The blended concessional finance co-investment would be provided by IFC to facilitate financial closure of the first utility-scale renewable energy project in Uzbekistan, which would not otherwise be achievable due to participation constraints given the lack of track investment record in a sector with a new and untested regulatory framework. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is estimated to be less than 3% of the total project cost. This estimate is based on the difference between (i) a “reference price” (either a market price if available; or the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFC’s blended concessional finance co-investments, this Project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance. As part of IFC’s commitment to transparency in the deployment of concessional blended finance resources, the potential blended concessional finance co-investment was offered to participating bidders in the Scaling Solar tender process by which the project was procured by the Government of Uzbekistan. This enabled the benefit of the embedded subsidy to be passed through to benefit the tariff and utility off-taker.

21.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	1.0
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

The most significant project level outcome is a reduction in carbon emissions of Uzbekistan. The solar PV plant is expected to displace aging and energy intensive thermal power generation in the merit order of dispatch and increase electricity supply from a renewable source at a competitive tariff. By supporting the development of the first utility scale solar PV IPP procured under the Scaling Solar framework, the Project demonstrates a competitive replicable model to scale solar PV in Uzbekistan that will catalyze private sector in a market with limited IPP track record, reinforce a new market structure with increased IPP participation, and improve resilience through the diversification of Uzbekistan's electricity generation mix with low-cost renewable energy generation.

The proposed IFC financing package is part of the World Bank Group "WBG" Scaling solar framework, which also includes upstream government engagement on tender design and execution, and credit enhancement for the Project off-taker. This would be the first time the WBG Scaling Solar framework is tested outside Africa. IFC long-term financing and concessional funding will contribute to lower cost of capital for the Sponsors and enabling a competitive tariff bid. IFC financing is offered at terms not available from commercial banks in Uzbekistan, and together with the deployment of WB credit enhancement products will mitigate commercial risks and facilitate financial closure. IFC sector knowledge and global experience in financing IPPs is material to structuring and negotiating bankable financing documentation in line with best project finance standards.

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability as the E&S impacts associated with the project are limited, generally project-specific and can be addressed through the implementation of good international industry practices.  Further, it is possible to design and implement engineering and management measures to mitigate adverse impacts during construction and operation. The environmental and social risks are rated as moderate (as per IBRD classification) and for those that have been identified, the client’s E&S management system and the agreed E&S Action Plan (ESAP) provides appropriate mitigation.             

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.