Uzbekistan iCRAFT

Program Overview

The Innovative Carbon Resource Application for Energy Transition Project for Uzbekistan (iCRAFT) is the World Bank’s first “policy crediting” program. Through a $46.25 million grant, iCRAFT aims to create incentives for energy subsidy reforms that will result in lower energy consumption and GHG emissions.

The objective of the proposed TCAF crediting program is to support the transformation of Uzbekistan’s energy sector into an efficient and low-carbon sector, by paying for emission reductions generated from electricity and natural gas tariffs reform.

Country Context

34.92 million Population
46.25 million TCAF Funding
Ministry of Economy and Finance Implementing Agency

Traditionally, Uzbekistan built its economy on significant gas reserves with extensive use across the economy including for power, heating, industry, and transport. As a result, Uzbekistan’s energy sector is one of the highest energy intense in the world with over-reliance on natural gas, which comprises 83% of total primary energy consumption and 80% of the electricity mix. High energy intensity is exacerbated by below-cost tariffs and energy subsidies, leading to wasteful energy use. Uzbekistan ranks among the top 25 countries worldwide with the highest energy subsidies, 6.6% of GDP in 2020. However, in 2024-2025, Uzbekistan is reaching peak gas production, and has experienced pervasive shortages in heating and electricity services due to significant under investment.

iCRAFT seeks to assist the government to promote efficient energy resource utilization through a double dividend: accessing international carbon markets to support subsidy reforms while protecting the vulnerable households and reinvesting the proceeds in energy efficiency, energy reforms and renewable energy deployment measures.