Although most Central Asian nations are heavily dependent on fossil fuel production and exports, they are aiming to significantly increase the use of renewable energy, hoping to eventually become crucial suppliers of so-called green electricity to Europe. Achieving such an ambitious goal will be easier said than done, given that developing the green energy sector in the region requires massive investment.
What Central Asian states – struggling to attract long-term private capital into clean energy projects – need is financing for projects that modernize power networks, improve grid stability, and enable cross-border electricity flows. These upgrades are essential for large-scale renewable energy deployment and regional trade in power.
Most actors in Central Asia seem to have taken major steps in this direction. In November 2024, at the COP29 climate conference held in Baku, Kazakhstan signed several deals worth nearly $3.7 billion with international companies and development institutions to support green energy projects. Neighboring Uzbekistan, according to reports, has attracted more than €22 billion ($23.9) in foreign investment in renewable energy, while Kyrgyzstan, Turkmenistan, and Tajikistan – which is aiming to generate all its electricity from green energy sources by 2032 – have developed strategies to help increase their renewable potential.
But to turn their goals into reality, all these nations will need funding – whether from oil-rich Middle Eastern countries, China, the European Union, or various international financial institutions. Presently, the development of the Caspian Green Energy Corridor – which aims to supply green electricity from Central Asia to Azerbaijan and further to Europe – remains the region’s most ambitious project. According to Yevgeniy Zhukov, the Asian Development Bank’s (ADB) Director General for Central and West Asia, this initiative is a strategic priority for Kazakhstan, Uzbekistan, and Azerbaijan.
“While the prospect of exporting green electricity to Europe is part of the long-term vision, the core goal of the initiative is to accelerate green growth within the region,” Zhukov told The Times of Central Asia.
Together with the Asian Infrastructure Investment Bank, the ADB is funding a feasibility study for this proposed transmission corridor. The study will assess the technical and economic viability of such a system, along with the environmental and regulatory requirements. In the meantime, the ABD is expected to continue funding other green energy projects in the region. The financial entity, according to Zhukov, invested $250 million in Uzbekistan in 2023 to support renewable energy development and comprehensive power sector reforms, while in other Central Asian countries, it remains “firmly committed to driving the green energy transition.”
“For instance, in Tajikistan we are exploring the potential to co-finance the Rogun Hydropower Project alongside the World Bank and other international partners. In Kyrgyzstan, our focus has been on supporting foundational reforms in the energy sector, including strengthening the policy and regulatory environment to attract private investment in renewables. In Turkmenistan, we’ve launched a total of $1.75 million technical assistance initiative to help lay the groundwork for future renewable energy development,” Zhukov stressed, pointing out that these efforts are part of a broader dialogue to support the Central Asian countries’ long-term clean energy ambitions and explore pathways for regional cooperation.
In other words, this multilateral development bank, headquartered in the Philippines, is working closely with Central Asian governments to support the transition to cleaner, more sustainable energy systems. As such, the ADB seems to be particularly active in Kazakhstan, where it is helping the authorities “ensure inclusive economic growth, strengthen governance, and address the impacts of climate change.”
“To help Kazakhstan achieve carbon neutrality by 2060 and contribute to global climate change mitigation, ADB is supporting the country through various initiatives. They include financing the construction of solar power plants, modernizing a coal-based heat and power plant in Almaty, expanding the high-voltage transmission network in southern Kazakhstan to integrate large-scale renewable energy, and providing advisory support on heat legislation,” Zhukov told TCA, adding that the Bank’s focus in the region’s largest country is to “support the shift from coal to cleaner energy for power, combined heat and power, and heat only boilers.”
It is no secret that despite being a major consumer of coal, Kazakhstan is seeking to gradually shut down some of its coal power plants and replace them with renewable or other low-carbon energy sources. Neighboring Kyrgyzstan is also aiming to phase out coal and is therefore looking to ADB for technical assistance in identifying and preparing a pipeline of viable clean energy projects.
But the path toward a green energy transition in Central Asia is not without challenges. Key obstacles include an outdated energy infrastructure, regulatory uncertainty, limited regional integration, and competition for investment with more mature renewable markets. Thus, even though Central Asian countries have strong potential to go green, making it happen will take a steady effort, cooperation, as well as continued support from foreign actors seeking to strengthen their presence in this strategically important region.
