The Asian Development Bank (ADB) has approved a $500m loan to Turkmenistan to improve the country’s transmission network and the reliability of power supply, as well as improve the country’s potential to export electricity to neighboring countries.

ADB approves $500m loan to strengthen Turkmenistan’s power transmission network.

Image: ADB approves $500m loan to strengthen Turkmenistan’s power transmission network. Photo: Courtesy of Asian Development Bank.

The National Power Grid Strengthening Project covers four of the five regions in Turkmenistan and will help establish an interconnected national transmission grid to improve reliability and energy efficiency.

This is the first project by an international financial institution in the power sector in Turkmenistan.

The project is also aimed at boosting the country’s capacity to trade electricity with Kazakhstan, the Kyrgyz Republic, Tajikistan, Uzbekistan, and Pakistan, and increase the electricity exports to Afghanistan.

ADB Central and West Asia department director Ashok Bhargava said: “Turkmenistan has significant potential for increased electricity exports to neighboring countries, which can help propel its economic growth and development prospects.

“Hydrocarbon rich Turkmenistan is crucial to address the region’s energy security and alleviate energy poverty in countries like Afghanistan where millions are still without access to electricity.”

The $500m ADB assistance will use used for the construction of 1,100km of new 110kV, 220kV and 500kV transmission lines across Turkmenistan and expand three existing substations.

The project will also finance the construction of new substations, including 500kV substations in Balkan and Dashoguz, as well as 220kV substations in Ahal, Balkan and Dashoguz.

ADB principal energy specialist for Central and West Asia Sohail Hasnie said: “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.”

The National Power Grid Strengthening Project is also expected to improve project and financial management capacity of the country’s power utility Turkmenenergo.

ADB will administer a $1.5m technical assistance from the Japan Fund for Poverty Reduction to improve energy efficiency and capacity.

The total cost of the project is $675m, of which Turkmenenergo will contribute $175m. The project is expected to be completed by the end of 2023.