Masdar achieves financial close on 500MW Uzbek wind project

Zarafshan wind farm will be the largest renewables project in Central Asia and will provide enough electricity to power 500,000 homes

Masdar, the global renewable energy company, has announced that it has achieved financial close on the 500-megawatt (MW) Zarafshan wind project – the first utility-scale wind farm in Uzbekistan.

Renewable energy projects in Central Asia

In a statement, Masdar said that it had entered into bilateral agreements with the Government of Uzbekistan in 2020 to develop, build and operate the Zarafshan wind farm, the largest renewables project in Central Asia. 

The project is expected to attract foreign direct investment of more than US$600m and is part of Uzbekistan’s effort to meet 25% of its electricity needs from renewable sources by the end of the decade. 

The Zarafshan wind farm is Masdar’s second utility-scale project in Uzbekistan, with the 100 MW Nur Navoi Solar Project – the country’s first successfully-financed independent power producer (IPP) solar project – starting operations last year. The company has also signed agreements last year to develop additional photovoltaic (PV) power projects in Uzbekistan with a combined capacity of 890 MW. The projects will be located in the Samarkand, Jizzakh and Sherabad regions of Uzbekistan.

The 500 MW wind farm is expected to begin commercial operation by the end of 2024. It will provide enough electricity to power 500,000 homes, while displacing 1.1m tonnes of carbon dioxide per year. Masdar signed the Power Purchase Agreement (PPA) and Investment Agreement for the Zarafshan wind farm with the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan and JSC National Electric Grid of Uzbekistan in June 2020.

Uzbekistan’s renewable energy goals and wind farms

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said, “Today we are celebrating reaching a significant milestone in this landmark project, one that takes Uzbekistan a step closer to achieving its ambitious renewable energy goals. Uzbekistan is a key strategic investment destination for Masdar, and we look forward to continuing to develop and grow our strong portfolio of projects in the nation. 

“This achievement would also not have been possible without the support of our anchor lenders, the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the Asian Development Bank (ADB), and Japan International Cooperation Agency (JICA), to whom we owe many thanks. We are also especially grateful to Etihad Credit Insurance (ECI), whose participation facilitates the diversification of the foreign capital mix being invested into Uzbekistan, both from within the UAE and elsewhere.”  

Alongside the anchor lenders for the Zarafshan project, the Dutch Entrepreneurial Development Bank, FMO, is acting as B lender, while Etihad Credit Insurance, Natixis and First Abu Dhabi Bank (FAB), are providing credit-insured lending for the project.

Sir Massimo Falcioni, Chief Executive Officer of Etihad Credit Insurance, said “We are honoured and truly delighted to support the Republic of Uzbekistan in reaching its clean-energy objectives, by providing to the UAE renewable energy champion Masdar the requested credit insurance facility to develop this landmark project for 500-megawatt wind farm in Zarafshan, the largest renewables project in Central Asia. 

“With this successful financial closing, Masdar confirms to be one of the fastest-growing renewable energy companies in the world. This milestone project financial closing comes just few weeks after His Excellency Mohammed Al Gergawi, Minister of Cabinet Affairs, lead a UAE delegation to Tashkent to sign an extension to the partnership with Uzbekistan, including other areas of strategic partnership like financial sector; education; economy; government leadership; food security and agriculture, and ports and customs,” he concluded.

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