Business & Economy - The Times Of Central Asia

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Renewable Energy

Acwa and KOWEPO Explore Renewable Energy Projects in Uzbekistan

South Korea’s KOWEPO, which is wholly owned by state-controlled Korea Electric Power Corporation (KEPCO), is moving into Uzbekistan’s rapidly expanding green energy market alongside Saudi Arabia’s Acwa, one of the market’s largest players. No specific projects have been announced yet, but the companies will explore opportunities in renewable generation and energy storage while considering the possibility of attracting South Korean financing. The memorandum was signed in Tashkent on August 25. For KOWEPO, the agreement offers an opportunity to bring to Central Asia the experience it has gained through projects in the Middle East totaling 3.5 GW of renewable capacity and 877 MW of gas-fired generation. For Acwa, Uzbekistan has already become its second-largest market after Saudi Arabia. The company has operated there since 2019 and is developing 19 projects with a combined capacity of more than 10 GW and potential investment estimated at $15 billion. Abid Malik, Acwa’s president for Central Asia, said the companies would also seek to “facilitate engagement with Korean financial institutions” as they assess potential projects. Acwa’s portfolio in Uzbekistan includes solar and wind power, conventional generation, green hydrogen, and energy storage. Storage is becoming increasingly important as the share of solar and wind grows because utility-scale batteries can store surplus electricity and return it to the grid when renewable generation falls. Uzbekistan aims to expand renewable energy capacity to around 25 GW by 2030, with renewables targeted to account for 54% of electricity generation. The rapid construction of solar and wind farms comes as electricity demand rises and Uzbekistan seeks to modernize a power system that has historically relied heavily on gas-fired generation. Acwa has already secured contractual priority to develop up to 2 GWh of new battery energy storage capacity in the country. KOWEPO could therefore provide additional expertise and capital. Uzbekistan’s energy transition has already attracted major investors from Saudi Arabia, the United Arab Emirates, China, and elsewhere. For now, the agreement with KOWEPO remains a framework arrangement, with the capacity, cost, locations, and timelines of any joint projects yet to be announced. Its practical significance will become clearer if the companies move from exploring opportunities to concrete investment decisions.

Fuel Prices

Kyrgyzstan Extends Fuel Subsidies Amid Russian Supply Disruptions

Kyrgyzstan has extended subsidies for fuel importers through the end of 2026. Bishkek is trying to contain prices at the pump as problems in the Russian fuel market push traders to seek supplies elsewhere and make domestic refining more important. On August 26, the Cabinet of Ministers extended a temporary fuel subsidy scheme through December 31.Under the scheme, the state covers part of eligible importers’ fuel and transportation costs when the total exceeds a fixed threshold. The government also raised those fixed prices: from $860 to $960 per metric ton for AI-92 gasoline, from $950 to $1,050 for diesel, and from $575 to $650 for automotive liquefied petroleum gas. The change means importers must now absorb more of the cost themselves before receiving a subsidy. AI-92 is a lower-octane gasoline broadly comparable to regular fuel in the United States. AI-95, closer to the standard unleaded gasoline sold across much of Europe, was included in the original subsidy mechanism introduced in late May, but has now been removed from both the subsidy program and temporary price regulation. The extension keeps government support in place for another three months. On August 25, Chairman of the Cabinet of Ministers Adylbek Kasymaliev said the government had allocated 956.1 million soms, or about $11.4 million, in subsidies to companies importing petroleum products. Kyrgyzstan receives more than 90% of its imported fuel from Russia, where Ukrainian drone attacks and refinery outages have reduced available supplies. Shortages have also emerged on the Russian domestic market, prompting Moscow to tighten restrictions on fuel exports, although supplies under intergovernmental agreements, including Russia’s agreement with Kyrgyzstan, are exempt. On August 25, Reuters, citing three industry sources, reported that Russia was set to extend its ban on diesel exports by producers through September as shortages persisted and several refineries remained idle following repeated Ukrainian drone attacks. Kyrgyzstan felt the effects relatively quickly. Gasoline and diesel prices rose, while some filling stations experienced shortages of AI-95 gasoline, even as the more widely used AI-92 remained available. Fuel traders have already begun buying from farther afield. China is emerging as an alternative source of supply. After talks with Sinopec, a Kyrgyz delegation met with state-owned CNPC on August 19. The discussions focused on procedures for supplying petroleum products to Kyrgyzstan through CNPC-affiliated Kunlun Logistics. Following the talks, Kyrgyz companies signed contracts with CNPC for petroleum product supplies, although volumes, prices, and delivery schedules were not publicly disclosed. The fuel squeeze has also made an existing effort to refine more oil domestically more important. The modernization of the Junda refinery is not a new response to the current shortages: the $193.75 million project was already underway earlier this year and had previously been scheduled for completion by July 31. On August 25, the National Investment Agency signed an additional agreement with Central Asia Energy Company allowing the next stage of modernization of the Junda refinery in Kara-Balta, the country’s largest, to begin. The latest announcement did not give a new completion date. The project...

Fuel Crisis

Russia Fuel Crisis Pushes Central Asia to Seek Alternatives

Disruptions at Russian oil refineries are beginning to reshape Central Asia’s established fuel supply routes. Kyrgyzstan is arranging supplies from China; Tajikistan has requested large volumes of crude oil and fuel from Iran, while Kazakhstan plans to more than double its refining capacity and eventually sell more petroleum products to its neighbors. Kyrgyzstan: The China Route Becomes a Real Option Kyrgyzstan and Tajikistan have felt the impact of Russia’s disruptions more acutely than other Central Asian countries. Both have limited domestic oil production and depend heavily on imported fuel. Galiya Ibragimova, a Central Asia expert with Carnegie Politika, told Al Jazeera that the two countries had been hit hardest in the region and said the search for new suppliers would continue, although alternative fuel would most likely be more expensive. For Kyrgyzstan, the Russian supply model had long been the most convenient. As a member of the Eurasian Economic Union (EAEU), Kyrgyzstan can import agreed quantities of Russian fuel duty-free each year. For 2026, Moscow has agreed to supply around 1.5 million tonnes – roughly equivalent to Kyrgyzstan’s total annual demand for petroleum products. More than 90% of Kyrgyzstan's imported fuel comes from Russia. This summer, that system began to falter. On August 12, Kanatbek Eshatov, head of Kyrgyzstan’s Oil Traders Association, said Russian refineries were offering virtually no additional volumes. Fuel was already arriving from Belarus, Azerbaijan, Turkey, one European country, and other markets. Eshatov did not expect the situation with Russian supplies to improve before October. Bishkek has also negotiated directly with China’s largest oil companies. Following talks with Sinopec, a Kyrgyz delegation met CNPC management on August 19. Kyrgyz companies signed contracts with CNPC for petroleum product supplies through Kunlun Logistics, according to Kyrgyz state news agency Kabar. Volumes and prices have not been disclosed. China is unlikely to displace Russia quickly on price. There is no direct rail connection between China and Kyrgyzstan, while road transport across the mountainous border is more expensive. But direct contacts with Sinopec and CNPC are giving Kyrgyz traders a supply channel that until recently was barely used. Another option is to refine more oil domestically. The country’s largest refinery, Junda in Kara-Balta, is moving to the next stage of a modernization project valued at $193.75 million. The plant is expected to increase petroleum product output and move to Euro 5 fuel standards. Kyrgyzstan does not produce enough crude to keep the refinery running at capacity, however, so it would still need to import much of the oil it refines. Bishkek is therefore keeping Russian finished fuel [bit technical] in the mix while purchasing petroleum products from other markets. It is also looking to refine imported crude domestically. Tajikistan: Iranian Crude Rather Than Just Another Gasoline Supplier Dushanbe has chosen a larger-scale option. During talks with Iran, Tajikistan requested 2.55 million tonnes of crude oil and petroleum products: 2 million tonnes of crude, 300,000 tonnes of diesel, 150,000 tonnes of gasoline, and 100,000 tonnes of jet fuel. Tajikistan’s Transport Ministry announced the...

GDP Forecast

Kazakhstan Forecasts GDP Growth Above 5% in 2027–2029

Kazakhstan’s government has approved a socioeconomic development forecast and draft republican budget for 2027–2029, projecting average annual real GDP growth above 5% as manufacturing, agriculture, construction, transport, and other non-oil sectors expand. The forecast was prepared with reference to the global economic outlook and conditions in external markets. The accompanying draft budget, approved at the same government meeting chaired by Prime Minister Olzhas Bektenov, will be submitted to the Kurultai for consideration. Under the government’s baseline scenario, real GDP is projected to grow by 5.3% in 2027, 5.5% in 2028, and 5.4% in 2029. Nominal GDP is expected to rise from KZT 199.3 trillion in 2027 to KZT 245 trillion in 2029, an increase of almost 23%. Non-oil sectors are expected to provide the main impetus for expansion. Manufacturing output is forecast to grow by an average of 5.9% a year, substantially faster than the 2% projected for mining. Metallurgy, mechanical engineering, construction materials, chemicals, and food production are expected to make the largest contributions. Oil exports and the broader mining sector will remain central to the economy and public finances, but the forecast assumes that manufacturing and other non-oil activities will account for a larger share of new output. TCA reported in July that Kazakhstan’s economy expanded by 4.1% in the first half of 2026 despite an 8.4% decline in oil production. The non-oil economy grew by more than 5%, with manufacturing, construction, trade, and transport accounting for more than 80% of overall growth. Manufacturing output increased by 9.8%. Agriculture is expected to expand by at least 5% annually. Construction is projected to remain among the fastest-growing sectors, increasing by 16% in 2027 and 17.3% in 2029. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin said the expansion would be supported by transport and logistics, energy, and water projects, together with the modernization of housing, utilities, and social infrastructure. The services sector is also expected to maintain strong momentum. Trade is forecast to expand by an average of 5.7% annually, information and communications by 9.2%, and transport and warehousing by 10.4%. The transport forecast builds on rapid expansion along the Trans-Caspian International Transport Route, or Middle Corridor. Annual freight volumes through Kazakhstan have risen from 0.8 million to 4.5 million tons over seven years, while delivery times fell from approximately 28–32 days to 13–17 days. The route still carries substantially less cargo than established northern corridors, and participating countries continue to work on remaining bottlenecks. Infrastructure spending is a central element of the draft budget, but Bektenov said it must be accompanied by stronger financial discipline. Under President Kassym-Jomart Tokayev’s instructions, accelerated construction of infrastructure and social facilities has been designated as a principal budget priority. Government bodies were told to meet the approved economic targets, while administrators of budget programs were directed to increase the return on every tenge spent. The headline budget deficit is forecast to fall from 2.3% of GDP in 2027 to just 0.4% in 2029. However, the non-oil deficit, which measures the...

Oil Refinery

Kyrgyzstan Advances Junda Refinery Modernization Amid Fuel Supply Strain

Kyrgyzstan’s largest oil refinery, Junda in Kara-Balta, is moving to the next stage of a modernization project worth nearly $194 million. The project has taken on added significance amid problems with fuel supplies from Russia, on which Kyrgyzstan remains heavily dependent. On August 25, Ravshanbek Sabirov, head of the National Investment Agency, signed an additional agreement with China’s Central Asia Energy Company. The document allows the next stage of the Junda modernization project to begin. Once upgraded, the refinery is expected to increase petroleum output and produce fuel meeting Euro 5 standards. The official announcement confirms the start of the new phase but does not specify its individual cost. Junda, also known as Zhongda, is located in Kara-Balta, about 60 kilometers west of Bishkek. The refinery is operated by the Kyrgyzstan-registered China Petrol Company Junda, which is 99% owned by China’s Central Asia Energy Company. The remaining 1% is held by Kyrgyzstan-registered Dade Service Company. The refinery, with an annual crude-processing capacity of 800,000 tons, began operating in 2014. Production halted in early 2020, and the plant remained idle for about four years. Before the shutdown, residents of Kara-Balta had repeatedly complained about air pollution and unpleasant odors from the facility. The shutdown lasted about four years, with production resuming in 2024. A new modernization program followed. A 2024 investment agreement initially put the cost of repairs and modernization at $160 million, while the company later cited an investment of more than $167 million. An additional agreement subsequently raised the project figure to $193.75 million. The refinery’s stated processing capacity remains 800,000 tons per year. The project’s timeline, however, remains unclear. An earlier supplementary agreement called for the modernization to be completed by July 31, 2026. That deadline has already passed, yet on August 25 the parties signed another agreement allowing the next phase to begin. The National Investment Agency has not explained whether the original deadline has formally been extended. President Sadyr Japarov has previously given a different target – 2028. He also said the Chinese side had allocated about $500 million for Junda, substantially more than the $193.75 million cited in the investment agreement. It is unclear whether the two figures refer to different stages or scopes of work. Japarov has also spoken about modernizing another refinery, Kyrgyz Petroleum Company in Manas, the city formerly known as Jalal-Abad. For Kyrgyzstan, the issue is not only fuel quality. Deputy Energy Minister Nasipbek Kerimov said in July that Kyrgyzstan consumes around 2 million tons of fuel and lubricants annually and that almost 95% has traditionally come from Russia. More recent government figures put average annual demand at more than 1.5 million tons, while Japarov has said Russia currently accounts for about 90% of consumption. That dependence has become particularly visible this summer. Disruptions at Russian refineries and reduced volumes available for export have pushed prices higher. Ukrainian drone strikes, refinery outages, and strong domestic demand have contributed to fuel shortages in Russia and restrictions on exports to some markets. Rising fuel...

AIFC TCA Interviews

AIFC Interview: Central Asia Investment, Middle Corridor and ESG

The Astana International Financial Centre (AIFC) positions itself as a platform for international investment in Kazakhstan and across Central Asia. In an interview with The Times of Central Asia, Zhanbolat Kakishev, Chief Product Officer at the AIFC Authority, discussed competition for investment, financing for the Middle Corridor, investor protection, ESG, and currency risks. Kakishev said the AIFC ecosystem has attracted $26.3 billion in investment to Kazakhstan and registered more than 6,000 companies from 90 countries. TCA: How does the AIFC assess the current investment climate in Central Asia amid the fragmentation of global markets, and what share of foreign direct investment into the region does the centre aim to attract in the coming years? Zhanbolat Kakishev: We assess Central Asia’s investment climate as resilient and gradually strengthening despite the fragmentation of global markets. Moreover, the restructuring of global supply chains and investors’ search for new sources of growth are creating additional opportunities for the region. International investor interest in Central Asia already rests on a solid foundation. According to UNCTAD, by the end of 2025, the stock of foreign direct investment in the region had reached approximately $235.5 billion, of which $156.4 billion was in Kazakhstan. The region combines a substantial resource base, a growing domestic market, and a strategic position between Europe and Asia. It also has significant investment potential in areas including transport and logistics, energy, critical minerals, digitalisation, and financial services. The AIFC does not set a target in the form of a fixed share of total FDI flowing into Central Asia. Our task today is to continue improving the AIFC ecosystem, its infrastructure, and the conditions that allow international capital to enter Kazakhstan effectively, as well as to participate in regional projects. To date, $26.3 billion in investment has been attracted to Kazakhstan through the AIFC ecosystem. More than 6,000 companies from 90 countries are registered in the Centre’s jurisdiction. For us, however, it is not only the volume of capital attracted that matters, but also its quality — long-term investment that contributes to economic diversification, private-sector development, and the further integration of Kazakhstan and Central Asia into global capital markets. TCA: Given the growing interest in the Middle Corridor, or Trans-Caspian International Transport Route, what investment instruments does the AIFC offer to finance major infrastructure and logistics projects in the region? Zhanbolat Kakishev: The AIFC provides comprehensive legal and financial infrastructure for structuring and attracting financing for major infrastructure and logistics projects, including those along the Middle Corridor. Depending on the structure of a project, special-purpose vehicles or companies (SPVs/SPCs), joint ventures, and investment funds can be used to pool capital from strategic, institutional, and private investors. Through the Astana International Exchange (AIX), projects can also raise debt and equity financing, including through conventional, green, and sustainability bonds, as well as Islamic finance instruments such as sukuk. For large infrastructure projects, the ability to combine different sources of capital is particularly important. These can include financing from international financial institutions and banks, funds from strategic...