An ADB Loan to Uzbekistan Aims to Transform the Nation’s Electricity Sector

On November 10, 2020 the Asian Development Bank (ADB) approved a USD 200 million Policy Based Loan (PBL) to the country of Uzbekistan. The PBL can be used for general government budget support, but the loan is based on key policy updates that target the electricity sector, especially the distribution networks in the country.  I was honored to provide support to the program by conducting the economic and financial analyses for the loan and policy reforms.
​
Policy-based lending has been a practice of the ADB since 1978 but has seen most of its growth since the Global Financial Crisis of 2009. A country’s primary motivations for seeking PBL are to achieve a quick response to immediate financing needs and for valuable policy advice / technical assistance for a particular sector’s growth. In Uzbekistan, the program provided critical budget support and targeted policy actions aimed at restructuring the power sector to enable competition and create a conducive environment for private investment. Specifically, the reforms target the following areas: 1) power sector restructuring and strengthened regulation; 2) financial sustainability for sector entities; 3) decarbonizing the sector; and 4) improving demand side energy efficiency. Economic benefits include: 1) loss savings, 2) carbon savings, and 3) demand side efficiencies.

The following summarizes the analysis [1]...

Read More