Saudi Arabia's Acwa Power has signed an agreement to develop two solar plants in Uzbekistan with a total generation capacity of 1.4 gigawatts, in a boost to the Central Asian nation's sustainable energy plans.
The project is part of a wider investment agreement between Riyadh-based Acwa and Uzbekistan's Ministry of Energy, which is worth $2.5 billion, Reuters reported on Saturday, quoting a statement from the ministry.
Three power storage systems will be built in Tashkent, Samarkand and Bukhara, with a total combined capacity of 1.2GW, it said.
A power plant will generate 400MW, with a storage facility of the same capacity in Tashkent.
In Samarkand, there will be another plant with a generating capacity of 1GW, alongside a storage facility with 400MW.
Bukhara will host a storage facility with a capacity 400MW, but no power generation plant.
Under the deal, Uzbekistan will purchase power from those facilities, Acwa said.
Uzbekistan is working to improve its energy and power generation sectors, harnessing its natural resources and seeking investments from overseas.
In 2019, the Central Asian nation embarked on a multi-phase transition from a state-owned and subsidised energy sector to a competitive gas, oil and electricity market with significant private sector participation.
The move is expected to provide huge economic benefits, according to the International Energy Agency.
Uzbekistan also unveiled plans to raise the share of renewable energy in total electricity supply to 25 per cent by 2030, from 10 per cent in 2020.
The country has also received investments from the UAE. In September, Mubadala Investment Company and Abu Dhabi National Energy Company signed agreements to invest in the privatisation of two gas-fired power plants in Uzbekistan.
Mubadala and Taqa will each acquire a 40 per cent stake in the power stations with a combined capacity of 1.6 gigawatts, and take over the associated operations and maintenance activities, the Abu Dhabi entities said.
Riyadh-based Acwa has been an active investor in Uzbekistan's energy industry as it continues to expand its global portfolio.
In August, it signed agreements worth $12 billion to develop three new energy projects in Uzbekistan, including developing the largest single onshore wind project in the world in the Karakalpakstan region with a total capacity of 1.5 gigawatts.
An additional $10 billion investment co-operation agreement was also signed to jointly develop gas-to-power, renewable energy and green hydrogen projects in Uzbekistan.
In December, Acwa signed a power purchase agreement with the National Electric Grid of Uzbekistan for three wind power special purpose vehicles to develop the country's $2.4 billion Kungrad wind farm.
The farm, located in the north-western Karakalpakstan region of Uzbekistan, is expected to offset 2.4 million tonnes of carbon emissions per year and power 1.65 million homes when the project is completed, Acwa said.
Acwa on Thursday reported that its net profit for 2022 more than doubled on higher operating income as well as lower impairment charges.
Net profit attributable to equity holders after zakat and tax reached 1.54 billion Saudi riyals ($410.67 million), compared with 759 million riyals in 2021, the company said in a statement to the Tadawul stock exchange, where its shares are traded.
