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WB Loan for Heating Uzbekistan

240,000 people in cities across Uzbekistan to benefit from improved heating and hot water services

Friday 26 January 2018, by Nazar TAMASHEVSKA

WASHINGTON (World Bank press service) — Over 240,000 residents in five cities across Uzbekistan are to benefit from improved efficiency and quality of heating and hot water services, thanks to the District Heating Energy Efficiency Project approved today by the World Bank’s Board of Executive Directors. The Project will be financed by a $140 mln credit from the International Development Association.

Uzbekistan often experiences cold and harsh winters. A stable heat supply is therefore critical for ensuring the well-being of its citizens and for preventing environmental, safety, and health-related hazards.

“The World Bank is pleased to support the modernization of the District Heating system”, said Hideki Mori, World Bank Country Manager for Uzbekistan. “These measures will improve the living conditions of hundreds of thousands of people across Uzbekistan.”

However, the country’s District Heating sector has suffered from years of neglect and its services have declined, if not vanished, in many cities. Consequently, many households resort to inadequate — unhealthy, unreliable, unsafe, or expensive — heating alternatives, such as coal-burning stoves. Numerous kindergartens and schools in certain areas of the country are cold and cannot provide a suitable environment for children.

In addition, District Heating enterprises that were established during the Soviet period are not operationally viable today for several reasons, including heat tariffs that are below cost-recovery levels, low bill collection rates, high network heat and water losses, poor operational management, and under-investments in the rehabilitation of their main assets.

The District Heating Energy Efficiency Project aims to address all of these challenges by introducing, for the first time, a modern District Heating model for Uzbekistan. The Project will specifically benefit residents living in multi-apartment buildings in the cities of Andijan, Bukhara, Chirchik, Samarkand, and Tashkent, and which are connected to or will be connected to the District Heating service.

Users of public and administrative buildings, including kindergartens, schools, hospitals, and municipality offices, will also experience an improvement in the quality of heating services. The Project will also invest in District Heating infrastructure, enhancing their capacity, and improving the regulatory framework to make selected District Heating companies more viable, efficient, and sustainable.

The electricity distribution subsidiaries of Uzbekenergo, a state-owned energy company, will experience a reduced overloading of their power networks and consequently there will be lower technical losses, fewer breakdowns, and less power outages in the five participating cities. The Project is expected to reduce natural gas and electricity consumption, as well as CO2 emissions, in the cities.

Project Description

The Project will have three components: Component 1: Modernization of District Heating Systems. The component will finance energy efficiency investments in renovation of heat production and transportation and distribution systems, including installation of building-level individual heating substation and heat meters for billing purposes. In addition, gas, electricity, and water supply systems will be upgraded, where it is needed for district heating purposes. The component will also finance procurement of specialized maintenance equipment for the participating district heating companies. Component 2: In-building Improvements. This component will finance replacement of in-building heating system (distribution pipelines and radiators), as well as demonstration of cost-effective weatherization measures in selected residential buildings and social facilities. Component 3: Implementation Support and Capacity Building. This component will finance capacity-building and implementation support for the Ministry of Housing and Communal Services, the Project Coordination Unit (PCU) in the Kommunkhizmat Agency, participating district heating companies and their Project teams, and home owners associations of the MABs and their management companies.

The project will be in the following localities: Andijan City (Andijan oblast), Chirchick city (Tashkent oblast), Samarkand (Samakand oblast), Bukhara (Bukhara oblast) and Tashkent City (its Sergili district). Andijan is a large regional, industrial, and cultural center located in the south-east of Fergana Valley.

Climate of the area is distinctly continental. Winters are relatively mild, monthly average temperature varies from –4 to +60°C. Precipitation falls in the form of rain and snow. From April to August heavy rains are possible, in summer there are exceptionally thunderstorms related to highly developed convention during heavy air intrusions. Annual average precipitation varies from 240 to 260 mm. Duration of seasonal snow coverage does not exceed 30 days. Summers are dry and hot.

The World Bank is helping Uzbekistan to reach a wide range of development goals by supporting 16 projects worth $2 bln. These projects support agriculture and water resources management, energy, transport, healthcare, education, urban development, water supply and sanitation.

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