WB allocates $200 million to improve energy efficiency of Uzbek enterprises
By Kamila Aliyeva
The World Bank (WB) has allocated $200 million to increase the energy efficiency of industrial enterprises in Uzbekistan.
The economy of Uzbekistan is one of the most energy-intensive in the world, according to the WB.
For example, the energy intensity of the country's GDP is 35 percent larger than in neighboring Kazakhstan, and three times more than in Germany.
The industrial sector, which often uses obsolete technologies in the production process, accounts for about 40 percent of all energy consumed in the country.
The government of Uzbekistan aims to reduce the energy intensity of the economy by about 50 percent till 2030. To this end, state programs aimed at modernizing key energy-intensive sectors of the economy are being initiated.
“The modernization of obsolete equipment and production processes is critical to improving the competitiveness of enterprises. Energy efficiency helps to reduce the cost of operating and maintaining equipment, increasing productivity, and saving money by using less energy. It will also contribute to mitigating the effects of climate change,” World Bank Country Manager for Uzbekistan Hideki Mori said.
Small and medium enterprises of Uzbekistan, which are mainly concentrated in the private sector, are an important factor in the growth of industry. Their share in industrial production increased from 12.9 percent in 2000 to 45.3 percent in 2016. At the same time, as a rule, they have less obsolete production capacities.
However, SMEs working in energy-intensive sectors, such as the production of building materials, textiles and foodstuffs, must modernize the production process which consumes excessive amounts of energy. This will help improve their competitiveness.
The first two phases of the project “Enhancing the Energy Efficiency of Industrial Enterprises” approved in 2010 and 2013 facilitated the introduction of special credit lines from local banks participating in the projects.
As a result, under the World Bank's financing, 31 large state-owned industrial enterprises, mainly in the oil and gas, chemical and construction sectors, received loans totaling $125 million to introduce modern energy-saving technologies into the production process.
As of the end of 2017, these investments contributed to savings of the equivalent of 358 gigawatt hours of energy and a reduction in emissions in the amount of 583,000 tons of carbon dioxide per year.
The third phase of the project will provide additional funding for large industrial enterprises and SMEs to invest in energy-saving technologies, as well as increase their energy efficiency potential through targeted technical assistance. It is expected that investments in this phase will help to save 386 gigawatt hours of energy and reduce emissions to 799,000 tons of carbon dioxide per year.
Currently, the World Bank supports the implementation of 16 projects worth about $1 billion, covering such priority areas for country development as agriculture and water management, energy, transport, health, education, urban development, water supply and sanitation. Uzbekistan became a WB member in 1992.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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