The challenge of greater energy efficiency in Uzbekistan Martin Raiser Country Manager Uzbekistan The World Bank

Uzbekistan’s Energy Resources: A Fossil Fuel based system

Energy efficiency in Uzbekistan is among the lowest in the world

Commercial and technical losses are a key problem

Significant upside potential but uncertainty over resource base and significant investment needs Implications: increase in domestic gas availability for thermal generation of 4.8-5.5 bcm investment needs in power sector of US$2’300 mln Additional investment needs in upstream oil & gas

The promise of greater energy efficiency If Uzbekistan Achieved Russian’s current level of Electricity Intensity by 2015 Savings would amount to 41’000 GWh or $1.4 billion annually Reduced Commercial and Technical Losses to 10% by 2015 Savings would amount to 7’200 GWh or $250 million annually

Challenges for greater energy efficiency Price adjustment for demand reduction - Good progress, but worry about affordability for the most vulnerable (already energy 25% of their budget) Improved corporate governance for commercial and technical loss reduction - Metering program is absolutely necessary - Needs to be integrated with MIS system to reduce scope for corruption - Increased cash flow crucial to fund urgent investments Attract private sector for greater efficiency Performance based contracts to create incentives to save Competitive tendering to achieve least cost solutions

The role of the World Bank and other donors Support for priority investments – WB credit planned for: Metering and billing in electricity and gas distribution TA for improved MIS in Uzbekenergo and gas distribution targeted social support to the vulnerable development of sound regulatory framework Dialogue of broader sector reform issues Audit of oil & gas reserves Advice of attracting private investment into energy sector Maximizing opportunities for export and regional cooperation (see next presentation by R. Sharma)