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Can Uzbekistan’s Green Transition Offset Its Gas Decline?

Uzbekistan faces a widening energy gap. Natural gas production peaked in 2008 and, after a partial recovery in the late 2010s, has fallen sharply. Official figures show output dropped from 61.6 billion cubic meters (bcm) in 2018 to 41.5 bcm in 2024. Production fell another 15% year on year in the first quarter of 2026. The gap is already being filled from abroad. Russian gas deliveries rose 15% in 2025 to nearly 6.5 bcm, while Uzbekistan also imports gas from Turkmenistan. Renewable electricity cannot replace every household or industrial use of gas. It can reduce the volume burned in power stations, leaving more domestic fuel available elsewhere. Declining output is already changing Uzbekistan’s external position. The country, once a net gas exporter, became a net importer in 2023. Imports help protect households and factories from shortages, but they add costs and increase exposure to Russian and Turkmen supplies. Renewable generation therefore serves an energy security purpose even before its climate benefits are counted. Natural gas remains the central concern. In its 2022 review, the International Energy Agency said it provided about 85% of Uzbekistan’s total energy and electricity supplies. The government expected gas demand to rise by 30% to 65 bcm by 2030, while electricity demand would roughly double. The IEA also warned that reserves would last fewer than 20 years at the production rate then prevailing. This was a reserve-to-production estimate, not a fixed depletion date. New discoveries or investment could extend it. Lower consumption would do the same. The government has responded with a rapid renewable buildout. In 2025, solar and wind plants generated more than 10.5 billion kWh of electricity. Renewable generation, including hydropower, reached 16.8 billion kWh. The Ministry of Energy said this saved about 3.2 bcm of natural gas. That saving was equivalent to roughly half the volume Russia supplied during the year. It shows that renewables already ease the shortage. Yet 3.2 bcm remains far below the roughly 20 bcm fall in annual gas production since 2018. On current figures, the green transition is slowing the impact of the decline, not yet offsetting it. The buildout forms part of Uzbekistan’s 2019 Green Economy Transition Strategy. Renewable projects bring foreign investment and create opportunities for domestic suppliers. In December 2025, President Shavkat Mirziyoyev said local companies had supplied $700 million of materials and electrical equipment while also providing services to energy projects. Renewable generation also limits import demand by reducing the gas burned in power stations. Large projects depend heavily on decisions by the state. Procurement and land allocation affect who receives contracts. Grid access and investment approvals shape how quickly plants are completed. RFE/RL has documented concerns over opaque subcontracting in Uzbekistan’s solar sector. Its 2024 investigation found that two subcontractors on the Sherabad project were absent from publicly available documents. One company had been incorporated only two days after construction began. A founder denied accusations of corruption, while principal contractor Masdar did not respond to questions. The investigation did not establish that the...

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AIFC Interview: Central Asia Investment, Middle Corridor and ESG

The Astana International Financial Centre (AIFC) positions itself as a platform for international investment in Kazakhstan and across Central Asia. In an interview with The Times of Central Asia, Zhanbolat Kakishev, Chief Product Officer at the AIFC Authority, discussed competition for investment, financing for the Middle Corridor, investor protection, ESG, and currency risks. Kakishev said the AIFC ecosystem has attracted $26.3 billion in investment to Kazakhstan and registered more than 6,000 companies from 90 countries. TCA: How does the AIFC assess the current investment climate in Central Asia amid the fragmentation of global markets, and what share of foreign direct investment into the region does the centre aim to attract in the coming years? Zhanbolat Kakishev: We assess Central Asia’s investment climate as resilient and gradually strengthening despite the fragmentation of global markets. Moreover, the restructuring of global supply chains and investors’ search for new sources of growth are creating additional opportunities for the region. International investor interest in Central Asia already rests on a solid foundation. According to UNCTAD, by the end of 2025, the stock of foreign direct investment in the region had reached approximately $235.5 billion, of which $156.4 billion was in Kazakhstan. The region combines a substantial resource base, a growing domestic market, and a strategic position between Europe and Asia. It also has significant investment potential in areas including transport and logistics, energy, critical minerals, digitalisation, and financial services. The AIFC does not set a target in the form of a fixed share of total FDI flowing into Central Asia. Our task today is to continue improving the AIFC ecosystem, its infrastructure, and the conditions that allow international capital to enter Kazakhstan effectively, as well as to participate in regional projects. To date, $26.3 billion in investment has been attracted to Kazakhstan through the AIFC ecosystem. More than 6,000 companies from 90 countries are registered in the Centre’s jurisdiction. For us, however, it is not only the volume of capital attracted that matters, but also its quality — long-term investment that contributes to economic diversification, private-sector development, and the further integration of Kazakhstan and Central Asia into global capital markets. TCA: Given the growing interest in the Middle Corridor, or Trans-Caspian International Transport Route, what investment instruments does the AIFC offer to finance major infrastructure and logistics projects in the region? Zhanbolat Kakishev: The AIFC provides comprehensive legal and financial infrastructure for structuring and attracting financing for major infrastructure and logistics projects, including those along the Middle Corridor. Depending on the structure of a project, special-purpose vehicles or companies (SPVs/SPCs), joint ventures, and investment funds can be used to pool capital from strategic, institutional, and private investors. Through the Astana International Exchange (AIX), projects can also raise debt and equity financing, including through conventional, green, and sustainability bonds, as well as Islamic finance instruments such as sukuk. For large infrastructure projects, the ability to combine different sources of capital is particularly important. These can include financing from international financial institutions and banks, funds from strategic...

Business & Economy Kazakhstan Kazakhstan Business & Economy

After CPC Disruptions, Kazakhstan Wants to Refine More Oil at Home

Kazakhstan wants to more than double its oil refining capacity and sell more petrol and diesel to neighboring countries. The case for reducing its reliance on crude exports has gained urgency. Disruptions to the Caspian Pipeline Consortium (CPC) this year have already forced the country to cut its 2026 oil production forecast by 2 million tonnes. Kazakhstan produced 99.6 million tonnes of oil in 2025 but refined only 18.4 million tonnes. Energy Minister Yerlan Akkenzhenov said at a briefing on August 25 that refining capacity is planned to increase to 40 million tonnes. “We want to bring this ratio, as in other developed countries that are also producers, to one to two or one to three,” Akkenzhenov said. According to him, Kazakhstan eventually expects to supply neighboring countries with motor fuel and expand its export potential. This does not mean abandoning crude oil exports: even after refining capacity reaches 40 million tonnes, a significant share of production will continue to be exported. Astana is instead seeking to shift the balance toward finished products. The oil refining industry development concept runs through 2040. According to the Energy Ministry, Kazakhstan’s refineries processed 18.4 million tonnes of oil in 2025 and produced 15.47 million tonnes of petroleum products. The concept adopted in 2025 envisaged refining rising to 39.2 million tonnes a year by 2040. The government has since accelerated the timetable, targeting 40 million tonnes of annual capacity by 2033. Average refining depth at the country’s three main refineries reached 90% in 2025 and is targeted to rise to 94%. To achieve this, Kazakhstan is preparing to build a fourth major refinery with capacity of up to 10 million tonnes a year. Possible locations include the Mangystau, Atyrau and Turkestan regions, as well as Ulytau, with the authorities expecting to select a site by the end of the year. The new plant could begin operating by 2033, with the Energy Ministry expecting its launch to fully cover domestic demand for jet fuel and allow Kazakhstan to expand exports of K5-standard petroleum products, broadly equivalent to Europe’s Euro 5 standard. Problems with the Caspian Pipeline Consortium, Kazakhstan’s main route for getting oil to the global market, have strengthened the case for diversifying the way Kazakhstan uses and exports its oil. The pipeline runs through Russia to a Black Sea terminal near Novorossiysk, meaning disruptions there can quickly affect production in Kazakhstan. On August 25, Akkenzhenov said the country’s oil production forecast for 2026 had been cut from 98 million to 96 million tonnes. He estimated production losses resulting from attacks on CPC infrastructure at around 3.5 million tonnes. The authorities are trying to compensate for part of the lost volumes by rescheduling major maintenance at large oil fields. Astana is also looking for additional routes to global markets. Akkenzhenov identified Baku-Supsa, the pipeline running from Azerbaijan to Georgia’s Black Sea coast, as one option, saying it could carry around 5 million tonnes a year. The route has seen only limited use since 2022, although...

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What Building Central Asian Supply Chains Taught Me About AI

I took over spare-parts supply at BPK Auto in Ust-Kamenogorsk in the mid-2000s, at the age of 25, moving from selling cars. The company was the general dealer for VAZ in Kazakhstan, assembled Niva models in the city, and was taking on Skoda, Chevrolet, and Kia while building service centers across the country to meet the expectations of those brands for a dealer. My job was to keep parts flowing to all of it. Several thousand vehicles came through in a month, and a single car contains something like 50,000 separate part numbers. The service teams wanted as many of those as possible sitting on the shelves. From where they stood, that made sense, because they were judged on whether a mechanic could start a repair the same day, whether a customer complained, and an ISO audit was running over the service operation at the same time. From the procurement side, the arithmetic looked different. Some parts cost two or three thousand dollars and were fitted once or twice a year, and holding them across four model lines tied up a large share of the company's working capital. I built the forecast in spreadsheets and checked it against actual sales once the month closed in 1C. To run it, I needed the service side's own records: how many vehicles of each type they had seen, and what had been repaired. I asked for them for months. They would not release them. Some of that was habit; a warehouse full of everything being what a well-run operation had looked like for the previous 40 years. More of it sat in how the two departments were counted. My result was recorded the moment the parts moved into the service center. Theirs was recorded much later, when the car left the workshop. Nobody was measured by the number that would have made the forecast work. The forecasting was the straightforward part of that job. The difficult part was building an operation in which people shared the information behind the forecast and were expected to act on its findings. Why a Better Model Would Not Have Changed the Outcome Put one of today's AI demand-forecasting systems into that same warehouse and very little changes. The forecast would be far better than anything I produced by hand. It would still depend on service records that nobody was willing to release, and where records did exist, it would be reading entries written up at the end of a long shift. It could not grant the purchasing manager authority to reorder against it, nor could it alter the measures by which the service department was judged. Better intelligence does not repair the path between operational data and operational action. Every party you add to that path lengthens it. A distribution network across Kazakhstan and Kyrgyzstan can run from a manufacturer to over 45,000 small retail outlets, served through more than 18 distribution centers, with 1,391 field staff taking and checking orders on the ground. An order begins...

Business & Economy Turkmenistan Turkmenistan Business & Economy Turkmenistan Features

Turkmenistan Gas Exports: Could Tajikistan Become a New Market?

Turkmenistan has the world’s fourth-largest natural gas reserves, but most of its gas exports still go to China. Ashgabat has spent years seeking other markets and is again looking to potential customers elsewhere in Central Asia. Uzbekistan already buys Turkmen gas, while Tajikistan remains a potential customer. The prospect drew renewed attention after Tajik Foreign Minister Sirojiddin Muhriddin visited Turkmenistan on August 20–21. During meetings with President Serdar Berdimuhamedov and Foreign Minister Rashid Meredov, the two sides discussed trade, transport, energy, and other areas of cooperation. The published accounts of the talks, however, made no mention of new gas supplies. The Idea Dates Back to 2023 At an August 2023 summit in Ashgabat, the presidents of Turkmenistan, Uzbekistan, and Tajikistan agreed to cooperate on supplies of natural gas, oil, petroleum products, and electricity. They instructed their energy ministries to discuss joint projects. After the summit, Meredov identified Uzbekistan and Tajikistan as priority markets in the region. At the time, Turkmenistan said it planned to increase gas production by at least 60 billion cubic meters in the coming years, citing further development of Galkynysh, one of the world’s largest gas fields. State-owned Turkmengaz and UzGasTrade subsequently agreed on annual supplies of up to 2 billion cubic meters under a short-term contract and discussed a longer-term arrangement. The contract came as Uzbekistan became a net importer after decades as a gas exporter, with domestic production declining and demand rising. Output fell further in 2025 and the first half of 2026. Any Turkmen gas bound for Tajikistan would have to pass through Uzbekistan because the two countries do not share a border. Tajikistan already imported around 267 million cubic meters of Uzbek gas in 2024, but Turkmen supplies would require a separate commercial arrangement. No prices, volumes, or timetable have been announced, leaving the plan on paper. A Small Market, but a Short Route Tajikistan cannot replace China as a market for Turkmen gas. Hydropower provides almost all of its electricity, and its potential demand for imported gas is far smaller than China’s. In February, Gurbanguly Berdimuhamedov, Turkmenistan’s former president and current chairman of the Halk Maslahaty, described diversifying gas exports as one of the country’s main priorities. Turkmenistan’s landlocked position leaves it dependent on where its pipelines lead. The main route runs east through Uzbekistan and Kazakhstan, carrying around 30 billion cubic meters of gas to China each year via the Central Asia–China pipeline. That reliance may deepen after China National Petroleum Corporation reached an agreement with Turkmenistan in April to develop the fourth phase of Galkynysh. The $5.1 billion project is expected to add 10 billion cubic meters of annual gas-processing capacity. Bigger Alternatives Are Moving Slowly The best-known alternative is the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline. Although construction began on its Afghan section in 2024 after decades of discussion, the pipeline remains far from delivering gas to Pakistan or India. By August 2026, Afghan authorities said 116 kilometers had been laid. Afghanistan’s role could expand from transit country to gas buyer....

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Kazakh Refinery Plans Fuel Exports to Russia Amid Petrol Shortages

A small refinery in western Kazakhstan is preparing to process Russian crude and send most of the resulting petrol and diesel back to Russia as Moscow struggles with fuel shortages. The arrangement was confirmed on August 25, the same day that separate incidents occurred at two of Kazakhstan’s three major refineries. On August 19, Russian Deputy Prime Minister Alexander Novak said that, given the situation on the fuel market, the government was “keeping its finger on the pulse” and monitoring supplies daily with companies and regional authorities. According to Novak, Russia had already imposed export restrictions and begun importing petroleum products. Several refineries were also expected to return from repairs, increasing domestic supplies. Russia’s Fuel Shortage The pressure on Russia’s fuel market is illustrated by data published by the industry portal InfoTEK. According to its August 24 snapshot, AI-95 petrol, the widely used 95-octane grade, was available at only 5,620 of Russia’s 26,098 operating filling stations, or 22%. Even in Moscow, it could be found at 161 of 786 operating stations, about 20%. Russia has also temporarily relaxed restrictions on lower environmental grades of fuel, including Euro 4, Euro 3 and Euro 2, known in the Russian classification as K4, K3 and K2. Since 2016, only fuel meeting at least the Euro 5 standard had generally been permitted. Russian economist Boris Grozovsky estimates that, given the refining capacity knocked out by Ukrainian strikes and the number of plants undergoing repairs, Russia is currently short of roughly one-third of the petrol needed at peak demand. August is traditionally a high-demand month because of summer travel and agricultural work. “If it were November now, the situation would be a little easier for the Russian government. Russia is trying to bring in petrol from India, Morocco, Turkey, Kazakhstan and Azerbaijan, but imports also have limitations. The petrol brought in from India turned out to be too expensive,” Grozovsky said. Kazakh Refinery Steps In Speaking at a government briefing on August 25, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said that the small Condensat refinery in Aksai, West Kazakhstan Region, would process Russian crude, with around 70% of the petrol and diesel it produces sent to Russia. Up to 30% will remain on the Kazakh market, while the refinery also retains the right to export products outside the Eurasian Economic Union. “Under the agreement we currently have, up to 30% of the petroleum products in demand, petrol and diesel, will remain in Kazakhstan, while the rest will be shipped to the Russian Federation,” the minister told reporters. Akkenzhenov said the arrangement reflected Condensat’s location close to the Russian border. The refinery is not connected by pipeline to either country’s main oil network, meaning both crude deliveries and fuel exports depend on rail capacity. Akkenzhenov also stressed that the refinery’s owner is not under sanctions and said the Energy Ministry did not see sanctions risks for the project. He said the arrangement would also bring investment and preserve jobs at a refinery that has struggled financially. Condensat’s Financial Troubles Condensat was established in...