The Asian Development Bank (ADB) has approved loans totalling US$600mn for Sri Lanka and Uzbekistan.

The Manila-based lender said Sri Lanka will get a dual-tranche loan amounting to US$300mn, which will be used to help boost Sri Lanka’s use of clean energy and cut its reliance on petroleum oil for electricity generation.

The first US$150mn tranche will finance a 30-megawatt, run-of-the-river hydropower plant at Moragolla in Central Province and expand and upgrade transmission lines in other other infrastructure in needy areas, including the former conflict-affected Northern and Eastern Provinces. The hydropower plant will generate an additional 97.7 million units of hydropower for the grid, saving about 72,300 tonnes of carbon dioxide (CO2) emissions every year while improved transmission lines will further reduce annual CO2 emissions by 98,400 tonnes.

The second US$150mn tranche, expected to be delivered in 2016, will include expanding the 33 KV medium voltage network to improve distribution of electricity to consumers and the development of transmission network facilities to allow power delivery from two 100 MW wind parks due to be built in the Northern Province in 2017 and 2020.

In addition to ADB funds, there will be co-financing of up to US$60mn from France’s Agency Française de Developpement and counterpart funds of US$80mn from the Sri Lankan government. The programme, which costs a total of US$440mn, is expected to be completed by late 2020.

Meanwhile, ADB has also approved a US$300mn loan to upgrade Uzbekistan’s Takhiatash thermal power plant to meet rising electricity demand in the west of the fast-growing Central Asian country.

“Karakalpakstan and Khorezm regions are expecting electricity demand to grow at double the rate of the forecasted national average. Reliable power supply is essential to meet the residential demand and for future industrial development and growth,” says Rune Stroem, director of the energy division of ADB’s Central and West Asia department. “This loan will help finance modern generating units to increase the reliability of power supply, save energy, and cut greenhouse gas emissions.”

Aging power infrastructure, much of it dating back to the era of the Soviet Union, is undermining Uzbekistan’s ability to meet power demand and weighing on business and household activity. The loan will finance a project to build two new energy-efficient combined-cycle gas turbines of up to 280 MW each, while decommissioning three existing steam turbine units, with two others to be kept as backup.

Along with ADB’s assistance, the Uzbekistan Fund for Reconstruction and Development will provide a US$270mn loan, with Uzbekenergo and the government of Uzbekistan extending a combined US$130mn, for a total investment cost of US$700mn.

The project will run for six years with an estimated completion date of end-October 2020.