ADB Approves $500 Million Loan For Turkmenistan’s Power Transmission Infrastructure

The Asian Development Bank (ADB) will lend $500 million to Turkmenistan, a central Asian country, to reinforce the country’s power transmission network, improve the reliability of its power supply, and increase electricity exports to neighboring countries.

ADB’s $500 million assistance will finance the construction of about 1,100 kilometers of new 110 kV, 220 kV, and 500 kV transmission lines in various areas in Turkmenistan and expand three existing substations. The project will also finance the construction of new substations, including 500 kV substations in Balkan and Dashoguz, as well as 220 kV substations in Ahal, Balkan, and Dashoguz.

The National Power Grid Strengthening Project, which is the first project by any international financial institution in the power sector in Turkmenistan, will cover four of the country’s five regions and help establish an interconnected national transmission grid to improve reliability and energy efficiency of the network. It will also boost Turkmenistan’s capacity to trade electricity with Kazakhstan, the Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan, and increase the volume of current electricity exports to Afghanistan.

The National Power Grid Strengthening Project will also improve project and financial management capacity of Turkmenenergo, the power utility of Turkmenistan, particularly in incorporating good practices on evaluation, investment decision-making, as well as higher safeguard requirements. A $1.5 million technical assistance from the Japan Fund for Poverty Reduction, financed by the Government of Japan, to improve energy efficiency and capacity will be administered by ADB. The total cost of the project, which is expected to be completed by the end of 2023, is $675 million, with Turkmenenergo contributing $175 million.

The government’s plan is to achieve strong and sustainable economic growth on the basis of efficient integration of the country in the world economy, with maximum diversification of its export potential. To meet its strategic objectives, it is essential that a robust, reliable, and efficient power transmission network is in place.

ADB is committed to helping developing countries battle climate change and go for sustainable development. In September 2018, Ministry of Finance and Mass Media in Sri Lanka entered into an agreement with the ADB wherein the bank stated that it will loan the country $50 million to help develop rooftop solar projects.

In February 2018, ADB agreed to provide a $235 million loan to B. Grimm Power Public Company Limited for the expansion of renewable energy projects in the member countries of the Association of Southeast Asian Nations (ASEAN).

Image credit: ADB