“We are proud to be supporting Uzbekistan’s decarbonisation efforts and energy transition journey. The Sirdarya project will provide cleaner, more efficient and cost- competitive gas power that can be used across industries in Uzbekistan and is expected to meet 15 percent of power demand in Uzbekistan,” said ACWA Power Sirdarya LLC’s Chief Investment Officer Clive Turton. “Power generated will be about eight percent of the total installed power capacity in the country.”

In November 2020, the Asian Infrastructure Investment Bank (AIIB) was invited to take part in financing the project. AIIB already had an ongoing relationship with ACWA Power in the Ibri solar power project in Oman. The project offered another opportunity to work with an experienced energy developer with a strong global track record in delivering and operating large-scale clean energy projects under the PPP model.

In June 2021, AIIB approved USD100 million in non-sovereign-backed financing (NSBF) for the Sirdarya 1,500-megawatt CCGT Power Project, co-financed with the European Bank for Reconstruction and Development, other development financial institutions and some MIGA-backed commercial lenders.

"This is a great example of an investment with multiple participants from Asia," said AIIB Senior Investment Operations Specialist Mehek Marwaha, who leads the project team. "ACWA Power, the project sponsor, is from Saudi Arabia, the contractor is from China (China Gezhouba Group) and Mitsubishi Power, the turbine supplier, is from Japan."

The Sirdarya project is AIIB's first NSBF in Uzbekistan and the largest in Central Asia. It is also the first large-scale independent power producer (IPP) project in the country.

"The project is expected to achieve at least 60 percent efficiency, saving almost twice the natural gas currently used for electricity production compared with older plants. Once operational, it will increase the overall generation capacity in Uzbekistan and help reduce greenhouse gas emissions, offsetting 2.2 million tonnes of carbon dioxide emissions each year,” said Turton. "The plant's modern and highly efficient facilities represent a major investment in baseload generation capacity in the country, which is in great demand because of the population's evolving needs."

Under its Energy Strategy, AIIB has committed to supporting Members’ transitions to a less carbon-intensive energy mix to allow them to meet their goals and commitments under the Paris Agreement and Sustainable Development Goal 7. The project is thus strongly aligned with this Strategy.

"The project is helping develop high-efficiency baseload power generation capacity in Uzbekistan and also meets several thematic priorities of AIIB including technology- enabled infrastructure and private capital mobilization," Mehek said.

"Two key features of the project meet the Bank's priority on technology-enabled infrastructure," Mehek continued. "First is the proposed zero liquid discharge technique of the CCGT, which balances water security and efficiency and considers the local water resource context. Second, the project's turbine technology, which is technically capable for flexible operation and also has the potential for technology-driven enhancements such as hydrogen blending."

She also said that through the project, unprecedented mobilization of commercial banks under the Multilateral Investment Guarantee Agency (MIGA) tranche has been achieved. This will be the first baseload IPP in Uzbekistan financed by international commercial lenders and meets the Bank's thematic priority on private capital mobilization.

In 2021, despite the challenges presented by COVID-19, the project is on track.

"We have achieved all the key milestones set for 2021," Turton said, “including the project’s groundbreaking, land allotment order and subsequent handover to the engineering, procurement and construction (EPC) contractor, mobilizing the EPC contractor, hiring all resources on schedule, setting up infrastructure and meeting all construction targets despite the challenges of COVID-19 measures."

The project achieved financial closure in Sept. 2021 for USD747 million and procurement and construction works will continue till 2024.