The European Bank for Reconstruction and Development (EBRD) is financing a 100 MW solar photovoltaic plant in the Navoi region of Uzbekistan, one of the first two privately owned renewable energy projects in the country.

The EBRD is providing an equity bridge loan of up to US$ 60 million to Nur Navoi Solar Holding for the construction and operation of the plant. The loan will allow the project investors Masdar, owned by Mubadala Investment Company, a global investment holding established and fully owned by the Government of Abu Dhabi, to borrow the amount of equity it is putting into the project.

This innovative financial structure is currently not available from international or domestic lenders in Uzbekistan. It will be complemented by a financial package of up to US$ 60 million arranged by the International Finance Corporation (IFC) and the Asia Development Bank (ADB). The financing package includes senior loan of up to a $20 million from IFC’s own account, financing of up to $20 million from Canada-IFC Blended Climate Finance Program and a loan of up to $20 million from the ADB. IFC will also provide of up to $1 million in interest rate swaps.

The World Bank is providing a US$5.1 million payment guarantee for the Government of Uzbekistan to backstop the payment obligations under the project.

Uzbekistan aims to develop 8 GW of solar and wind power capacity by 2030. By financing the Nur Navoi project, the EBRD is also supporting the replacement of Uzbekistan’s ageing power sector infrastructure and the establishment of an effective regulatory framework, which has now paved the way for this first competitively tendered renewable energy project in the country. On completion, the plant will contribute to annual reductions of 156,000 tonnes of CO2 emissions.