MOSCOW (IANS, RIA Novosti) – China’s Suntech Power Holdings Co. state energy company Uzbekenergo have signed a memorandum to establish a solar panel factory in Uzbekistan at an estimated cost of $10 mln. The project is to be set up in the Navoiy free industrial and economic zone. It did not clarify when the project would begin.

Based in Wuxi, China, Suntech claims to be the largest producer of solar panels in the world.

Uzbekistan is currently heavily reliant on coal and gas while its solar energy potential is estimated at 50.9 bln tonnes of oil equivalent or 99.7% of all renewable energy sources surveyed in the republic.

Uzbekistan is investing heavily in solar power, and has already attracted other foreign investors. Tashkent inaugurated a new solar research institute in February 2012, in cooperation with the Asia Development Bank (ADB), the bank said. Uzbekistan also plans to build several solar-based electric power plants with a capacity of over 2 GW, according to earlier reports. Those plants will be financed by Uzbenergo and loans from the ADB and other international financial organisations.

In 2012, Uzbekenergo started designing a 50 MW capacity solar electric power station in the Tashkent region, to generate 110 mln KWh of power annually. The project, with estimated cost of $250 mln, will be financed with a $90 mln loan from the ADB and investment from Uzbekistan.

Russian oil major LUKoil has also presented proposals for building a solar plant in Uzbekistan, in a joint program with the ADB and the Uzbekistan government, PV Magazine reported in October 2011.

In December 2012, Uzbek government declared it was extending tax exemptions to enterprises with a minimum 30% direct private foreign investment in 20 industries, including construction of renewable energy power stations.