Uzbekistan Unlocks $5M World Bank Climate Grant, Completes iCRAFT Payments

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan has received a $5 million third and final grant tranche from the World Bank under the iCRAFT program — "Innovative Carbon Resources for Energy Transformation" — completing all disbursements stipulated under the Emissions Reductions Purchase Agreement (ERPA), the Ministry of Economy and Finance announced June 12.

The payment was unlocked after an independent international verifier certified that Uzbekistan's energy sector reduced greenhouse gas emissions by 13.7 million tonnes over the course of 2024. The tranche was structured around the monetization of 333,000 tonnes of carbon units and processed through the World Bank's digital Client Connection platform using results-based financing (RBF) mechanisms.

The figures underscore the cumulative scale of Uzbekistan's energy reform push. Over three years, structural changes to the country's power sector have prevented 23.6 million tonnes of greenhouse gas emissions from entering the atmosphere, generating $20 million in total grant funding tied to verified reductions of 1.33 million tonnes.

The Director of the Green Economy Projects Centre — the project office operating under the Ministry of Economy and Finance — said iCRAFT has served as a critical financial catalyst for grid modernization, fulfillment of Uzbekistan's international climate commitments, and the construction of a national monitoring, reporting and verification (MRV) system.

Jorn Huenteler, Senior Energy Specialist at the World Bank, offered a positive assessment of the partnership, noting that the successful drawdown of the third tranche demonstrates the Uzbek government's genuine commitment to decarbonization and an accelerated transition to a low-carbon development model.

Launched under Presidential Decree No. PP-271 of August 8, 2023, iCRAFT runs through 2028 with a total World Bank grant envelope of $45 million. The program pursues a dual mandate: integrating Uzbekistan into international carbon markets while introducing social protection measures designed to cushion the impact of energy tariff reforms on vulnerable households — a politically sensitive dimension of the country's broader power sector overhaul.