UZBEKISTAN RENEWABLE
ENERGY INVESTORS GUIDE

The implementation of RE projects in Uzbekistan is regulated by the Law on use of Renewable Energy sources which entered into force on 22 May 2019. It is the first statute that provides comprehensive regulation of the sector of RE in Uzbekistan. Uzbek Renewable Energy law covers not only generation of electricity from renewable energy, but also the production of the equiment that generates such energy. Under the RE law the renewable energy sources are defined energy of solar, wind, geothermal, hydrothermal, hydropower, biomass, which are naturally renewed in the environment.

PPA is a contractual agreement between a guaranteed energy buyer and an alternative energy power generator (a seller). The required conditions to make a PPA effective:

• The required conditions to make a PPA effective:
• Comprehensible text (concept, terminology);
• Fair allocation of risks between the Parties;
• Predictability of key elements (fees, liability of the parties, etc.)
• Procedures and instruments to address problems (non-performance of obligations, compensations, force-majeur, etc.)

As of today, there is no standard form of power purchase agreement (PPA). However, it is expected that the PPA is to be drafted and approved by the Ministry of Energy in the near future.

Tariffs for electricity generated from renewables will be determined based on a competitive bidding process. All costs for purchasing electricity, including electricity from renewable energy
sources, will be taken into account while setting the tariffs for end consumers.

New Tax Code, adopted in December 30,2019 provides following tax incentives for RE projects:

• RenPower producers exempt from Property Law and Tax on RenPower facilities for 10 years from commissioning (>10 MW);
• Producers of RenPower equipment exempt from all taxes for 5 years from incorporation;
• Individuals using RenPower and disconnected from grid exempt from Property Tax for 3 years;
• Persons (natural and legal) using RenPower and disconnected from grid exempt from Land Tax for 3 years;

PPA is a contractual agreement between a guaranteed energy buyer and an alternative energy power generator (a seller). The required conditions to make a PPA effective:

• The required conditions to make a PPA effective:
• Comprehensible text (concept, terminology);
• Fair allocation of risks between the Parties;
• Predictability of key elements (fees, liability of the parties, etc.)
• Procedures and instruments to address problems (non-performance of obligations, compensations, force-majeur, etc.)

As of today, there is no standard form of power purchase agreement (PPA). However, it is expected that the PPA is to be drafted and approved by the Ministry of Energy in the near future.

The government guarantees connection of power producers to the single electricity system. The government also gives territorial electricity networks the right to enter into contracts with power producers with the approval of the responsible bodies.

In the PPA, the Seller requires to provide responsibility for the reception and transmission of electricity produced by RES facilities, and for dispatching the capacity of RES facilities, by including certain obligations in the PPA (Take-or-Pay, curtailment, etc.) Long-term perspective system research:

• To understand the possibility of fulfilling such obligations, the Offtaker, with the involvement of consultants, should conduct a study of the UZ power system (analysis of the flow distribution of transmission networks and modes, to identify the necessary restrictions on network capacity and dispatching);
• To make a decision on possible necessary restrictions on power output for renewable energy facilities.

Contractual obligations (case-by-case or standard PPA): consultant prepare proposals in the PPA or (in the provisions on connection, transmission, dispatching, etc.), with the inclusion of curtailment, take or pay rules.

Guaranteed purchase of produces electricity

Development and examination of terms of reference (TOR) for the development of a technical-and economic assessment (TEA)/technical-and-economic report (TER):

• Development of the TOR for the development of TEA/TER and its approval
• Examination of the TOR with the issuance of a positive opinion or comments
• Elimination of the comments and resubmission of the TOR to Expertise Centre
• Review of the re-submitted TOR with the issuance of an opinion