$500m loan first step in Turkmenistan’s bid to become Central Asian ‘power house’

12 Nov 18

The Asian Development Bank has approved a $500m loan to improve electricity supply in Turkmenistan.

The money will help the Central Asian country improve the reliability of its power supply and increase electricity exports to neighbouring countries.

“Turkmenistan has significant potential for increased electricity exports to neighbouring countries, which can help propel its economic growth and development prospects,” said Ashok Bhargava, energy division director of ADB's Central and West Asia department.

Turkmenistan is the least populated country in Central Asia with about 5.7 million people. It is also one of the most energy-rich countries in the world, particularly for fossil fuels.

It is the 12th largest natural gas producer in the world and the 10th largest oil producer in Asia and the Pacific.

The loan will support the Turkmenistan National Power Grid Strengthening Project, which it hopes will help achieve robust economic growth. It is the first project in the country's power sector by an international financial institution.

The project will help establish a more connected national transmission grid to improve the reliability and energy efficiency of the network, and boost the country’s ability to trade electricity with Kazakhstan, the Kyrgyz Republic, Pakistan, Tajikistan and Uzbekistan. It will also help increase the volume of current electricity exports to Afghanistan.  

ADB's principal energy specialist for Central and West Asia, Sohail Hasnie, said the assistance will ensure that the country has a “strong backbone of power transmission infrastructure”, technical knowledge and processes aligned with “international best practices” to support the expansion of electricity exports.

“A modern and strengthened network is the necessary first step for Turkmenistan to become a power house for Central Asia,” he said.

The Japan Fund for Poverty Reduction, financed by the government of Japan, is also providing a $1.5m grant for technical assistance to improve energy efficiency and skills, which will be administered by ADB.

The total cost of the project, which is expected to be completed by the end of 2023, is $675m, with Turkmenenergo, the state electric energy corporation, contributing $175m.

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