Uzbekistan Business & Economy - The Times Of Central Asia

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Uzbekistan’s Foreign Debt Climbs to $64.1 Billion in 2024

Uzbekistan’s total external debt rose to $64.1 billion in 2024, accounting for 55.7% of the country’s gross domestic product (GDP), according to a new report from the Central Bank on the balance of payments, international investment position, and external debt. This marks an increase from 51.9% at the end of 2023. The country’s external debt includes both public and private liabilities, though many private-sector entities, particularly in banking and industry, are partially or wholly state-owned. The government controls approximately 65% of the banking sector and holds stakes in major enterprises such as UzAuto Motors and Uzbekneftegaz. These companies, along with state-owned banks like the National Bank of Uzbekistan (NBU) and Uzpromstroybank, have collectively issued billions in debt over recent years. Corporate (or private sector) external debt rose by $6.6 billion to $30.2 billion, equivalent to 26.2% of GDP. Government debt increased by $4.2 billion, reaching $33.9 billion, or 29.5% of GDP. Since 2016, Uzbekistan’s external debt has expanded 4.4 times, from $14.7 billion to $64.1 billion. Corporate debt has nearly quadrupled during that period, while government debt has grown by a factor of 5.2. Although the growth rate of public external debt has decelerated in recent years, corporate debt, primarily borrowed by state-owned banks and companies, continues to rise sharply. According to projections from the Ministry of Economy and Finance, Uzbekistan’s public debt is expected to reach $45.1 billion by the end of 2025, representing 36.7% of projected GDP. By the end of 2024, public debt is estimated to total $39.7 billion.

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U.S. Tech Giant Honeywell Expands Operations in Uzbekistan

Honeywell, a global leader in integrated technology solutions, has expanded its footprint in Uzbekistan by establishing a new legal entity, Honeywell Industrial Automation LLC. The initiative aims to support the digital transformation and automation of key industrial sectors in Uzbekistan and reflects a broader commitment to strengthening U.S.-Uzbek commercial ties. The official launch was celebrated on March 25 at a reception hosted by U.S. Ambassador to Uzbekistan Jonathan Henick at his residence in Tashkent. The event was attended by Uzbekistan’s Minister of Energy, Jurabek Mirzamakhmudov. Ambassador Henick reiterated the U.S. Embassy’s strong support for Honeywell’s initiatives, stating he looked forward to "the continued growth and success of American businesses in Uzbekistan." Honeywell emphasized its dedication to advancing Uzbekistan’s digital and energy strategies. The company has long-standing partnerships with both government and private sectors, especially in oil and gas, petrochemicals, mining, and metallurgy. As part of its expansion, Honeywell announced plans to establish a Global Engineering Center (GEC) in Tashkent. The new center will serve as a regional hub for advanced engineering solutions, while also fostering local talent and innovation. Earlier, Honeywell representatives held talks with the leadership of Uzbekneftegaz JSC to discuss the integration of cutting-edge technologies into Uzbekistan’s oil and gas sector.

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Uzbekistan Aims to Save 1.1 Billion Cubic Meters of Gas in 2025

Uzbekistan’s Statistics Committee has released data on industrial production for January and February 2025, revealing a continued decline in natural gas output. During this period, the country produced 7.37 billion cubic meters of gas, down 329 million cubic meters (4.2%) from the same period in 2024 and 781 million cubic meters compared to 2023. Depleting Reserves and Rising Demand Azim Ahmadkhadjayev, head of the state nuclear agency Uzatom, attributed the decline to the depletion of existing gas fields and delays in developing new ones. Simultaneously, Uzbekistan’s industrial production is accelerating, driving up energy demand. “The existing fields are running out. Discovering and developing new reserves requires substantial investment. Work is underway, but the transition takes time,” Ahmadkhadjayev told the Alter Ego project. He also emphasized that the future expansion of nuclear energy would reduce reliance on gas. Amid these challenges, the government is prioritizing energy conservation. At a March 26 meeting, President Shavkat Mirziyoyev outlined ambitious goals: saving 1.1 billion cubic meters of natural gas and 2.6 billion kilowatt hours of electricity in 2025. Outdated Infrastructure and Industrial Modernization Many of Uzbekistan’s industrial facilities date back several decades and were not designed with energy efficiency in mind. This outdated infrastructure consumes disproportionate amounts of electricity and gas, leading to regional shortages during peak demand. To address this, the government is modernizing key industries and implementing a dedicated energy-efficiency program for large enterprises. With the population projected to reach 41 million by 2030 and, energy demand expected to grow by 1.5 times, long-term planning is critical. Researchers in Samarkand, Syrdarya, and Jizzakh have identified potential energy savings of 870 million kilowatt hours of electricity and 420 million cubic meters of gas. One proposed measure is replacing 35,000 outdated machines in small and medium-sized factories. Local Energy Initiatives Energy savings are also being pursued at the community level. The government plans to install small solar power plants in 300 neighborhoods, aiming to save 45 million cubic meters of gas in 2025. Additionally, over 1,000 micro hydropower stations are planned on canals and streams to generate supplemental electricity. Street lighting is another major energy consumer, using 200 million kilowatt hours annually. Transitioning to solar-powered lights could halve this consumption. President Mirziyoyev stressed the need for factories to adopt energy-efficient technologies and reduce waste. A new monitoring system will ensure the proper implementation of these energy-saving measures. Focus on Renewables and Public Awareness The government is also promoting energy-conscious behavior among citizens. Simple actions, like turning off unused lights or installing solar panels, can collectively contribute to national energy goals. Particular attention is being paid to the densely populated Fergana Valley. A tailored energy plan is being developed for the region, with successful strategies to be expanded nationwide.

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Opportunities and Challenges in Uzbekistan’s Mining Industry

Uzbekistan is well-positioned to become a key global supplier of critical minerals, but the stakes are high. If not managed prudently, the country risks falling victim to the very challenges that have historically plagued resource-rich nations. According to Nodir Ruzmatov, founder of One Nexus Group and a Master’s candidate in Public Policy at UC Berkeley, Uzbekistan faces a pivotal moment. In his article, “Striking Gold or Courting Disaster in Uzbekistan’s Mining Boom,” Ruzmatov writes: “Uzbekistan stands at a crossroads. Global demand for critical minerals, key to clean energy and high-tech manufacturing, is growing at an unprecedented rate. With gold, copper, lithium, and rare earth elements in abundance, Uzbekistan has an opportunity to become a major global supplier. But as history has shown, such riches can be a double-edged sword.” Rising Demand, Rising Stakes Global demand for critical minerals has surged due to the rapid expansion of electric vehicles, renewable energy systems, and digital infrastructure. Uzbekistan, already a top gold producer and an emerging copper exporter, holds significant reserves of the minerals needed to power the global energy transition. Properly harnessed, this sector could attract billions in investment, create thousands of jobs, and elevate Uzbekistan’s standing in the global economy. Yet, the path forward is fraught with risks. Ruzmatov warns of the “resource curse”, a paradox where natural wealth leads to economic mismanagement, environmental degradation, and political instability. The Syr Darya River serves as a cautionary example: already burdened by industrial waste from neighboring Kazakhstan, it now faces growing contamination from heavy metals, arsenic, and other toxins. These pollutants threaten agriculture, food security, and public health across the region. Learning from Global Experience Ruzmatov draws parallels between Uzbekistan’s situation and water management conflicts in other parts of the world. Disputes over the Colorado River between the United States and Mexico, and environmental challenges in Southeast Asia’s Mekong River basin, show that resource tensions can be addressed through strong legal frameworks and cross-border cooperation. For Uzbekistan, this means not only protecting its rivers but also developing a governance model that prioritizes environmental integrity, transparency, and regional collaboration. A Sustainable Path Forward To avoid repeating past mistakes, Ruzmatov advocates for: Strict environmental regulations to guide mining operations Investment in cleaner, more efficient technologies Enhanced regional partnerships to manage shared natural resources equitably Greater public involvement and scientific research to inform decision-making As he concludes, “The question is no longer whether Uzbekistan should develop its critical minerals sector but rather how it will do so. The Syr Darya crisis and the Aral Sea disaster serve as stark warnings. If Uzbekistan fails to address its water pollution issues now, the consequences will be irreversible.” Uzbekistan has the potential to lead Central Asia in responsible, sustainable mining. Realizing this potential will depend on careful planning, international engagement, and a long-term commitment to environmental and social resilience.

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Central Asia’s Crypto Gamble: Growth Amid Uncertainty

Central Asian countries are approaching the cryptocurrency and crypto-mining industry at varying speeds. While some are just beginning to explore the sector, others have already taken significant, albeit sometimes contradictory, steps. Kazakhstan: From Mining Powerhouse to Regulatory Caution Kazakhstan once emerged as a global leader in bitcoin mining. Between mid-2021 and early 2022, the country ranked third in the world in terms of bitcoin mining capacity, accounting for 13.22% of global computing power, trailing only the United States and China. This boom was fueled by low electricity costs, favorable tax conditions, and an influx of miners fleeing stricter regulations in China. However, the rapid growth strained Kazakhstan’s energy infrastructure. The Ministry of Energy reported that while annual electricity consumption had previously grown by an average of 2%, in 2021 it surged by 6.1% and up to 12% in the densely populated southern energy zone. Digital mining was cited as the primary cause. By early 2025, Kazakhstan’s share of global mining capacity had dropped to just 1.4%, placing it outside the top five globally. Although around 60 companies are currently active in the sector, some operations have stalled. Tax legislation has tightened since 2022, with miners required to pay 1-2 tenge per kilowatt-hour depending on the energy source. Illegal mining and unlicensed exchanges remain a challenge; in 2024 alone, 12 criminal cases were launched against underground platforms. Despite these setbacks, experts see potential for a more sustainable and regulated industry. The Astana International Financial Center (AIFC) has become the hub for cryptocurrency operations. A 2023 law on digital assets and updated rules from the Astana Financial Services Authority (AFSA) in 2024 have laid a more comprehensive legal foundation, including provisions on cybersecurity and anti-money laundering. Over 10 licensed cryptocurrency exchanges now operate in Kazakhstan, including global names like Binance, Bybit, and Bitfinex Securities. New initiatives such as the digital tenge and the Cryptocard aim to further integrate blockchain into daily financial transactions. President Kassym-Jomart Tokayev reaffirmed the government's commitment to digital transformation in March 2025: “The development of the digital asset industry and blockchain technology plays a major role. Urgent measures must be taken to liberalize regulation, ensure the legal circulation of digital assets and crypto exchanges, and attract investment in digital mining,” he said. Uzbekistan: State-Supported Growth Uzbekistan has made blockchain and digital assets a policy priority. The National Agency for Perspective Projects (NAPP) is the main regulatory body. Between 2022 and 2024, the agency issued 14 licenses to cryptocurrency companies. The UzNEX exchange, an internationally licensed platform, has played a key role in developing the crypto market in both Uzbekistan and the wider region. Its services include crypto asset trading, staking, and NFT transactions. In 2024, it expanded its list of supported cryptocurrencies (including Toncoin) and plans to launch a digital art platform. Total trading volume exceeded $1 billion in 2024. Kyrgyzstan: Building a Legal Framework Since 2022, Kyrgyzstan has actively developed its regulatory environment for digital assets. The key legislation is the Law on Virtual Assets, which outlines...

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Uzbekistan Looks to Nuclear Power for Energy Security

Uzbekistan is moving forward with plans to build its first nuclear power plant, a project that officials say is critical to the country’s long-term energy security. In an interview with the Alter Ego YouTube project, Azim Akhmadkhodjaev, head of Uzbekistan’s Atomic Energy Agency, argued that nuclear power is the only viable alternative to continued reliance on imported fossil fuels. “Let’s continue to import high-calorie coal, burn it, and poison our environment. Let's import tens of billions of cubic meters of gas and spend money on it. Or we can build a few nuclear power plants, reduce the cost of electricity, and become energy independent. Will we achieve energy independence? Undoubtedly, yes,” Akhmadkhodjaev said. A Strategic Partnership with Global Players The nuclear power project is being developed with Russian technical support, but Akhmadkhodjaev emphasized that this does not compromise Uzbekistan’s sovereignty. The plant will be fully owned and operated by Uzbekistan, with local specialists overseeing daily operations. “The nuclear island will be Russian because this technology is the most reliable and proven. However, the automated control system will be based on European technology, and the turbine equipment will be made in Europe or China,” he explained. In addition to Russian expertise, Uzbekistan is engaging with several French companies. Negotiations are ongoing with Assystem for technical support, Bureau Veritas for training specialists, and Framatome for managing key technical aspects of the project. Balancing Energy Sources While pursuing nuclear energy, Uzbekistan is also working to boost the share of renewables in its energy mix, from 16% today to 54% by 2030. Energy analysts say that a diversified portfolio, combining nuclear and renewable sources, will help the country meet its energy needs while minimizing environmental harm.