TASHKENT, Uzbekistan, July 8. The World Bank has provided a grant to Uzbekistan for reducing greenhouse gas (GHG) emissions, Trend reports.
The recent grant will aid the Government of Uzbekistan in , promoting efficient energy resource utilization, and accessing international carbon markets.
The project, called Innovative Carbon Resource Application for Energy Transition (iCRAFT) in Uzbekistan, marks the World Bank's first "policy crediting" initiative.
With a grant of $46.25 million, iCRAFT aims to create incentives for energy subsidy reforms that will lead to reduced energy consumption and GHG emissions. The program will assign value and credit for implementing and enforcing policies that foster emission reductions in the energy sector.
The grant specifically aims to generate carbon emission reduction credits that can be traded in international carbon markets. iCRAFT will be the first international carbon market initiative in Uzbekistan and Central Asia under the Paris Agreement, an international treaty focused on limiting global temperature increases by lowering global GHG emissions.
Although Uzbekistan's contribution to global carbon emissions is not significant, the country is among the most energy- and emissions-intensive nations. Subsidies keep electricity and gas prices low, resulting in insufficient revenue to cover production and delivery costs. These low prices discourage energy efficiency efforts by households and businesses and limit improvements in service delivery within the sector.
Over the duration of iCRAFT until 2028, the grant will be disbursed annually to reward energy subsidy reforms that achieve specific emissions reductions. It is projected that Uzbekistan could reduce approximately 60 million metric tons of CO2 throughout iCRAFT's life cycle, with the project providing payment for around 2-2.5 million metric tons of CO2. The remaining emissions reductions can be sold in international carbon markets using the systems and processes developed and tested under the project.
The World Bank's program in Uzbekistan is one of the largest in the Europe and Central Asia region, consisting of 29 projects with net commitments totaling around $6 billion. These initiatives support reforms and modernization in key sectors, enhance people's well-being, and contribute to the country's economic growth.