Energy Ministry of Uzbekistan signs three agreements worth up to $2bn with Saudi Arabian ACWA Power

The Energy Ministry of Uzbekistan has signed three new strategic agreements worth around $2 billion with the Saudi Arabian utility developer ACWA Power to amplify power generation and develop technical expertise, follows from the ministry’s press release.

The agreements include:

- a 25-year Power Purchase Agreement (PPA) and Investment Agreement – with a total investment value of $1.2 billion - for the development/construction/operation of a 1500 MW Combined Cycle Gas-Turbine (CCGT) power plant;

- an Implementation Agreement worth $550 million-$1.1 billion for the building of a wind power plant with a capacity of 500-1000 MW of clean energy;

- a Memorandum of Understanding (MoU) for the development of a training center to enhance the technical skills of Uzbek students.

As Uzbekistan tracks its ambitious energy diversification strategy, the 1500 MW CCGT power plant is set to contribute materially. The plant will be located in the city of Shirin, Syrdarya region, and will be developed under the “Build, Own, Operate, Transfer” model. ACWA Power will take the lead in constructing, engineering, operating and maintaining the plant. 

Signed with the Ministry of Investments and Foreign Trade of Uzbekistan, and with an estimated aggregate worth of $1.2 billion, the PPA has a 25-year duration, with JSC National Electric Grids of Uzbekistan acting as the sole off-taker. The CCGT plant’s efficiency rate will be in excess of 60% - saving almost twice the natural gas currently used for electricity production. 

An implementation agreement worth $550 million-$1.1 billion has also been signed with the Ministry of Energy to utilize Uzbekistan’s natural renewable energy sources. ACWA Power will leverage the country’s wind power to generate 500-1000 MW of energy.

The third agreement is an MoU between the Ministry of Energy of Uzbekistan, Air Products & Chemicals and ACWA Power. This agreement entails training programs to bolster the technical expertise of students at one or more colleges in Uzbekistan. It will equip potential talent with the tools and knowledge to gradually support a local supply chain for the utilities and chemicals sectors in the country. 

The agreements reflect Uzbekistan’s growing role in the global energy market, its commitment to energy security and the use of the very latest technologies. It also demonstrates that Uzbekistan is becoming an attractive destination for foreign investors.

Speaking about the reason why Uzbekistan has chosen ACWA Power as its partner in upscaling the country’s energy generation capacity, Prime Minister Abdulla Aripov said that the company has an exceptional track record in delivering results.

“Our collaboration with ACWA Power will enable the government to benefit from strong private sector participation which we believe is vital for Uzbekistan’s ongoing transformation and growth. We look forward to working with ACWA Power and building on this partnership in the future.”

Alisher Sultanov, Minister of Energy, noted that these newly agreed power projects represents a historic milestone for Uzbekistan and supports the republic’s mission to strengthen energy security through self-sufficient power sources. “ACWA Power’s focus on smart, energy-efficient technologies will provide more than 2000 MW of added power and enable us to achieve a more sustainable, secure and affordable energy ecosystem for our country.”

In turn, Mohammad Abunayyan, Chairman of ACWA Power, stated that the company is on a dynamic growth path and its priority has been to expand and extend the geographic footprint in Central Asia.

“The market has an economically vibrant landscape that favors private investment and power sector fortification and this is where we can make a great contribution. ACWA Power has an impressive track record in helping emerging markets and communities drive progress by providing access to affordable electricity. We are honored to have been given the opportunity to utilize our energy expertise to unlock the tremendous growth potential of Uzbekistan’s power sector,” Mohammad Abunayyan said.

“Our partnership will create new opportunities for national and community development and help build a sustainable future for all the people of this great country,” Chairman of ACWA Power added.