but the potential benefits are significant.
Battery storage can help stabilize the national grid, reduce
reliance on fossil fuels, and provide a more reliable power supply
to remote areas. It can also support the country's goals of
reducing greenhouse gas emissions and transitioning to a more
sustainable energy system,” he said.
According to Neil McKain, for these reasons, supporting energy
storage technology is a strategic focus for Uzbekistan, as it will
extend the reach and uses of renewable energy. By helping to
introduce technologies in the energy sector, IFC supports
Uzbekistan's efforts to ramp up its use of renewables, improve
energy security, increase grid stability, and expand access to
electricity.
“The government of Uzbekistan is highly supportive and
responsive, having implemented reforms to attract foreign
investment and liberalize the energy market. This creates a
favorable environment for investment in renewable energy in the
country, and with the government's proven commitment and
implementation of ongoing projects, Uzbekistan is on track to
become a regional leader in renewable energy. Moreover, the
country's strategic location and rich natural resources provide a
unique opportunity not only to meet its own energy needs but also
potentially to export clean energy in the future. IFC remains
strongly committed to facilitating sustainable energy projects. We
also encourage other investors to explore these opportunities and
contribute to the country's renewable energy future,” he added.
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