Saudi firm signs milestone deals with Uzbekistan

Business Bureau, Gulf Today

ACWA Power announces the signing of three new strategic agreements, potentially worth up to $2.5 billion, with The Ministry of Energy of Uzbekistan to amplify power generation and develop technical expertise.

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 wind power plants with a capacity of 500-1000 MW and a Memorandum of Understanding (MoU) for the development of a training centre to enhance technical skills of Uzbek students and professionals. The 1500 MW CCGT power plant shall contribute to Uzbekistan’s fast track ambitious plan to attract foreign direct investment in essential key sectors and the implementation of its energy diversification strategy. The project will be located in Shirin City in the Sirdarya region and will be developed as a ‘Build, Own, Operate, Transfer’ projects. ACWA Power will take the lead in constructing, engineering, operating and maintaining the plant.

The project has 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 per cent, saving almost twice the natural gas currently used for electricity production. The Investment Agreement for this project is signed with the Ministry of Investment and Foreign Trade.

An implementation agreement worth $550 million-$1.1 billion has also been signed with the Ministry of Energy to utilise Uzbekistan’s natural renewable energy sources. The agreement envisages the development, financing, construction, operation and maintenance of a 500-1000 MW wind farm.

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 and professionals 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 Uzbekistan.

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

Prime Minister of Uzbekistan, Abdulla Aripov, said, “With infrastructure development key to our economic progress, we want the best international expertise to support our ambitious energy goals. We have chosen ACWA Power to be the government’s partner in upscaling Uzbekistan’s energy generation capacity because of their exceptional track record in delivering results.

“Our collaboration with ACWA Power will enable the government to benefit from the 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”, Aripov elaborated.  Alisher Sultanov, Minister of Energy of Uzbekistan said, “These newly agreed power projects represent a historic milestone for Uzbekistan and support our 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.”