Uzbekistan Business & Economy - The Times Of Central Asia

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Gas Exploration

Uzbek Companies Begin Gas Exploration at Afghanistan’s Toti-Maidan Field

Uzbek companies have received official licenses from Afghanistan to explore and produce hydrocarbons, Uzbek Energy Minister Jurabek Mirzamakhmudov announced in a documentary titled The Path of a New Uzbekistan - A Truth Recognized by the World, broadcast on Uzbekistan 24. According to Mirzamakhmudov, Afghan authorities have granted Uzbek firms the right to conduct geological exploration and develop hydrocarbon deposits on Afghan territory. Work began in mid-September at the Toti-Maidan gas field in Jowzjan province under a 25-year contract signed with the Uzbek company Eriell KAM. “This will be the first stage,” Mirzamakhmudov said, as quoted by Uzbek media. “Depending on the results, we plan to expand cooperation to new sites. The project is being implemented as an initiative that will benefit both the Uzbek and Afghan economies.” The Toti-Maidan field spans approximately 7,500 square kilometers and includes around 30 wells, according to Afghanistan’s Ministry of Mines and Petroleum. Uzbekistan is expected to invest about $100 million annually over the next decade, with plans to process the extracted gas domestically. Mirzamakhmudov emphasized that the initiative reflects Uzbekistan’s growing role in regional energy cooperation and aligns with its policy of fostering mutually beneficial ties with neighboring countries. He noted that the project aims to support local industry development and job creation in both nations. In August 2025, Uzbek and Afghan energy companies signed a series of agreements in Kabul to implement four major infrastructure projects. These include the construction of a 500-kilovolt Surkhan-Dasht-e Alwan transmission line, substation expansions in Arghandeh and Nangarhar, and upgrades to the Kabul-Nangarhar power corridor.

Gold

Central Banks Add 15 Tons of Gold in August, Led by Uzbekistan and Kazakhstan

Global central banks added a net 15 tons of gold to their reserves in August, according to the World Gold Council (WGC), citing data from the International Monetary Fund and national central banks. The figure matches the monthly average recorded between March and June, indicating a return to purchasing after a brief pause in July, when reserves remained unchanged due to Indonesia’s 11-ton sale. The WGC observed that although record-high gold prices in 2025 may have tempered some central bank activity, demand remains resilient. “The recent slowdown in buying does not necessarily signal that central banks are losing interest in gold,” the report stated. A full third-quarter review of global gold demand will be published on October 30. Countries expanding their gold holdings in August included Kazakhstan, Uzbekistan, Turkey, China, Bulgaria, Ghana, and the Czech Republic. The National Bank of Kazakhstan led the gains with an 8-ton increase, its sixth consecutive month of accumulation, raising its reserves to 316 tons. The Central Bank of Uzbekistan added 2 tons, lifting its total to 366 tons, although this remains 17 tons below its level at the end of 2024. Turkey and China each purchased 2 tons, bringing Turkey’s total reserves to 639 tons and China’s to over 2,300 tons. Bulgaria’s 2-ton acquisition marked its largest monthly increase since 1997, bringing its holdings to 43 tons ahead of its planned eurozone accession in January 2026. The Czech National Bank also added 2 tons, continuing an uninterrupted buying streak for the 30th consecutive month and raising its reserves to 65 tons. Only two countries, Russia and Indonesia, reduced their holdings in August. Russia sold 3 tons, reportedly for its coin-minting program, while Indonesia offloaded 2 tons. Uzbekistan has remained one of the most active gold purchasers globally. In January 2025, it topped the WGC’s list by acquiring 8 tons, which brought its reserves to 391 tons, representing approximately 82% of its total international reserves.

Aviation

Uzbekistan Signs $5.9 Billion Deal to Build Central Asia’s First Green Aviation Fuel Plant

Allied Biofuels FE LLC Uzbekistan has signed key land and water agreements with the Khorezm regional government, marking a significant step toward building Central Asia’s first integrated biorefinery for zero-carbon aviation fuel. The announcement was made during the International Investment Forum in Khiva, where Khorezm Governor Jurabek Rakhimov met with a company delegation led by Chairman and Managing Director Alfred Benedict. The $5.9 billion project will be located in Tuproqqal’a district in the city of Khorezm, and aims to establish a climate-aligned aviation fuel supply chain in Uzbekistan. Once operational, the facility is expected to produce 382,000 tonnes of Sustainable Aviation Fuel (SAF), 152,000 tonnes of Electro-Synthetic SAF (e-SAF), and 11,000 tonnes of renewable green diesel annually. The refinery will be supported by 2 GW of PEM electrolysers, making it one of the largest initiatives of its kind in the region. Benedict described the agreements as “a landmark moment for Allied Biofuels and for Khorezm,” emphasizing that the project combines international expertise with local support to help Uzbekistan achieve its net-zero emissions target by 2030. “This facility will not only supply sustainable aviation fuel at scale but also foster economic growth in the region,” he said. Uzbekistan has committed to becoming carbon-neutral by the end of the decade, and the Khorezm biorefinery is expected to play a central role in that transition. By producing zero-carbon fuels for transport and industry, the project aims to reduce fossil fuel dependency and lower greenhouse gas emissions. Rakhimov welcomed the decision to site the project in Khorezm, highlighting its significance for regional development. He stated that the initiative will create hundreds of skilled jobs, strengthen Khorezm’s position as a hub for green energy, and boost the local economy. Rakhimov also pledged to personally oversee the allocation of land and infrastructure needed to ensure successful implementation.

Domestic Development

Central Asia and Regional Integration: Logistics, Water, Energy

Central Asia is undergoing a profound transformation, where questions of domestic development and the region’s ability to act in a coordinated way are coming to the forefront. For many years, Central Asian states were viewed as fragmented, each pursuing separate strategies that often put them in competition. Today, however, shared challenges and growing interdependence are making gradual convergence increasingly likely. The region now confronts common pressures such as water scarcity, energy imbalances, environmental degradation, and the fallout of instability in Afghanistan -- issues that no single country can effectively address in isolation. Increasingly, regional platforms such as the Interstate Commission for Water Coordination (ICWC) are being leveraged to mediate water-energy tradeoffs, while joint initiatives in transport, transit, and energy infrastructure foster new integration. Moreover, leading actors like Kazakhstan and Uzbekistan are pushing coordinated strategies -- modernizing rail and aviation links, coordinating transboundary water allocations, and exploring nuclear cooperation -- that point toward a more interconnected regional future. Shared Challenges and Points of Convergence The region faces problems that no country can solve alone. These include water shortages, energy imbalances, environmental risks, and instability in Afghanistan. Such challenges can be seen as both threats and opportunities, since they also represent areas of overlapping interest. Joint action in these fields can deliver more than fragmented national strategies. Water is particularly important, remaining one of the most sensitive issues in interstate relations. Yet it also offers opportunities for coordinated action through existing regional platforms, such as the Interstate Commission for Water Coordination of Central Asia. The “water for energy” model is increasingly seen as a practical tool, already under discussion and applied in bilateral and multilateral projects. Environmental issues are similarly shared. The disappearance of the Aral Sea, land degradation, air pollution, and glacier melt create threats that transcend national borders. Joint monitoring, data exchange, and coordinated adaptation measures, particularly within the United Nations Regional Centre for the Sustainable Development Goals for Central Asia and Afghanistan, opened in August 2025 in Almaty, could become a new direction for regional cooperation. Afghanistan remains another risk factor that affects the security of the entire region. At the same time, transportation and energy projects linking Central Asia with South Asia through Afghan territory can turn a challenge into an opportunity. Reducing instability and integrating Afghanistan into regional trade and transit networks serves the interests of all Central Asian states. Kazakhstan and Uzbekistan as leading forces To understand how closer integration might work in practice, it is useful to examine the strategies of the region’s two key players: Astana and Tashkent. The major agreements concluded by Kazakhstan and Uzbekistan with the United States in transport and aviation should be viewed not as isolated deals, but as evidence of the complementary strengths of the two largest economies in Central Asia. Kazakhstan signed its largest locomotive contract to date with U.S. company Wabtec, a $4.2 billion agreement for 300 TE33A freight locomotives to be assembled at the Wabtec Kazakhstan plant in Astana, along with servicing support. This will modernize...

Trade

Electronic Queue System Launched at Key Kyrgyz-Uzbek Border Crossing

An Electronic Queue Management System (e-QMS) has been launched at the Dostuk border crossing, the primary checkpoint between Kyrgyzstan and Uzbekistan along the Osh-Andijon road. The initiative, developed through cooperation between the Kyrgyz government, the European Union, and the International Trade Centre (ITC), is part of the “Ready4Trade Central Asia” project (2024-2028), which aims to streamline trade procedures and boost economic competitiveness across the Trans-Caspian Transport Corridor. Funded by the European Union, the project is designed to simplify cross-border operations and improve conditions for small and medium-sized enterprises. The e-QMS platform, developed by the ITC in collaboration with Kyrgyzstan’s State Customs Service and Ministry of Economy and Commerce, allows transport operators to pre-book border crossing times online or via a mobile app. The system is expected to reduce waiting times, ease congestion, and improve the predictability of border transit, benefiting both carriers and customs authorities through greater transparency, efficiency, and safety. “For Kyrgyzstan, the implementation of e-QMS is a cornerstone in creating a business-friendly environment for exporters. The new system simplifies procedures, reduces costs for exporters and carriers, and makes trade more transparent and efficient,” said Iskender Asylkulov, Kyrgyzstan's Deputy Minister of Economy and Commerce. The system was initially piloted at the Kyzyl-Kiya border crossing in November 2024, where it processed more than 12,000 vehicles in its first six months. Following positive feedback from transport operators and significant reductions in wait times, the system has now been expanded to Dostuk, one of the region’s busiest crossings. In 2024 alone, over 87,000 vehicles passed through Dostuk, including more than 21,000 import consignments, nearly 8,000 export shipments, and over 58,000 transit movements. The deployment of the e-QMS is expected to further boost trade between Kyrgyzstan and Uzbekistan, which reached $846 million in 2024. From January to June 2025, bilateral trade turnover totaled $430.2 million, $50 million more than during the same period in 2024, according to data from Uzbekistan’s National Statistics Committee.

Nuclear Power

Uzbekistan Plans Full Launch of Large Nuclear Power Plant by 2035

Uzbekistan plans to fully launch a high-capacity nuclear power plant by 2035, according to Azim Akhmedkhadjaev, director of the “Uzatom” agency. Speaking on September 25 at World Atomic Week in Moscow, Akhmedkhadjaev said the first small modular reactor is expected to begin operations in 2029 in the Jizzakh region, followed by a second unit six months later. The large-scale plant will see its first reactor come online in 2033, with full capacity expected by 2035. He noted, however, that final timelines depend on the conclusion of outstanding contract agreements. Akhmedkhadjaev confirmed that production of reactor equipment is already underway and that the project is proceeding on schedule. Responding to a question from a Spot correspondent, he reiterated the target dates for the larger reactors and emphasized that the timeline will be refined once contracts are finalized. The announcement aligns with Uzbekistan’s broader nuclear energy strategy. As previously reported by The Times of Central Asia, the country plans to build both small modular and larger reactors at a single integrated nuclear facility. Under a revised agreement with Russia, Uzbekistan intends to construct two large VVER-1000 reactors alongside two smaller RITM-200N units. The initial framework for the project was established in 2018 and updated in 2024. Earlier this year, The Times of Central Asia reported that Rosatom had begun manufacturing reactor components for the smaller units, with the first steel castings for the RITM-200N already produced in Saint Petersburg. Uzbekistan’s pivot to nuclear energy is part of its strategy to meet rapidly increasing electricity demand, which is projected to reach 135 billion kWh by 2035, nearly double current consumption levels. To address this, the government is expanding generation capacity and modernizing the national grid. While the plans are ambitious, challenges remain. As Akhmedkhadjaev acknowledged, the full implementation timeline depends heavily on contract finalization. Nevertheless, Uzbekistan’s dual-track approach, combining scalable small reactors with large base-load units, suggests a strategic commitment to energy security and diversification.