MANILA (ADB press service) — The Asian Development Bank’s (ADB) Board of Directors has approved a $500 mln loan to reinforce Turkmenistan’s transmission network, improve the reliability of the country’s power supply, and increase electricity exports to neighbouring countries.

The National Power Grid Strengthening Project, which is the first project by any international financial institution in the power sector in Turkmenistan, will cover four of the country’s five regions and help establish an interconnected national transmission grid to improve reliability and energy efficiency of the network. It will also boost Turkmenistan’s capacity to trade electricity with Kazakhstan, the Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan, and increase the volume of current electricity exports to Afghanistan.

ADB’s $500 mln assistance will finance the construction of about 1,100 km of new 110 kV, 220 kV, and 500 kV transmission lines in various areas in Turkmenistan and expand three existing substations. The project will also finance the construction of new substations, including 500 kV substations in Balkan and Dashoguz, as well as 220 kV substations in Ahal, Balkan, and Dashoguz.

“ADB’s assistance will ensure that the country has a strong backbone of power transmission infrastructure as well as technical knowledge and practices consistent with international best practices to support this expansion of electricity exports”, said ADB Principal Energy Specialist for Central and West Asia Mr. Sohail Hasnie. “A modern and strengthened network is the necessary first step for Turkmenistan to become a power house for Central Asia.”

The National Power Grid Strengthening Project will also improve project and financial management capacity of Turkmenenergo, the power utility of Turkmenistan, particularly in incorporating good practices on evaluation, investment decision-making, as well as higher safeguard requirements. A $1.5 mln technical assistance from the Japan Fund for Poverty Reduction, financed by the Government of Japan, to improve energy efficiency and capacity will be administered by ADB.

The total cost of the project, which is expected to be completed by the end of 2023, is $675 mln, with Turkmenenergo contributing $175 mln.