Uzbekistan - The Times Of Central Asia

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ACWA Power to Build Green Hydrogen Plant

The Ministry of Investment, Industry and Trade of Uzbekistan on July 10 hosted negotiations between Minister Laziz Kudratov and Mohammad Abunayyan, Chairman of the Board of ACWA Power. The parties discussed implementation of the company’s current portfolio of projects in Uzbekistan and prospects for expansion of investment cooperation in energy and chemical industry, the Uzbek ministry said. Today the investment portfolio of the Saudi company in Uzbekistan includes 8 projects with a total cost of over 6.8 billion USD and design capacity of more than 5.5 GW. It was emphasized that the success of the company plays an important role in promoting Uzbekistan as a comfortable investment destination and a leading center for introduction of renewable energy sources in the Central Asian region. Constructive exchange of views was held on topical issues relating to implementation of current projects on construction of a combined cycle power plant in Syrdarya region with a capacity of 1.5 GW, wind power plants in Bukhara region and Republic of Karakalpakstan with a total capacity of 2.6 GW and solar power plants in Samarkand and Tashkent regions with a capacity of 1.4 GW. An agreement was reached to take a set of practical measures to ensure accelerated commissioning of the projects. A number of new initiatives were considered separately. Thus, the parties welcomed the completion of necessary procedures and reaching new agreements on the project of construction of a plant for the production of "green" hydrogen, with a capacity of 3 thousand tons per year. The start of construction works is scheduled for the fall of this year. In addition, a discussion was held on the prospects for accelerating the project of localization of equipment production for wind turbines. Each of the parties stressed that the implementation of this project in Uzbekistan will significantly expand the geography and volume of renewable energy sources and increase the availability of these technologies in the domestic market.

Kazakhstan and Uzbekistan to Bring Mutual Trade to $10 Billion

On November 9th, Alikhan Smailov, the Prime Minister of Kazakhstan, made an official visit to Tashkent, Uzbekistan, for the 16th summit of the Economic Cooperation Organization. Prior to the event, he met with the President of Uzbekistan, Shavkat Mirziyoyev. During their meeting, Smailov extended warm greetings from the President of Kazakhstan, Kassym-Jomart Tokayev, and highlighted the strong strategic partnership between the two nations, based on trust and mutual understanding3. Smailov pointed out that "Uzbekistan is one of the largest trade partners of Kazakhstan. Our countries account for about 70% of all trade in Central Asia. At the end of last year, trade turnover increased by 30%, and for the first time reached the milestone of $5 billion. We are actively working to bring mutual trade to $10 billion”. Mirziyoyev reciprocated the sentiment, noting that the strategic agreements between Kazakhstan and Uzbekistan were being systematically realized across various sectors, including trade, transportation, and water management5. He added, “All issues we have are moving forward; I think there is not a single unresolved issue. In terms of trade, the projects we have agreed on with the President of Kazakhstan will help us reach new frontiers”. In line with these discussions, Arman Shakkaliev, Kazakhstan’s Minister of Trade and Integration, and Laziz Kudratov, Uzbekistan’s Minister of Investment, Industry and Trade, signed an agreement to regulate the activities of the International Centre for Industrial Cooperation “Central Asia”7. This center, set to be established on the border of the two countries, will house production sites, warehouses for goods and equipment storage, and transport infrastructure. The aim is to expedite cargo delivery and reduce logistics costs. The Industrial Cooperation Centre is expected to stimulate the creation of new production facilities and jobs, aid in the processing of agricultural and industrial products, and provide logistics services for goods transportation. It's hoped that the centre will enhance transport efficiency and expedite customs clearance processes. The signing of this agreement is a practical step towards the realization of the project. The launch of the Industrial Cooperation Centre is poised to serve as a catalyst for the further development of international trade and economic integration between Kazakhstan and Uzbekistan. It's also projected to contribute to increasing bilateral trade turnover to up to $10 billion.

Uzbek Citizen Imprisoned for Enlisting with Russian Forces in Ukraine

According to RFE/RL's Uzbek Service, the first Uzbek national has been sentenced to prison for joining Russian forces in the conflict in Ukraine's Donetsk region between 2014 and 2015. Relatives of Ildar Khairulin informed RFE/RL on October 30th that the 38-year-old received a five-year prison sentence last week after a court found him guilty of serving as a mercenary. Khairulin's family refuted any claims of his presence in Ukraine, asserting that all accusations against him were based on erroneous information provided by the Kyiv-based NGO, Myrotvorets (Peacemaker). The NGO aims to inform local law enforcement about alleged crimes committed against Ukraine by foreign citizens.

Central Asia Particularly Vulnerable to Climate Risks, Primarily Due to Water Scarcity, Says EDB

By 2050, the available resources in the Syr Darya and Amu Darya basins – the region’s two largest sources of water - situated in southern Kazakhstan and along Uzbekistan’s southern border with Turkmenistan - could decrease by 10% to 15%. Water shortages inevitably impact the region’s agricultural sector, which relies on water as a critical factor in food production, the Eurasian Development Bank (EDB) has stated in a news release. The reduction in wheat yields in seven oblasts of Kazakhstan could result in direct economic losses exceeding U$1.2 billion by 2030. These concerns were highlighted by Conrad Albrecht, Managing Director and Head of the Directorate of Sustainability at the Eurasian Development Bank (EDB) during the recent Seventh North and Central Asia Multistakeholder Forum on the Implementation of the SDGs in Almaty. “Kazakhstan, being the only Eurasian nation to have implemented a carbon pricing system, faces the additional challenge of a potential carbon tax amounting to U$250 million. Most economies in the region rely heavily on carbon-intensive industries, necessitating a transition towards more sustainable production methods”, Albrecht said. He also pointed out that the region’s carbon dioxide (CO2) emissions significantly exceed its contribution to the global economy in terms of both GDP and population. However, countries such as Armenia, the Kyrgyz Republic, Tajikistan and Uzbekistan have a share of global CO2 emissions lower than their share of the world’s population, indicating that the region’s economies are critically carbon intensive. “All countries in the Eurasian region are taking climate change extremely seriously, acknowledge their direct contribution to the global agenda and are ready to make ambitious commitments to decarbonization”, Albrecht stressed. “Nevertheless, Central Asian countries still require substantial support from multilateral development banks, and while climate finance to the region is increasing, it remains significantly smaller compared to other low- and middle-income countries”.

Promoting Sustainable Development in Central Asia: Key Highlights from the Eurasian Development Bank’s Roundtable

According to a press release issued by the Eurasian Development Bank (EDB), on November 16th, 2023, Almaty, Kazakhstan, served as the venue for a critical roundtable hosted by the EDB, titled "Promoting Sustainable Development in Central Asia". This gathering saw the participation of representatives from a wide range of international organizations and multilateral development banks. Attendees included the likes of the World Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Islamic Development Bank, FAO, UNIDO, UNEP, ESCAP, UNDP, the World Health Organisation, the International Fund for Saving the Aral Sea, and CICA. The agenda was packed with discussions revolving around irrigation, water challenges, environmental and social standards of international financial institutions, and case studies that showcased collaborations in project implementation12. The EDB's latest report, "Efficient Irrigation and Water Conservation in Central Asia", was introduced during the roundtable's first session. Nikolai Podguzov, Chairman of the EDB Management Board, underscored the essential interrelationship between water, food, and energy in Central Asia. He declared the development of the region’s water and energy resources as a strategic priority for the EDB. He also expressed concerns over an impending water deficit in Central Asia within the next five years, urging for collective action supported by multilateral development banks3. Tatiana Proskuryakova, the Regional Director for Central Asia at the World Bank, also spoke at the event. She emphasized the importance of sustainable development in Central Asia to international organizations and multilateral financial institutions. She revealed that the World Bank has allocated approximately a quarter of its $12 billion investment portfolio in Central Asia to water, energy, and environmental sectors. This proportion is expected to rise to almost half in the near future4. Following this, Evgeny Vinokurov, EDB Chief Economist, presented the study "Efficient Irrigation and Water Conservation in Central Asia". He proposed a ten-step solution to address the prevalent issues. The steps include establishing an International Water and Energy Consortium; fostering collaboration among multilateral banks; creating a regional cluster to produce irrigation equipment; consolidating efforts to strengthen cooperation with Afghanistan; using PPP instruments; instituting proper water accounting; gradually integrating investment charges into the tariff structure; improving land conditions; implementing digital technology, and leveraging state-of-the-art irrigation technology and laser levelling.

What Will the Future Hold for Uzbekistan’s Gas Problems?

What Will the Future Hold for Uzbekistan’s Gas Problems? Can the infrastructure of Uzbekistan carry the country into a geopolitical resource hub? The country has certainly benefited from energy exports: In terms of available reserves, Uzbekneftegaz remains the sacred cow of the state, which has generated significant foreign exchange earnings. Prime Minister Abdulla Aripov even started to switch industrial enterprises “of no social significance” from natural gas to coal so that more gas would be available for export. In 2019, natural gas was sold on the domestic market at a price of US$118 per thousand cubic meters while Uzbekistan sold gas for export at US$145 per thousand cubic meters. The money came in foreign currency. The conversion of small and medium-sized businesses (such as restaurants and factories for the production of building materials) to coal made it possible to free up over 2.1 billion cubic meters of gas, that is, around US$315 million. On the other hand, gas supply on the domestic market left much to be desired. During the winter period, temperatures unexpectedly dropped below -20 degrees Celsius. Due to a lack of heat in residential buildings in November and December in several regions like Andijan, Karakalpakstan, Nukus, Fergana and Khorezm, the population began to attend unauthorized rallies. In 2020, the Ministry of Energy reluctantly admitted that there was a shortage of gas due to depletion of gas fields. On December 16, 2020, the government decided to reduce the export of gas and direct it towards domestic needs. That said, exports were being reduced even earlier than this. In fact, the first reports of the suspension of fuel supplies to other countries appeared in March 2020, when the global COVID-19 pandemic began and the main gas consumer, China, reduced imports from Uzbekistan. In 2021, Uzbekistan once again experienced extremely low air temperatures. Gas exports were again limited. Even though Deputy Chairman of Uzbekneftegaz, Bakhodir Sidikov, said that fuel reserves would last for several decades (in his words, “We have very large, promising areas for geological exploration, but the current approved hydrocarbon reserves will last for 20-30 years”) the coming months proved that these forecasts to be overly optimistic. Soon after, the Ministry of Energy announced that even with limited exports, Uzbekistan lacked about 20 million cubic meters of gas per day. On the night of December 31, 2022, supplies to Uzbekistan from Turkmenistan stopped due to burst gas pipelines. Unusual frosts caused increased gas consumption, resulting in a shortage of fuel for power plants and boiler houses. The country began experiencing long-term power outages, problems with heating, hot water, and gas pressure in homes. Against the backdrop of the emerging energy shortage, the authorities were forced to close gas stations and industrial enterprises in order to distribute the remaining gas to the population and social facilities. And thus, what was already known by many Uzbeks became apparent to the rest of the world. More than half of the gas pipelines in Uzbekistan (45 thousand km) were laid more than...