28 June 2022

World Bank Invests 143 Million USD to Improve Energy Efficiency in Public Buildings in Uzbekistan

The Board of Executive Directors of the World Bank approved a $143 million concessional loan for Uzbekistan. The funds will be used by the government of the country to finance a project to improve the energy efficiency of public buildings and develop the institutional and regulatory framework to attract investment in clean energy in the building sector.

Concessional financing is provided to the Government of Uzbekistan by the International Development Association (IDA), which is part of the World Bank Group, at a low interest rate, with a maturity of 30 years, including a five-year grace period.

In Uzbekistan, the buildings sector accounts for 50% of total final energy consumption, followed by industry (22%) and transport (20%). Thus, heating accounts for about 70% of all energy consumption in district hospitals, 84% in preschool institutions, 88% in rural clinics and 97% in schools.

Most public buildings were built in the 1970s and 1980s with little regard for energy efficiency aspects. These facilities have poor thermal insulation and do not meet the standards of thermal comfort. They use old boilers and water heating systems with a high level of energy consumption.

A 2021 study by the World Bank found that over 7,000 gigawatt-hours (GWh) of which are about 6,810 GWh in the form of heat or more per year, through energy efficiency improvements in preschool, school, and healthcare facilities. 240 GWh in the form of electricity.

“The new project funded by the World Bank will help improve the energy efficiency of public buildings across the country. It will help the buildings sector improve its preparedness for a changing climate, reduce energy consumption and reduce greenhouse gas emissions into the atmosphere,” said Marco Mantovanelli, World Bank Country Manager for Uzbekistan. “This is one of those projects that will be implemented as part of the recently adopted World Bank-Country Partnership Program for 2022-2026. Among its priorities is assistance to Uzbekistan in the transition to environmentally sustainable growth of the national economy.”

The project will be implemented by the Ministry of Energy of Uzbekistan and its Extrabudgetary Intersectoral Fund for Energy Saving (IFE). The fund was established in 2020 to attract investments and finance energy efficiency projects in the economic, social and residential sectors.

Under the project, the MFE will finance energy efficiency activities in the institutions of the ministries of pre-school education, public education and health, located in rural areas and cities throughout the country.

MFE will provide services to assess the energy performance of buildings, develop measures, procure and finance the necessary upgrades from relevant institutions, and measure and verify their energy savings.

Measures to improve the energy efficiency of the above public buildings will include improving their thermal insulation and heating, ventilation, air conditioning and lighting systems. In addition, coal-fired boilers will be replaced in relevant institutions with heating and water heating systems based on renewable energy sources. For example, by installing solar panels integrated with heat pumps and solar collectors.

Public buildings covered by the project will be upgraded to meet national thermal comfort standards to avoid underheating or overheating. Project activities will reduce energy consumption, improve air quality, the reliability of energy supply to relevant institutions, especially during the winter months, as well as the provision of public services by improving the thermal comfort for students of preschool and school institutions, hospital patients, as well as employees of these institutions.

The project will improve the MFE’s ability to invest in clean energy activities in various sectors. It will assist in the launch of the national program “Improving the Energy Efficiency of Social, Commercial and Administrative Buildings and Structures” and the development of legislation to regulate the clean energy investment market. In addition, within the framework of the project, an information and educational campaign will be carried out among the population to increase citizens’ awareness of energy efficiency issues.

The World Bank program in Uzbekistan is one of the largest in Eastern Europe and Central Asia. It consists of 29 projects with financial commitments totaling $5.4 billion. They support the implementation of government plans in various sectors. For example, in the areas of important macroeconomic reforms, agricultural modernization, water management, water supply and sanitation, energyefficiency, transport, healthcare, education, social protection of the population, development of urban and rural infrastructure, innovation, reform of the tax and statistical systems. The World Bank is also helping governments mitigate the effects of the COVID-19 pandemic on the economy, public health, and well-being.