China Eximbank provides $85.8 million loan to Turonbank for Uzbekhydroenergo JSC projects (Linked to Record ID#54385)

Project narrative

On June 8, 2018, during the Shanghai Cooperation Organization Summit, China Eximbank signed a $85.8 million loan agreement with Uzbekistan's Turonbank to support JSC Uzbekhydroenergo projects. The purpose of this loan was to support two on-lending facilities: a $22.88 million facility and a $62.96 million facility from Turon Bank to JSC Uzbekhydroenergo. These loans carried the following borrowing terms: a 20-year period, a 5-year grace period, a 2% interest rate, and a 0.2% refinancing bank margin. The borrowers were expected to use the loan proceeds to support the upgrade of five hydropower stations and 11 generators in Uzbekistan. Upon completion, the stations were expected to have an average capacity of 62.1 MW and average annual power generation of 406.1 million kWh. The specific subprojects are as follows: (1) Supply of Electrical & Mechanical equipment for UE Kadirin HPP Chain (HPP-3): This renovation project, that commenced in 2017, increased the capacity of the Kadirin (better known as Kadyrinskaya) hydro power plant from 13.2 MW to 15.34 MW. The total project cost was reported at $27.6 million, but the Chinese financing component was only $9.8 million. The project was completed on August 3, 2020, and involved contracting work from Donfang Electric International Corporation (DEC). (2) Kamolot HPP at Chirchik-Bozsu Route Project: This has been a long-proposed power plant project that only had its first turbines installed in October of 2019, despite significant efforts to begin construction in 2011 and the first proposal taking place in the 1930s. Project construction began in 2017 and it is unclear if construction has been completed. The plant is rated for 8 MW. Project cost estimates vary between $11 and $13 million, but the majority of sources agree on $12.1 million. The primary contractor for the project is Dongfang Electric International Corporation (DEC), with turbines provided by the Andritz group. (3) The Modernization of Unitary Enterprise Cascade of Nijne-Bozsu hydroelectric power station (HPP-14): This project actually involves the modernization of several stations downstream of HPP-14, its cascade. These stations are HPP-18, HPP-22, and HPP-23, with consideration given to HPP-19. The combined capacity of this cascade is 29 MW, and the project is set to increase this capacity by 4.3 MW. As of January 21, 2020, the project is out for tender and has not undergone any construction. The potential cost of the project has been reported as anywhere between $20.8 and $31.6 million. (4) The Unitary Enterprise (UE) Cascade of Tashkent hydroelectric power stations (HPP-9): This project, while in the cascade of HPP-9, actually refers to the replacement of HPP-1. The total estimated cost of this project is 26.7 million USD, although it unclear how much of this was funded by EXIM-bank. (NOTE: The Unitary Enterprise (UE) version of the Cascade of Tashkent hydroelectric power stations should not be confused with the regular version, which is simply titled "Cascade of Tashkent hydroelectric power stations." These are two separate projects, and the second one is co-financed by the IDB, not China Eximbank). The project is projected to increase the capacity of the plant by 4 MW to 16.6 MW. The replacement will be carried out by Power China. (5) The Unitary Enterprise (UE) Cascade of Shakhrikhan hydroelectric power station (SFC-2) Project: This project is part of two UE cascade projects to upgrade the hydro power plants in the Shakhrikhan region. Specifically, this project will upgrade the capacity of the plant by 3.8 MW (from 3.25 MW to 7.05 MW). This project was completed by July of 2020, and carried an estimated expenditure of $20.5 million, and it is unclear how much of this funding was provided by China Eximbank.