Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Heavy dependence on natural gas. 
Excessive use of natural gas poses a 
problem for load management. Most of the gas-fired plants are designed 
as baseload generation and their efficiency is compromised when used for 
meeting the peak load. Uzbekistan may diversify power sources by promoting 
renewable energy (such as wind) and trading with other countries, but this has 
not progressed very far (World Bank 2013). 
12
The exchange rate of $1/SUM3,065 was used for conversion. 

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70
Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
Table 2.
17: U
zbek
ener
go
’s P
rojected F
inancial P
erf
ormanc
e, 2017–20
26
 
2017
2018
2019
20
20
20
21
20
22
20
23
202
4
20
25
20
26
Tot
al r
ev
enue
5,909
7,489
8,002
8,550
9,536
11,950
12,747
13,598
14,506
15,477
Cost o
f goods sold
–5,918
–6,848
–7,718
–7,718
–8,518
–9,603
–10,277
–10,965
–11,652
–12,310
Other OPEX
–1,031
–1,273
–1,454
–1,454
–1,621
–2,031
–2,167
–2,312
–2,466
–2,631
EBIT
–1,041
–632
–614
–621
–603
316
302
321
388
535
Financ
e expense
–300
–228
–310
–300
–287
–369
–867
–905
–991
–986
Ex
change r
at
e
Lo
ss
–8,272
–1,089
–1,139
–1,368
–1,699
–1,948
–2,462
–2,773
–3,005
–2,981
Pr
ofit f
or the y
ear
–9,613
–1,949
–2,063
–2,289
–2,588
–2,001
–3,028
–3,357
–3,608
–3,431
EBIT = earnings bef
or
e in
ter
est and t
ax
es
, OPEX = oper
ating expense.
N
ot
e: P
rojections adopt
ed c
onserv
ativ
e as
sumptions o
f r
eal incr
ease o
f end-user t
ariff a
t 4
.4% and fuel pric
e a
t 4
.3% tha
t ar
e estima
ted based on hist
oric
al tr
ends in t
ariff adjustmen
ts 
from 2010 t
o 2017
.
Sour
ce: ADB (2017a).

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71
Infrastructure as a Foundation for Job Creation
So far, the government’s approach to the challenge has been to convert 
natural-gas-fired power plants to coal and develop renewable energy. The 
government intends to convert seven units (five units have been converted) 
of the Novo–Angren power plant to run on coal. While this is less costly than 
building a new plant, conversion lowers the power plants’ efficiency. 
The government is considering increasing the share of hydropower in the 
power mix to 15.8% in 2025. The government’s push for developing renewable 
energy also targets solar energy to account for 2.3% and wind energy to account 
for 1.6% of the country’s power by 2025 (Yeniseyev 2017). Uzbekistan’s 
hydroelectric potential is about 21.09 TWh, of which only 6.27 TWh are being 
harnessed. About 90% of the canals and rivers are used for irrigation purposes, 
which makes the introduction of hydropower generation challenging. 
The tender of the first 100 MW solar PV station in Samarkand is completed, 
and construction started in 2017. Presently, there is only one solar PV station, 
in Namangan Province, which can produce 500 kWh to 600 KWh of electricity 
a year (
UzDaily
2015). Technical assessment of the second 100 MW Sherobod 
solar PV station is under way, with plans to construct five 100 MW solar plants 
in the country by 2021. Total investments for the plan are expected to reach 
$1.1 billion (Bellini 2017). 
2.3 Policy recommendations
Power, road, and rail infrastructure share common challenges. The following 
recommendations flow from the foregoing analysis:
(i)