Uzbekistan: Power Generation Efficiency Improvement Project / Asian Development Bank
1. The project will construct two units of 450 MW energy efficient combined cycle gas turbines at the Talimarjan Thermal Power Plant located in Kashkadarya region, contributing to energy saving, greenhouse gas emission reduction, and reliable power supply in Uzbekistan. The project will build on the experience gained through Talimarjan Power Project (phase 1 project) by further improving the corporate governance and promoting commercialization of the energy sector.
Project Name : Power Generation Efficiency Improvement Project
Project Number : 49253-003
Country : Uzbekistan
Project Status : Approved
Project Type / Modality of AssistanceLoan Technical Assistance
Source of Funding / Amount
Loan 3621-UZB: Power Generation Efficiency Improvement Project
Ordinary capital resources US$ 450.00 million
Loan: Power Generation Efficiency Improvement Project
Uzbekistan Fund for Reconstruction and Development US$ 400.00 million
TA 9459-UZB: Power Sector Reform and Sustainability Support Program
Japan Fund for Poverty ReductionUS$ 2.00 million
Strategic AgendasEnvironmentally sustainable growth Inclusive economic growth
Drivers of ChangeGender Equity and Mainstreaming Governance and capacity development Partnerships
Sector / Subsector
Energy / Energy efficiency and conservation - Energy sector development and institutional reform
Gender Equity and MainstreamingSome gender elements
Description1. The project will construct two units of 450 MW energy efficient combined cycle gas turbines at the Talimarjan Thermal Power Plant located in Kashkadarya region, contributing to energy saving, greenhouse gas emission reduction, and reliable power supply in Uzbekistan. The project will build on the experience gained through Talimarjan Power Project (phase 1 project) by further improving the corporate governance and promoting commercialization of the energy sector.
Project Rationale and Linkage to Country/Regional Strategy
2. Uzbekistan economy has experienced growth averaging 8% per annum in 2011 -2015. Medium-term growth prospect beyond 2016 remains above 6.5%. The government embraces an ambitious investment plan and industrialization strategy, and the power demand is expected to rise. However, the power supply has grown at less than 2% on average for 2011- 2015. More than 75% of power generation units are 30 years or older with limited availability and low efficiency. Power shortage and high energy intensity may soon become a critical bottleneck for national welfare and economic growth.
3. While diversifying the energy sources with renewable energy, the government's strategy is to modernize the power generation infrastructure that is energy efficient with high availability to ensure reliable power supply at an affordable cost. Thermal power plants contribute 85% of the total power generation, with 11,500 MW installed capacity. However, only 470 MW uses combined cycle gas turbine (CCGT) technology, a modern efficient power unit with thermal efficiency of above 50% --the average efficiency of existing plants is only 32.6%. The government plans to install additional ten CCGT projects with 7,000 MW capacity in the next five years, including this proposed project.
4. ADB has been the leading international financial institution in supporting the adoption of energy efficient CCGT in Uzbekistan. The implementation of the Talimarjan Power Project is satisfactory with 82% completed (as of February 2016); its substantial completion is expected by the end of 2016. The Takhiatash Power Plant Efficiency Improvement Project bidding concluded and contract awarded. The key successful factors identified for project implementation include: (i) the ownership and the capacity of the project executing agency; (ii) appropriate guidance and close supervision by ADB; and (iii) close cooperation among the project executing agency, consultant, and ADB with shared common objectives. These lessons will be incorporated in the preparation and implementation of this proposed project.
5. Sector reforms are under way in the energy sector. The government has passed a decree to encourage foreign investment and foreign managers in the state-owned enterprises. It has also introduced key performance indicators to ensure accountability and financial performance. Uzbekenergo has adopted auditing based on the International Standards on Auditing, and financial statements compliance with the International Financial Reporting Standards, as an effort to improve transparency and financial management. Tariff analysis is under way jointly by the government, the World Bank, and ADB. Further, restructuring is ongoing for project management units (PMU) to increase PMU capacity and knowledge retention. However, further support is required for improving corporate governance, financial management, and sector commercialization for private sector participation.
6. The proposed project follows ADB''s strategy for Uzbekistan, which includes a focus on energy efficiency and reliable power supply. The government requested for stand-alone sovereign lending for the proposed project considering that it is a strategic public asset that is best implemented through a turnkey contract.
ImpactReliable energy supply increased and energy intensity reduced
Description of Outcome Efficiency and reliability of clean power supply improved
Progress Toward Outcome
Description of Project Outputs
Talimarjan TPP capacity increased
Uzbekenergo financial operation and performance improved
Institutional capacity enhanced
Status of Implementation Progress (Outputs, Activities, and Issues)
Summary of Environmental and Social Aspects
Environmental AspectsIt is a large scale gas-fired thermal power plant although it adopts energy efficient combined cycle gas turbine technology. An environmental impact assessment will be conducted to abide by ADB's Safeguard Policy Statement (SPS) (2009).
Involuntary ResettlementBased on the EA/IA's preliminary information, the power plant will be constructed within the territory of the existing Talimarjan TPP and there is no need for any land acquisition. As a part of project preparation due diligence, the project team will reconfirm if there is any land acquisition and/or involuntary resettlement, and if there is, appropriate measures will be discussed and agreed with the EA/IA.
Indigenous PeoplesThe project is about constructing two units of 450 MW energy efficient combined cycle gas turbines within the existing Talimarjan Thermal Power Plant. The project area does not have IP communities as described in the SPS for operational purposes.
Stakeholder Communication, Participation, and Consultation
During Project Design
As a part of the preparation of environmental impact assessment, at least two stakeholder consultations will be conducted by the project implementation agency with the assistance of project preparatory technical assistance consultant.
In addition, as a part of rapid poverty and social assessment, PPTA consultant will organize Focus Group discussions (FGD) and structured interviews in Nuristan town.
During Project ImplementationTo be confirmed during the project design.
Project Implementation Consultant will be engaged to support Uzbekenergo and Talimarjan TPP during project implementation with an estimated 462 person-months input. Quality- and cost-based selection (QCBS) method will be the default method for recruiting consulting firms with a standard quality: cost ratio of 80:20. All consultants will be recruited according to ADB Procurement Policy (2017, as amended
from time to time) and Procurement Regulations for ADB Borrowers (footnote 23 and 24).
A turnkey contractor will be engaged to construct the CCGT units in Talimarjan Thermal Power Plant. The procurement will follow international competitive bidding procedures using ADB's two-stage bidding method without pre-qualification. ADB's standard bidding documents for Plant: Design, Supply and Install will be used. All procurement of goods, and works will be undertaken in accordance with ADB
Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB
Borrowers (footnote 23 and 24).
Responsible ADB OfficerKim, Seung Duck
Responsible ADB DepartmentCentral and West Asia Department
Responsible ADB Division Energy Division, CWRD
UzbekEnergo 6 Istiklol Street Tashkent, 100000, Uzbekistan
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