Director of the Asian Development Bank (ADB) office in Uzbekistan Kanokpan Lao-Araya in an interview with journalists in Milan, where the annual ADB meeting is taking place, spoke about investments in renewable energy, food security and the privatization program in the country, a correspondent for Gazeta.uz reports.

Energy

According to her, ADB will continue to support the Government of Uzbekistan in reforming the renewable energy sector in the coming years, including wind and solar power, as well as battery energy storage systems (BESS). Investments in this sector will also involve the private sector through public-private partnerships (PPPs).

Specifically, in 2025, ADB plans to finance a project to build a 500 MW solar photovoltaic (PV) power plant and a 500 MWh battery energy storage system (BESS), transmission line, and other supporting infrastructure in Samarkand, which will be one of the first utility-scale renewable energy projects with a BESS component in Uzbekistan.

Next year, a 500 MW wind power project and battery energy storage system in the Kungrad district of Karakalpakstan, as well as the construction of a 300 MW solar photovoltaic power plant and a 75 MWh battery energy storage system in the Guzar district of the Kashkadarya region.

“This reflects ADB’s high level of interest in supporting the Government of Uzbekistan in the energy sector,” she noted.

Commenting on the increase in gas and electricity tariffs that came into effect on May 1, the ADB representative noted that these measures are aimed at the sustainability of the energy sector. The cost of electricity production exceeds the previously effective tariffs, and in these conditions, equalization is necessary, otherwise the burden will fall on the state budget, she believes.

“If this is not done, the Ministry of Finance or the country’s budget will have to continue subsidizing production. This may be temporarily effective, but it is unsustainable. We can support the government with technical assistance in the form of grants, facilitate the introduction of new technologies, and find ways to reduce losses. But at the same time, I believe that the increase in tariffs should correspond to the real cost of production ,” she noted.

ADB has been supporting energy sector reforms over the past several years and stands ready to provide technical assistance to improve energy efficiency, reduce losses, and introduce new technologies to ultimately reduce production costs.

The head of the ADB representative office noted that when carrying out tariff reform, it is important to provide mechanisms to protect low-income groups from energy poverty.

According to her, many international financial institutions, including the ADB and the International Monetary Fund (IMF), recommend the introduction of progressive tariffs: households with low consumption levels (and therefore, usually low incomes) pay a reduced rate for services, and when a certain consumption threshold is exceeded, a higher tariff is applied. This allows wealthier households to effectively subsidize the consumption of less wealthy ones, ensuring fairness.

Regarding plans to create a wholesale electricity and gas market, Lao-Araya said that the ADB is currently providing technical assistance and consulting the government in this area. “This is a long-term reform issue, and we are ready to participate in the discussion and preparation, although for now it is more of a consultative format,” she noted.

Nuclear power

Regarding nuclear energy , Lao-Arai said that the ADB does not finance investments in nuclear energy as part of its energy policy .

At the same time, ADB recognizes the role of nuclear energy in the low-carbon transition, given its ability to provide low-carbon baseload electricity, and will incorporate nuclear analysis into the development of long-term energy plans and climate strategies, as appropriate, she said.

However, ADB will not finance investments in nuclear power given the numerous barriers to its deployment, including proliferation risks, waste management, and safety issues, as well as the very high investment costs relative to ADB’s resources.

Food security

ADB President Masato Kanda announced at the bank’s annual meeting on May 4 that it would expand financial support for food security in Asia and the Pacific to $40 billion by 2030.

Lao-Araya notes that this area is also important for Uzbekistan, since, as the experience of the COVID-19 pandemic has shown, during periods of economic crisis, countries have to rely on their own production. She said that the Asian Development Bank will focus on strengthening food security in the country.

“In Uzbekistan, the government supports the private sector in investing in horticulture and agricultural diversification. In some regions of the country, especially in the Fergana Valley, it is possible to grow high-value products – fruits and vegetables. We support the government in investing in these areas and finding export markets to attract foreign currency. ADB will focus on food security, as this is a key area for horticulture production,” she said.

However, as ADB Country Director for Uzbekistan Kanokpan Lao-Araya noted, the landlocked country faces logistics and trade constraints. ADB intends to help the government improve these areas, including introducing water-saving technologies, establishing agricultural logistics and storage centers, which will increase the added value of perishable goods exports.

The bank will also provide support in bringing products into line with international standards in preparation for WTO accession.

Privatization

Commenting on the privatization program in Uzbekistan, the ADB representative emphasized that the bank has long been providing support for reforms, including in the banking sector.

“The Ministry of Economy and Finance has a master plan in this area. We help state banks strengthen their potential and ability to attract a strategic investor,” she said.

ADB provided a convertible loan to Uzpromstroibank (SQB) to support the attraction of a strategic investor.

“As for other state-owned enterprises, we will continue to support the government. The first thing is to ensure transparency so that investors can come and invest in this enterprise and make it more commercially sustainable,” Lao-Araya added.

ADB in Uzbekistan

Last year, the Asian Development Bank (ADB) adopted a new partnership strategy with Uzbekistan for the period 2024-2028.

ADB will provide assistance in implementing the initiatives outlined in the Uzbekistan 2030 strategy. Attention will be paid to the following areas:

  • sustainable economic growth;
  • reduction of the role of the state in the economy;
  • improving climate resilience and quality of life;
  • inclusive society and job creation;
  • combating gender, income and regional inequalities;
  • public administration reforms.

Over the past five years, ADB has committed more than $5.41 billion in financing to Uzbekistan. As of 31 December 2024, the bank had financed 267 public projects in the country through loans, grants, guarantees, and technical assistance totaling $13.4 billion. ADB’s current sovereign portfolio in Uzbekistan includes 34 loans, 1 grant, and 2 sovereign guarantees amounting to $4.88 billion.

https://www.gazeta.uz/ru/2025/05/06/kanokpan-lao-araya/