Uzbekistan sets a precedent today with the announcement of the winning private sector bidder for the country’s first ever competitively tendered solar power public-private partnership (PPP). This announcement opens new markets for private investment and makes progress towards the country’s goal to increase use of renewable energy. This PPP, tendered under the World Bank Group’s Scaling Solar program, will soon add 100 MW of clean, renewable energy to the country’s energy mix.
On Friday, Shukhrat Vafaev, Deputy Minister of Investment and Foreign Trade, Chairman of Tender Committee, announced the winner of the program’s competitive auction to develop a utility-scale solar plant located in the Navoi region in central Uzbekistan. Masdar Clean Energy of United Arab Emirates was awarded the project with a bid to supply solar power at just ¢2,7 per kilowatt hour, one of the lowest tariffs seen in emerging markets.
“The project is part of an effort by the Government of Uzbekistan to develop up to 5 gigawatts of solar power by 2030 to diversify the country’s energy mix,” said Deputy Minister Vafaev. “By structuring a transparent and competitive tender, we are assured of getting the most competitive power prices from private investors, helping to set a benchmark for solar power tariffs in the country.”
Djamshid Kuchkarov, Deputy Prime Minister and Minister of Finance, also announced that given the successful outcome of the first tender, the Government of Uzbekistan would soon be launching another tender for an additional PPP for 400MW of solar power, followed by one more PPP for 500 MW.
As transaction adviser, IFC helped the Ministry of Investment and Foreign Trade and the Ministry of Energy to design and tender the PPP, which attracted eleven prequalified bidders and five competitive bids. This robust investor interest is groundbreaking in a country where the energy sector was traditionally state-run.
“We are proud to open new markets for solar power in Uzbekistan with the country’s first open tender public-private partnership that will supply renewable energy to the Uzbek people at competitive prices,” said Wiebke Schloemer, IFC Director for Europe and Central Asia. “This PPP success sets a precedent for future private sector participation in the country and sends a positive message to the global investment community.”
The program is being implemented with support from the Austrian Ministry of Finance and Switzerland’s State Secretariat for Economic Affairs (SECO) as well as the Government of the Netherlands.