Uzbekistan Business & Economy - The Times Of Central Asia

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Electricity

Afghanistan Generates 250 MW of Electricity, Imports 800 MW from Central Asia and Iran

Afghanistan’s state-owned electricity company, Da Afghanistan Breshna Sherkat (DABS), has signed or prepared agreements for domestic power generation projects totaling 1,070 megawatts over the past 11 months, with 70% of the funding coming from foreign investors, TOLOnews reported. Speaking in an interview, DABS chief Abdulbari Omar said the initiative marks a significant step toward energy self-sufficiency after years of underinvestment in the sector. “In the past 11 months, we have invested 69 billion Afghanis ($1.01 billion), 70% of which came from abroad. This shows we have encouraged foreign investors to enter the Afghan market,” he said. Afghanistan currently produces about 250 MW of electricity domestically and imports around 800 MW from Turkmenistan, Iran, Uzbekistan, and Tajikistan, at an annual cost of $250-280 million. Omar said the country would need between 6,000 and 7,000 MW to meet domestic demand, rising to 10,000 MW if industrial activity expands. He acknowledged the challenges of developing power from wind, water, gas, coal, and waste, but stressed that projects are moving forward with domestic funds and private investment, without relying on the World Bank or other international organizations. Omar also highlighted the problem of unpaid bills, citing 450 million Afghanis ($6.48 million) owed by former political leaders and warlords. “All individuals, from ministers to ordinary citizens, are treated equally under the law,” he said, noting that power has been cut to ministers who failed to pay. Last year, The Times of Central Asia reported that DABS extended its electricity import agreement with Uzbekistan until the end of 2025. The deal, signed in Uzbekistan by Omar and the National Electricity Company of Uzbekistan, remains vital for meeting Afghanistan’s needs. According to the Taliban-controlled Ministry of Energy and Water, Afghanistan requires around 1,500 MW of electricity, with roughly 720 MW imported and the rest generated domestically.

Bilateral Trade

China-Central Asia Trade Nearly Triples Since 2020

Trade between China and the countries of Central Asia reached $66.2 billion in 2024, nearly triple the 2020 level, according to the Eurasian Development Bank (EDB). Imports from China accounted for about 60% of total trade turnover. China’s largest trading partner in the region is Kazakhstan, with bilateral trade valued at $30.1 billion (46% of total China-Central Asia trade), followed by Uzbekistan at $18 billion (27%) and Turkmenistan at $10.6 billion (16%). China’s share in Central Asia’s overall trade turnover has risen sharply, from 17.7% in 2020 to 24.1% in 2024. However, the level of dependence on Chinese trade varies by country: Turkmenistan - 55% of its total trade is with China. Kyrgyzstan - around 35%. Kazakhstan, Uzbekistan, and Tajikistan - between 20-22%. The EDB estimates significant untapped trade potential of $39.3 billion, about 60% of the current turnover. This includes $32 billion in potential Chinese exports to Central Asia (such as automobiles, electronics, and consumer goods) and $7.3 billion in potential Central Asian exports to China (including copper products, gold, and uranium). With deepening economic ties and major infrastructure links through the Belt and Road Initiative, analysts expect China-Central Asia trade to continue expanding in the coming years.

Middle Corridor

Tentative Armenia-Azerbaijan Plan Could Boost the Middle Corridor for Central Asia

A tentative U.S.-facilitated agreement between Armenia and Azerbaijan could open a new transport route through Armenia’s southern Syunik region, linking mainland Azerbaijan to its exclave of Nakhchivan and onward to Türkiye. Armenian Prime Minister Nikol Pashinyan has confirmed that Washington proposed managing a 32-kilometer corridor through Syunik to connect the two Azerbaijani territories. While this outline has been discussed publicly, the legal and operational details remain undisclosed, and officials say more information will be released if the agreement is finalized. According to U.S. mediators and regional leaders, the route is part of ongoing efforts to normalize Armenia-Azerbaijan relations after decades of conflict. A U.S. official told reporters the plan could “open Armenia to the world” by providing new options for regional trade and transit. Both sides stress that key issues—such as governance, security, and financing—still need resolution. The corridor is one of the main sticking points in peace talks: Azerbaijan wants it free from exclusive Armenian control, while Armenia rejects any arrangement that would compromise its sovereignty. If realized, the route could become a new link in the Trans-Caspian “Middle Corridor”, which connects Central Asia to Europe via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Türkiye. It would offer Kazakhstan, Uzbekistan, and Turkmenistan an additional westward route, bypassing Russian and Iranian territory. Traffic along the Middle Corridor has grown rapidly as shippers sought alternatives to northern routes. Cargo volumes along the Middle Corridor increased markedly—from around 600,000 tons in 2021 to approximately 1.5 million tons in 2022, representing a 2.5-fold rise and climbed further to approximately 4.1 million tons by late 2024. The EU has committed billions of euros to upgrade ports, railways, and logistics hubs, and the World Bank forecasts the volumes potentially reaching up to 11 million tonnes per year. route’s freight volumes could triple by 2030. An Armenian segment could further cut transit times and build redundancy, improving supply chain resilience for Central Asia. The proposal’s framing as a U.S.-supported project signals a shift in South Caucasus diplomacy. Russia has long mediated between Armenia and Azerbaijan, but its influence has waned amid the war in Ukraine. Olesya Vartanyan, a South Caucasus expert at the International Crisis Group, told AP News, “Russia has been left on the sidelines, because the Kremlin has nothing to offer to Armenia and Azerbaijan.” The initiative also concerns Iran, which fears losing its role as a north–south transit hub. For Central Asia, the corridor could add a politically diversified channel for exports, reinforcing “multi-vector” trade strategies. It would provide new access to Turkish and European markets, potentially strengthening regional bargaining power. The proposed corridor is expected to include rail transport as well as oil and gas pipelines and fiber‑optic cables, though construction would be carried out by private firms under a U.S.-negotiated lease agreement as reported by PanArmenian news service. This could allow Caspian energy exports from Kazakhstan and Turkmenistan to reach Türkiye and Europe more directly, and improve Central Asia’s digital connectivity by reducing reliance on Russian telecom routes. However, no technical designs...

Eurasian Transport Network

EDB Database Reveals How Crucial Central Asian Countries Are To Eurasian Transport Network

The Eurasian Development Bank (EDB) has unveiled the Eurasian Transport Network Observatory, a comprehensive database monitoring infrastructure development across 13 countries in the region: Azerbaijan, Armenia, Afghanistan, Belarus, Georgia, Iran, Kazakhstan, Kyrgyzstan, Mongolia, Russia, Tajikistan, Turkmenistan, and Uzbekistan. As of July 1, 2025, the database includes 325 infrastructure projects both ongoing and planned, with a total estimated investment of $234 billion. Over 51% of these projects are in the road transport sector. Russia accounts for seven of the ten largest infrastructure projects within the network. The Northern Eurasian Corridor is the most capital-intensive, requiring $78 billion, more than one-third of the network’s total projected investment. Central Asia plays a pivotal role, representing over 22% of total investments in the Eurasian Transport Network. The region hosts or plans 90 infrastructure projects valued at approximately $53 billion. Kazakhstan alone accounts for roughly 44% of these initiatives. Nearly two-thirds of Central Asian investments are allocated to highway infrastructure, underscoring the strategic priority placed on enhancing road connectivity to support regional trade and international integration. Top 10 Transport Projects in Central Asia: China-Kyrgyzstan-Uzbekistan Railway - $4.7 billion Tashkent-Andijan Toll Highway (Uzbekistan) - $4.3 billion Balykchy-Kochkor-Kara-Keche-Makmal-Jalal-Abad Railway (Kyrgyzstan) - $4.1 billion North-South Railway (Tajikistan) - $3.9 billion Center-West Highway (Kazakhstan) - $2.6 billion Ashgabat-Turkmenabat Highway (Turkmenistan) - $2.4 billion Serakhs-Mary-Serkhetabat Highway (Turkmenistan) - $2.2 billion Dostyk-Moyinty Rail Section Modernization (Kazakhstan) - $2 billion Sherkhan-Kunduz-Mazar-i-Sharif-Herat-Turgundi Railway (Tajikistan-Afghanistan-Turkmenistan) - $2 billion Zhezkazgan-Arkalyk-Petropavlovsk Motorway Reconstruction (Kazakhstan) The EDB notes that international development banks and other multilateral institutions are well-positioned to offer both technical and financial support, particularly in landlocked and mountainous countries where infrastructure gaps are most acute.

Nuclear Energy

Uzbekistan and Belarus Deepen Nuclear Energy Cooperation

Uzbekistan and Belarus are moving to strengthen bilateral cooperation in nuclear energy, following a high-level meeting in Minsk on August 5. The talks were hosted by Belarusian Energy Minister Denis Moroz and attended by a delegation from Uzbekistan’s Uzatom Atomic Energy Agency, led by Director Azim Akhmedkhadjaev. Discussions covered a broad range of potential collaboration areas, including nuclear infrastructure development, specialist training, radioactive waste and spent fuel management, and integration of nuclear power into national energy systems. “We welcome Uzbekistan’s decision to join the club of states using atomic energy for peaceful purposes and implementing a national nuclear program,” Moroz said, expressing Belarus’s readiness to share its experience. The Uzbek delegation is expected to visit the Belarusian Nuclear Power Plant in Ostrovets, where technical teams from both countries will explore concrete areas for cooperation. Moroz emphasized that the launch of the Belarusian plant has bolstered national energy security and driven innovation in sectors such as electric transport and housing electrification. “The nuclear power plant has become a springboard for Belarus to reach a new technological level,” he said, adding that the facility complies fully with international safety standards. Uzatom Director Akhmedkhadjaev commended Belarus’s progress in the nuclear sector, calling it “advanced and highly successful.” He expressed interest in involving Belarusian experts in Uzbekistan’s nuclear development efforts. The Uzbek delegation also visited the dispatch control center of Belenergo, Belarus’s national energy company, to observe nuclear grid integration in practice. Uzbekistan signed a contract with Russia’s Atomstroyexport, a subsidiary of Rosatom, in May 2024 to build a small modular nuclear power plant in the Jizzakh Region. The design includes six 55 MW reactors with a combined capacity of 330 MW. In February 2025, Uzatom also formed an international consortium to expand its nuclear capacity, incorporating technologies from Russia, China, Europe, and the United States.

Environmental Risk

Economist Raises Concerns Over $5 Billion Sea Breeze Resort Project at Charvak

The Uzbek government has approved the construction of the Sea Breeze Uzbekistan resort complex along the Charvak Reservoir, granting the investor 577 hectares of land on a 25-year lease at a sharply reduced rate. According to a Cabinet resolution, construction may begin even before the completion of project documentation. Tree relocation is expected as part of the development process. The project, led by Russian-Azerbaijani developer Emin Agalarov, envisions a new lakeside tourist destination complete with hotels, villas, swimming pools, sports facilities, restaurants, shops, and a bridge linking both sides of the reservoir. Financial Concerns Raised by Local Economist Uzbek economist and blogger Otabek Bakirov has voiced strong concerns over the project, arguing that while public debate has focused on environmental issues, the financial aspects have not been adequately examined. After reviewing the Cabinet resolution, he raised several questions about investor selection, project financing, lease terms, and the shifting of infrastructure costs onto the state. Questions About Investor Selection The government resolution names Sea Breeze Uzbekistan, a joint venture involving Agalarov’s development firm, as the winner of the site through what it describes as the “best proposal.” Bakirov questioned whether other bids were solicited or evaluated and whether any Uzbek partners hold ownership in the project. He noted that the resolution lacks information about the local share. Skepticism Over Project Financing Bakirov expressed doubt about the reported $5 billion investment figure, suggesting the Agalarov family likely lacks the capital to fund the project independently. “The Agalarovs don’t have their own $5 billion, which means the money will be borrowed,” he wrote. He questioned the source of financing, the terms of any loans, and what guarantees would be provided. He also pointed to a provision allowing the land to be subdivided and released without restrictions, warning that this could lead to speculation rather than real development. Concerns About Lease Pricing The land was leased for 17 billion soms (approximately $1.4 million), to be paid in installments over five years. This price reflects a 0.01 coefficient discount granted as an incentive. Bakirov argued that such a deeply discounted lease is inappropriate for a large-scale commercial venture. “Why has such a drastically reduced price been set for a commercial project, when this is a major business venture and not a social initiative?” he asked. He called for comparisons with other tourism projects to determine whether similar incentives were offered. “Mr. Agalarov is not building a hospital; he is building a commercial enterprise,” he added. Public Funding for Private Infrastructure According to Bakirov, the resolution assigns responsibility for essential infrastructure—such as access roads, utilities, and the reservoir bridge—to the Uzbek government. He argued that these should be covered by the investor. “Weren’t sewage treatment and bridge construction supposed to be the investor’s responsibility? Or were the public presentations misleading?” he asked. He emphasized the contradiction between promoting Sea Breeze as a $5 billion private investment and then shifting core expenses to the public sector. Fast-Tracked Construction Raises Red Flags Bakirov also criticized the decision to...