Tashkent, Uzbekistan (UzDaily.com) — The World Bank has approved a concessional loan of US$150 million to support a large-scale project in Uzbekistan aimed at developing the small hydropower sector and improving the reliability of electricity supply across the country. The initiative will be implemented in partnership with the private sector, including local small hydropower developers and financial institutions.

By 2030, electricity demand in Uzbekistan is expected to double and exceed 120 billion kilowatt-hours. Despite increasing generation capacity, around 10% of electricity demand remains unmet, with rural and energy-deficient regions being the most affected. The core issues stem from outdated electricity transmission and distribution infrastructure.

Small hydropower plants (SHPs) with capacities ranging from 100 kW to 5 MW, utilizing existing irrigation infrastructure, are seen as an effective solution to bridge the energy gap. These SHPs will help provide more stable electricity to households and businesses, spurring regional development in the process.

The project, led by Uzbekistan’s Ministry of Energy with World Bank financial backing, will run from 2025 to 2030. Its aim is to foster an investment-friendly environment for private-sector participation in small hydropower and to provide necessary financing through local banks. The project is expected to mobilize an additional US$38 million in private investment.

Plans envision the construction of around 3,000 SHPs by 2026, with a total installed capacity of up to 160 MW — enough to supply electricity to approximately 280,000 people. By 2030, up to 150 MW of new capacity is expected to be financed, generating over 520 GWh of green energy annually. The project is also projected to cut carbon dioxide emissions by 430,000 tons per year.

Currently, 270 potential sites have been preliminarily identified for SHP deployment. Most of these (93%) are expected to have capacities between 100 and 1,000 kW. The electricity generated will be purchased by the state-owned “Regional Electric Networks” JSC and integrated into the national energy grid.

The project has strong energy, social, and economic potential. It will create new jobs, stimulate small and medium-sized businesses, boost local production, and enhance the resilience of the energy sector. Furthermore, it will support Uzbekistan’s transition toward a clean and inclusive economy.