Uzbekistan is beginning a rapid scale-up of renewable power, and large solar projects are essential for meeting its target to increase the share of renewables to 40% of total electricity generation by 2030. This is a strikingly ambitious objective given today’s starting point: in 2023, around 90% of Uzbekistan’s electricity was produced from fossil fuels, mainly in the form of natural gas, while solar and wind together accounted for less than 1%, and renewables more broadly reached only about 10%, almost all of which came from hydropower. At the same time, electricity demand is rising, natural gas supplies are tightening, and the country faces seasonal shortages.

Energy China (CEEC), the developer of this project, is one of the world’s largest energy engineering groups. Historically known for large thermal and hydropower EPC projects, the company has, over the past decade, shifted towards an integrated “EPC + own + operate” model, particularly for renewables. This strategic shift aligns with China’s dual-carbon goals, its pledge to stop building new coal plants overseas and the growing demand for invest-and-operate models in EMDE markets.

In February 2023, CEEC signed a memorandum of understanding with the Uzbekistan Energy Ministry and committed to developing a total of 2-GW of solar power in Uzbekistan. As part of its commitment, a 1-GW solar photovoltaic (PV) complex project, consisting of two 500-MW solar farms, was built in the Bukhara and Kashkadarya regions, with two farms developed largely in parallel. The first 400 MW entered commercial operation in December 2023, and the remaining 600 MW was commissioned in June 2024. Energy China acted as developer and sponsor, implementing the project through a fully owned local project company and coordinating design, engineering, procurement and construction across both sites.

Led by Energy China, this project is one of the country’s first large-scale solar projects and plays a meaningful role in bridging the investment gap. Once fully operational, the two sites will generate an estimated 2 400 GWh of solar electricity annually – about 32% of Uzbekistan’s 2023 consumption – while avoiding 2.4 Mt CO2 and reducing natural gas use by roughly 520 million cubic metres per year. These savings directly support Uzbekistan’s goals to diversify generation, strengthen winter reliability and reduce dependence on domestic gas.

The project is notable as the first overseas renewable energy investment to use RMB-denominated lending backed by full Sinosure credit guarantees. Energy China provided USD 410 million in equity – higher than typical project-finance structures – helping lower leverage to levels acceptable for lenders in a nascent market.

Debt financing came from an RMB 3.3 billion 15-year syndicated loan including China Construction Bank, Bank of China and CEXIM, as well as China’s commercial bank, China Minsheng Bank. The independent power producer (IPP) project revenues and loan repayment in Uzbekistan are usually underpinned by a 25-year power purchase agreement (PPA) with JSC Uzenergosotish, a fully state-owned power company in Uzbekistan. The fixed-tariff structure of the PPA provides predictable cash flows required for non-recourse project finance. This allows lenders to rely on project performance – rather than sponsor or sovereign guarantees – for repayment, a particularly important feature in EMDE markets working to expand renewables while managing public-debt constraints.

The facility is insured through Sinosure’s medium- to long-term export buyer’s credit insurance, which covers 95% of political and commercial risks. This guarantee was the central enabler of the transaction, lowering risk premiums and allowing both commercial and policy banks to offer long-tenor financing despite limited precedent for large-scale PV in the country.

Using RMB rather than USD borrowing further reduced exposure to elevated US interest rates in 2022 and 2023, improving cost stability for the sponsor. Together, these elements created a financing structure that is bankable, replicable and well suited to Uzbekistan’s evolving market.

This project illustrates how China’s evolving outbound financing model – combining SOE equity, long-tenor lending and risk-mitigation instruments – can unlock large-scale renewable investment in EMDE. The structure is replicable for markets with limited sovereign borrowing room, volatile currencies or thin domestic banking sectors. It also shows how CNY-based financing can create alternative channels for clean-energy investment where USD funding is costly or scarce.

More broadly, the case reflects a shift among Chinese SOEs from EPC-only roles towards integrated invest-build-operate models that support long-term system transformation. For Uzbekistan, it provides a major early step towards achieving its 2030 renewable targets while strengthening energy security and diversifying away from natural gas.