The European Bank for Reconstruction and Development (EBRD) is helping to decarbonize fertilizer production and power generation in Uzbekistan, by financing a pilot renewable hydrogen facility.

The EBRD is offering a financial package of US$65 million to Acwa Power UKS Green H2 for the development, design, construction and operation of the facility, which will consist of a 20-megawatt electrolyzer and a greenfield 52MW wind power plant.

The package consists of a US$55 million senior loan provided by the EBRD, as well as concessional finance amounting to US$10 million from Canada under the Special Fund for the High Impact Partnership on Climate Action (Hipca).  The EBRD is also planning to provide an equity bridge loan of US$5.5 million for the project.

The special purpose company is jointly owned by Acwa Power and Uzkimyosanoat (UKS), a holding company of state-owned chemical enterprises in Uzbekistan.

“EBRD is proud to finance this landmark renewable hydrogen facility in Uzbekistan with our long-standing partner Acwa Power and their partner Uzkimyosanoat.  This is the first of its kind across Central Asia, a region with some of the most carbon-intensive and hard-to-abate industries,” says Nandita Parshad, managing director for the sustainable infrastructure group at EBRD. 

Decarbonizing fertilizer sector

The plant will be the second renewable hydrogen production project financed by EBRD following the bank’s support for a renewable hydrogen facility in Egypt in 2022.

The project supported by the Japan-EBRD Cooperation Fund will help replace grey hydrogen, produced from natural gas and widely used in the production of ammonia fertilizer in Uzbekistan, with renewable hydrogen.  The latter is recognized as a key alternative for decarbonizing the fertilizer production sector.

Acwa Power develops, invests in, co-owns and operates a portfolio of power generation and desalinated water production plants. In recent years the company has been very active in Central Asia.

Hipca is supported by Austria, Canada, Finland, the Netherlands, South Korea, Spain, Switzerland, the Taiwan International Cooperation and Development Fund, the United Kingdom and the United States.  

Uzbekistan has been the leading recipient of EBRD funding in Central Asia for four years in a row. To date, EBRD has invested around €5 billion (US$5.52 billion) in 164 projects across the country, with most of those funds supporting private entrepreneurship.