WASHINGTON, June 25, 2025 – The World Bank has approved a $150 million concessional credit to support Uzbekistan in implementing a new project aimed at developing its potential in the small hydropower (SHP) sector and strengthening electricity supply across the country. The project will be implemented with private sector participation, involving local small hydropower developers (SHDs) and banks.
Uzbekistan’s electricity demand is projected to double by 2030, exceeding 120 billion kilowatt-hours. Despite growth in electricity production, around 10 percent of demand remains unmet, resulting in power outages, particularly in underserved regions and rural areas, due to transmission and distribution challenges.
Small hydropower plants (SHPPs), with capacities ranging from 100 kW to 5 MW and operating on existing irrigation canals, can enhance distributed electricity generation in underserved areas, offering a practical solution to improve supply reliability and support regional development.
SHPPs are cost-efficient and require minimal maintenance. They leverage Uzbekistan’s existing irrigation canal network to tap into water resources, making SHPPs an attractive opportunity for private investors interested in small-scale renewable energy.
“The Government of Uzbekistan plans to establish nearly 3,000 SHPPs, increasing installed capacity to 160 MW by 2026 and providing electricity to an additional 280,000 people,” said Tatiana Proskuryakova, World Bank Director for Central Asia. “The new World Bank-funded project, to be implemented by the Ministry of Energy between 2025 and 2030, will support this goal by providing local developers with access to finance for launching new SHPPs, delivered through local banks. The project will also help mobilize around $38 million in commercial financing to expand hydropower infrastructure nationwide.”
By 2030, the project will support investments in SHPPs with a total installed capacity of up to 150 MW and is expected to generate over 520 gigawatt-hours of green energy annually. In addition, the project will help reduce greenhouse gas emissions by up to 430,000 tons of CO₂.
To date, around 270 suitable sites for SHPP construction have been preliminarily identified along existing irrigation canals. The majority of these sites (93 percent) have capacities between 100 kW and 1,000 kW.
The electricity generated by project-financed SHPPs will be purchased by JSC Regional Electric Power Networks, providing a reliable renewable energy source that diversifies the power mix and improves the energy supply to households and businesses in the country’s underserved regions and rural areas.
The project also has the potential to stimulate job creation and production in relevant industries and small and medium enterprises (SMEs), boost local economic activity, and contribute to broader regional development.
