Uzbekistan’s Belt & Road Hydropower Plant Completed – Eurasian Opportunities Arriving For Phase Two Belt & Road In Operational Infrastructure Services & Investments

Op/Ed by Chris Devonshire-Ellis

Uzbekistan’s Energy Ministry has announced the completion of a three-year project to modernise the Kadyrinskaya Hydropower Plant. The work was carried out, with assistance from Chinese loans and contractors, on time and within budget.

Uzbekistan’s Deputy Energy Minister Sherzod Khodjaev said “The modernisation of the Kadyrinskaya HPP-3 plant is a great step forward in making effective use of Uzbekistan’s hydropower potential and forming a unified system for managing water and energy resources. Progress in Uzbekistan’s hydropower industry will increase energy efficiency and the contribution of renewable energy to the country’s energy balance.”

The modernisation of Kadyrinskaya HPP-3 was in cooperation with China’s Dongfang Electric International Corporation, the Chinese state-owned manufacturer of power generating equipment who provided the main hydraulic equipment, together with a team of Chinese specialists, according to Uzbekistan’s Energy Ministry. The project cost was US$27.6 million, and capital was provided through a US$9.8 million China Eximbank loan US$17.8 million from Uzbekistan’s own state funds.

Modernisation of the plant has increased its capacity from 13.23 MW to 15.34 MW and average annual power output to 124.4 million kWh.

The project to modernise Kadyrinskaya HPP-3 is one of several ongoing investment projects to both construct new hydropower plants and modernise existing ones. It is part of Uzbekistan’s ambitious national energy strategy seeking to generate a quarter of all electricity from renewable sources by 2030. The strategy aims for 3.8 GW of hydro energy, 5 GW of solar energy and up to 3 GW of wind energy.

The Uzbek ministry said the project, which began in December 2017, was completed on time despite the ongoing coronavirus pandemic. During the last months of the project, employees and contractors worked around the clock under special quarantine conditions.

China’s Belt & Road Initiative has seen numerous hydropower projects agreed across South-East and Central Asia. These are now coming to fruition and will allow participating countries to generate better quality power at lower costs, together with the operational revenues to repay Chinese and other loans.

As we pointed out in the article China’s Belt & Road Initiative Changes Focus many of the larger BRI projects are coming to fruition with the phase one capital expenditure completed. Instead, Chinese investors are now taking minority stakes in local operational projects, increasingly content to invest in dividend returns now the major infrastructure and construction build has been completed. The Uzbek Government now offers PPP equity deals for foreign investors in infrastructure projects and this is one angle international contractors should consider in terms of taking advantage of BRI build across the region.

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