Uzbekistan: Bash 2 - 300MW Wind Power Plant

OBJECTIVE

To support the expansion of renewable energy in Uzbekistan by financing the construction of a 300MW wind power plant.

DESCRIPTION

The Project involves the development, construction, and operation of a wind power plant of 300MW capacity and Purchaser Electrical Facilities, including a 1.5 km of single circuit of 500kV Overhead Transmission Line (OHTL) connecting to existing Bash-Karakul OHTL, as well as 500kV switching station. The proposed site is located in the Gijduvan district of the Bukhara region in southern Uzbekistan. This project will be co-financed with ADB and other commercial banks.

A 25-year PPA was directly negotiated and signed in November 2023 with the National Electric Grid of Uzbekistan (NEGU) as the offtaker. The Investment Agreement (IA) with the Ministry of Investments, Industry and Trade on behalf of the Government of Uzbekistan (GoU) was also signed in November 2023.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization. AIIB’s Environmental and Social Framework (ESF) will apply, including the Environmental and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL). Specifically, ESS1: Environmental and Social Assessment and Management and ESS2: Land Acquisition and Involuntary Resettlement are applicable. ESS3: Indigenous Peoples does not apply as there are no Indigenous Peoples in the Project area. Considering the nature and scale of operations, the Project is classified as Category A under AIIB’s ESF. Key associated environmental and social (ES) risks identified include those related to construction and operational activities, potential bird and bat collisions with turbine blades and towers, particularly given the proximity of the Important Bird and Biodiversity Area (IBA) at Ayakagitma Lake, located approximately 4 km from the site and possible impacts on herders’ assets within the Project footprint. 

Environmental and Social Instruments. An Environmental Impact Assessment (EIA) was prepared in July 2024 per Uzbekistan’s environmental permitting requirements. To meet the lenders requirements, a draft Environmental and Social Impact Assessment (ESIA) with an Environmental and Social Management Plan Framework (ESMPF) was developed along with the Stakeholder Engagement Plan (SEP), Resettlement Action Plan (RAP) and the Non-Technical Summary (NTS). A cumulative impact assessment was also carried out due to nearby wind farms (7-8 km), and site-specific flood risk studies were completed. The prepared Environmental and Social Action Plan (ESAP) outlines the Borrower’s commitments on the Project’s ESMS development and implementation and monitoring of all site-specific plans. ACWA Power follows a structured approach to ES management under its corporate Health, Safety, Security, and Environment (HSSE) Policy. The Project Company will develop a project-specific ES Policy and ES Management System (ESMS). The ESMPF outlines ESMS requirements and management plans for the EPC and O&M contractors.

Environmental Aspects. The Project will reduce the dependance on fossil fuel powered energy sources and enable the country to achieve its Nationally Determined Contribution (NDC) target of 35% by 2030 compared to 2010. During construction, environmental impacts such as dust, noise, traffic, hazardous materials, and waste are expected to be minor and mitigated through management plans. The site was selected for its wind potential, infrastructure, and financial viability, with ESIA-driven design adjustments to reduce flooding and avifauna risks. Operational impacts include noise, shadow flickers, and bird/bat collisions and additional relocations will address ice throw risk. The Project lies near Lake Ayakagitma, an IBA within major migratory flyways, requiring measures such as turbine curtailment, anti-nesting designs. Biodiversity survey in ESIA has identified a major risk of collision for only one species, i.e., the Steppe Eagle. Biodiversity Management Plan (BMP), Biodiversity Action Plan (BAP), and Cumulative Impact Assessment (CIA) Report will be finalized before the first disbursement, addressing risks to birds, bats, turtles, and flora, and integrating conservation and monitoring plans. The requirement for sensor-based shutdowns will be determined based on the mortality studies carried out during the operational phase. Engineering design specifications for the OHTLs especially with respect to electrocution have been recommended to be integrated in the project to prevent electrocution. A few impacted herders  (approximately five) due to both shadow and noise flicker will be relocated before operational phase.   

Social and Gender Aspects. The Project may cause temporary and permanent loss of grazing land, affecting local livelihoods, and generate health and safety concerns from increased traffic, dust, and noise during construction. Operational impacts include turbine noise, shadow flicker, and landscape changes, while the influx of workers could lead to social tensions, gender-based violence and harassment (GBVH) risks, and disease transmission. Land disputes and inequitable benefit-sharing may arise without strong engagement. The government owns the 12,626-ha land plot, though the wind farm footprint will be much smaller and largely accessible during operations. Development will economically displace assets of 23 herders with seasonal structures; no farming occurs within the footprint. Operational impacts related to noise, shadow flicker will result in relocation of assets of five herders, and additional relocations will address ice throw risk. Minor land allocations are required for the 1.5 km OHTL with a 30 m health protection zone. The Resettlement Action Plan provides compensation and livelihood restoration measures, and the consultations with project affected people on compensation entitlements have been launched.  Gender risks include barriers to women’s employment and heightened GBVH concerns due to a predominantly male workforce. Mitigation measures include GBVH Policy and Prevention/Response Plan, inclusive HR practices, gender-sensitive GRMs, and contractor actions such as gender training, safe working conditions, and inclusive recruitment, all embedded in the ESMPF and related instruments. Other social risks and impacts will be managed as part of the ESMPF and site-specific ESMPs. No cultural heritage risks or impacts were identified. 

Occupational Health and Safety (OHS), Labor and Employment Conditions (LWC). Wind farm construction involves health, safety, and labor risks such as falls, equipment hazards, and community safety concerns. These will be addressed through CESMPs incorporating robust OHS protocols, fair labor practices, signed codes of conduct, worker grievance mechanisms, and continuous contractor oversight. ACWA Power engaged an independent consultant to assess supply chain risks and completed an LWC audit of tier-1 and tier-2 turbine suppliers, finding no red flags and confirming compliance with labor standards. A Supply Chain Management Plan will be developed under the ESMS, with recommendations to strengthen due diligence for tier-2 suppliers. 

Stakeholder Engagement, Consultation and Information Disclosure. Multiple engagements and public consultations were conducted by the Borrower and its third-party consultants with affected people and relevant stakeholders. The SEP, which includes a GRM, was also prepared, defining key stakeholder engagement activities throughout project implementation. The concerns of people from vulnerable groups including women were specifically sought and considered. ACWA and AIIB disclosed the draft ES package, including a non-technical summary in English and the local language. 

Project Grievance Redress Mechanism (GRM). The Project has established a two-tier GRM at the Project Company and Contractor levels. The Project Company will manage all the complaints filed or escalated. The EPC Contractor will make grievance forms available in local languages, along with sealed and locked grievance boxes. The GRM focal points contacts for ACWA and EPC have been incorporated in the SEP. The contact details of the two-tier GRM focal points and AIIB’s Project-affected People’s Mechanism (PPM) will be advertised timely in an appropriate manner. The GRM in the operational phase of the Project will be similar to that of the construction and commissioning phase, and all grievances during operations will be recorded. 

Monitoring and Reporting Arrangement: The Project Company will manage overall ES risks and impacts, while the EPC contractor will implement ES requirements, including compliance with the Project ESMPF, labor conditions, community health and safety, and grievance mechanisms. Semi-annual ES reports will be prepared based on agreed format and submitted to AIIB during construction and operation. Lenders will appoint a Technical ES Advisor to support monitoring (including ES performance) and report directly to financiers. AIIB will conduct monitoring and supervision missions, including site visits, twice a year or as needed.