Japan to provide Uzbekistan nearly $230 million for energy-efficiency projects

Japan is extending significant financial support to Uzbekistan for energy-efficiency initiatives, providing two loans totaling approximately $230 million (36.8 billion yen).

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Japan will provide Uzbekistan with two loans totaling 36.8 billion yen (about $229.4 million) to support energy-efficiency projects in the public and industrial sectors.

The funding is earmarked for two key sectors: public buildings and industry. Up to $136 million will be used to improve energy efficiency in schools, healthcare facilities, and other public structures by introducing modern, energy-saving equipment. An additional $93.4 million will support businesses and entrepreneurs investing in energy-saving technologies through long-term, low-interest financing.

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The funding will be used to introduce energy-saving equipment and modern technologies in schools, healthcare facilities and other public buildings.

Both loans feature a 25-year repayment period, including a seven-year grace period, with a 2.4% interest rate. Consulting services are financed at 0.8%. Notably, procurement will be untied, allowing for global bidding on contracts.

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The funds will support businesses and entrepreneurs investing in energy-saving technologies through long-term, low-interest financing.

Uzbekistan faces significant challenges with energy consumption and greenhouse gas emissions, which are considerably higher than global averages, largely due to its heavy reliance on fossil fuels. These Japanese-funded projects align with the "Green Development and Resilience" pillar of the Tokyo Declaration, adopted at the first Central Asia + Japan Dialogue Summit, aiming to modernize infrastructure and promote sustainable practices.

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Uzbekistan remains heavily dependent on fossil fuels, particularly natural gas. The country’s energy consumption and greenhouse gas emissions per unit of GDP are also significantly higher than global averages, making energy conservation an urgent priority.