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Japan Extends $229 Million Loan to Boost Energy Efficiency in Uzbekistan

Japan will lend Uzbekistan 36.8 billion yen, roughly $229 million, to cut energy waste in public buildings and industry, targeting two sectors that place heavy pressure on the country’s fuel and electricity systems. The financing was formalized on June 10 in Tashkent, where Japanese Ambassador Kenji Hirata and Uzbekistan’s Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov signed exchange notes for two projects under Japan’s yen-loan program, according to the Embassy of Japan in Uzbekistan. The larger of the two projects, Energy Efficiency Improvement in Public Buildings, has a maximum value of 21.788 billion yen, about $136 million. A second project, Energy Efficiency Improvement in the Industrial Sector, is valued at up to 14.969 billion yen, about $93.4 million. Both loans carry an annual interest rate of 2.4% on the principal and 0.8% for consulting services. They will be repaid over 25 years, including a seven-year grace period. The financing is being provided on concessional and untied terms, allowing greater flexibility in procurement. The projects are aimed at lowering demand rather than adding new generating capacity. In practical terms, that means modernizing equipment and introducing energy-saving technologies in industrial and commercial operations, as well as in public buildings. The public-buildings component addresses one of the weaker points in Uzbekistan’s energy system. The country’s schools, preschools, hospitals and other state facilities are often expensive to heat and difficult to cool, particularly in buildings constructed during the Soviet period with little regard for energy efficiency. Previous World Bank work on Uzbekistan has identified public buildings from the 1970s and 1980s as poorly insulated and reliant on old boilers and water-heating systems with high energy intensity. The problem is visible in the country’s air as well as its energy bills. In winter, inefficient heating systems increase demand for fuel, while coal- and fuel-oil-based heating contributes to smog in cities such as Tashkent, alongside dust, traffic and industrial emissions. Energy-efficiency upgrades can reduce the fuel demand that worsens urban air pollution during cold weather. Uzbekistan remains heavily dependent on fossil fuels for its energy supply. The Japanese Embassy noted that the country’s energy consumption and greenhouse gas emissions per unit of gross domestic product remain higher than global averages, making improvements in energy efficiency a national priority. The industrial component addresses another pressure point. Uzbekistan is trying to expand manufacturing and exports, but that ambition depends on a power system still dominated by fossil fuels and burdened by aging infrastructure. For Tashkent, cutting the energy used by factories and commercial enterprises is part of the same energy-security challenge as building new power plants or adding renewable capacity. The agreement also gives practical form to one of the priorities in the Tokyo Declaration adopted at the first Central Asia-Japan Summit in December 2025. The declaration identified “Green and Resilience” as one of three major areas for future cooperation between Japan and the five Central Asian states. The loans follow President Shavkat Mirziyoyev’s visit to Japan late last year, when Uzbek and Japanese...

Alatau City

Tokayev Calls for Greater Role for Kazakhstani Businesses in Alatau City Development

Kazakhstani entrepreneurs must become full participants in the development of Alatau City, the country’s flagship smart city project, alongside foreign investors, Kazakhstan’s president Kassym-Jomart Tokayev said. He made the remarks during a meeting on the future of what is envisioned as Kazakhstan’s first fully digital city. In 2024, Tokayev signed a decree granting city status to Zhetygen village, located approximately 50 kilometers from Almaty, Kazakhstan’s largest city. Alatau City incorporates Zhetygen as well as the settlements of Enbek, Zhanaarna, and Kuigan, along with parts of Konaev and Talgar district in Almaty Region. The project is designed as a smart city comprising four distinct zones: the Gate District, a financial and business center; the Golden District, focused on education and healthcare; the Growing District, dedicated to industrial and logistics facilities; and the Green District, intended for recreation and entertainment. Speaking at the June 2 meeting in Almaty, Tokayev said more than 50 investment projects had already been identified for Alatau City, with a combined value of approximately $4 billion and the potential to create more than 50,000 jobs. He called for the portfolio to be expanded in the next one or two years by attracting investors to priority sectors. Domestic businesses, he said, must become “full participants in the city’s development rather than mere observers.” Tokayev cited Shenzhen and special legal regimes in Hainan, Dubai, and Singapore as examples of places where governments played an early role by building core infrastructure. That approach, he added, reduces risks for businesses, creates predictable conditions for private capital, and can generate a cycle in which public infrastructure investment attracts private capital and future tax revenues. The president warned that shifting the burden of initial infrastructure investment to the private sector can reduce a project’s appeal and lead to monopolistic structures with excessive tariffs. He instructed the government to ensure stable financing for Alatau City’s core infrastructure during the initial stage and said the city could be given additional borrowing limits and authority to undertake government borrowing until it develops a sustainable revenue base. Budget funds, he said, must be used strictly for investment purposes and linked to the city’s long-term development. Tokayev directed investment toward priority sectors including information technology, industry, transport and logistics, tourism, healthcare, and education. To create a favorable investment climate, he instructed officials to follow international standards, especially in areas where national regulations lag behind global practice. He identified Alatau City as a strategic platform for the rapid development of digital assets and a new financial architecture for Kazakhstan. Additionally, he called for the quick removal of excessive barriers in the sector and the introduction of new financial instruments. These would include a clear legal status for digital assets, recognition of crypto assets as property, and the use of the digital tenge within the new system. Tokayev also proposed a zero tax rate on digital asset transactions and capital gains generated within the jurisdiction, as well as faster work to tokenize real-sector assets, including real estate, infrastructure projects, and natural...

Uzbekistan Suspends New Gas Connections for Homes to Conserve Energy

Uzbekistan has halted the issuance of technical permits for new natural gas connections in residential and commercial buildings that use gas exclusively for heating or cooking. Minister of Energy Jurabek Mirzamahmudov announced the decision on October 28, according to Gazeta.uz. The measure applies to newly built properties that consume gas purely for combustion rather than industrial production. “This does not concern only apartment buildings,” Mirzamahmudov said. “According to a Cabinet of Ministers resolution, starting this year, technical permits for gas connection are no longer issued to consumers who use gas solely for burning. However, if gas is used to create added value in industry, that is allowed, because resources are limited.” Existing buildings already connected to the gas network will not be affected. In new developments, gas stoves will be replaced with electric ones, and heating will be provided through centralized or local boiler systems. The minister said that the rational use of resources has become a national priority, particularly given the country’s reliance on certain external energy supplies. “Since there are alternative sources, such as electric stoves for cooking and electricity for heating, they serve the same purpose,” he added. Mirzamahmudov said that the country’s centralized heating network is being expanded during the current heating season, with several projects under development through public-private partnerships. “Urban networks are being modernized, and cogeneration facilities are under construction. For example, on November 18 in Samarkand, during an international forum, we plan to sign a heating supply agreement based on a public-private partnership with a Saudi company,” he noted, likely referring to a project in Nukus involving the Emirati firm Tadweer. The policy shift comes amid a continued decline in domestic gas output. Uzbekistan’s natural gas production fell by 4.2% in the first two months of 2025 compared to the same period last year. Production has steadily dropped from 61.59 billion cubic meters in 2018 to 44.59 billion in 2024. The new restrictions reflect the government’s growing efforts to conserve resources and improve nationwide energy efficiency.

World Bank Approves $800 Million Loan for Uzbekistan’s Economic Reforms

The World Bank has approved an $800 million concessional loan package to support Uzbekistan’s ongoing structural reforms, aimed at reducing poverty, creating jobs, and expanding private sector-led growth. The financing is designed to help the government enhance competition, strengthen social protections, and foster a more dynamic economic environment. The financial support will fund a broad set of policy initiatives, including mitigating the impact of energy tariff increases on low-income households, advancing gender equality in the workplace, and expanding access to social services for vulnerable populations. The package also targets reforms in key sectors such as telecommunications, agriculture, and energy, while supporting greater integration of Uzbekistan into global trade networks. With favorable long-term repayment terms, the loan will reduce the country’s debt servicing costs and free up government resources for economic and social development. One of the central measures backed by the package is a significant boost in financial assistance for low-income families. Annual cash transfers per household will increase from UZS 270,000 to UZS 1 million to offset the rising costs of electricity, heating, and gas. The World Bank package will also support legislation to protect women from sexual harassment and workplace discrimination, including safeguards against employment bias related to pregnancy or childcare responsibilities. Reforms will open the provision of social services to private and non-governmental organizations, enabling greater coverage and efficiency. Among other key initiatives is the establishment of a National Investment Fund to manage and privatize state-owned enterprises. The creation of an independent telecommunications regulator is expected to promote competition, while new agricultural risk insurance schemes and liberalized cotton pricing aim to strengthen resilience and market access for farmers. Textile companies will be permitted to buy cotton directly from producers at flexible prices. The reform agenda also focuses on trade liberalization, including the removal of exclusive rights in strategic sectors such as energy, oil and gas, and agriculture. Export procedures will be simplified, and new regulations will promote private participation in electricity distribution and allow renewable energy producers to sell directly to consumers. Energy efficiency and climate policy are integral to the package. Uzbekistan plans to establish a National Energy Efficiency Agency and introduce incentives for solar power, heat pumps, and energy-efficient building retrofits. Public procurement processes will incorporate environmental criteria to support sustainable products and services. According to a World Bank report released in July, Uzbekistan’s economy grew steadily between 2010 and 2022, with per capita GDP rising by an average of 4.2% a year, outpacing the regional average. However, the report noted that growth has relied heavily on capital investment rather than productivity gains, and that deeper reforms are needed to build a more competitive private sector.

Uzbekistan Startup to Build First National EV Charging Network

A Tashkent-based startup is set to build Uzbekistan’s first national electric vehicle (EV) charging network, marking a significant step in the country’s push toward clean energy and technological self-reliance. Pulseev, established earlier this year, aims to install 500 EV charging stations across Uzbekistan by 2026, with a long-term target of 3,000 stations by 2030. Its first large-scale charging hub, now under construction, will include more than 50 charging bays, complemented by modular cafés, coworking spaces, and a children’s playground. Designed and assembled locally, Pulseev’s chargers are tailored to Uzbekistan’s energy infrastructure and climatic conditions. The stations will offer fast charging, mobile app integration, and remote monitoring, features aimed at simplifying the user experience. “We’re not just installing hardware,” said co-founder Jasurbek Khodjaev. “We’re creating spaces where people feel proud to power their vehicles with clean energy, while families enjoy time together.” The initiative aligns with Uzbekistan’s broader strategy to invest in renewable energy and improve energy efficiency. The government has expressed strong support for EV adoption and digital infrastructure as part of efforts to reduce dependence on fossil fuels and modernize the national grid. Pulseev’s long-term vision includes expansion into other Central Asian markets and the Middle East. The company promotes a concept it calls “energy freedom,” advocating for democratized access to clean energy not only for transportation but also for everyday life. “This is about dignity, independence, and innovation,” said Mukhammad Khalil, founder of Startup Garage, a regional accelerator supporting Pulseev. The project also reflects a broader shift in Central Asia’s startup ecosystem, with increasing emphasis on indigenous technological solutions to local challenges. By developing EV infrastructure domestically, Pulseev positions itself as a key player in shaping the region’s sustainable transport future.

UNDP and Japan Launch Initiative in Uzbekistan to Reduce Emissions and Boost Energy Efficiency

Uzbekistan has launched a new international initiative aimed at cutting greenhouse gas emissions and improving energy efficiency in public infrastructure. Spearheaded by the United Nations Development Programme (UNDP) in partnership with the Government of Japan and Uzbekistan’s Ministry of Economy and Finance, the project targets key sectors including schools, hospitals, kindergartens, and public transportation.z According to UNDP Uzbekistan, the initiative seeks to bolster the country’s resilience to energy-related challenges driven by increasingly extreme weather conditions. Many public buildings in Uzbekistan suffer from outdated infrastructure and significant energy loss, resulting in elevated emissions and burdensome utility expenses. The project will focus on upgrading facilities with thermal insulation, energy-efficient windows, heat pumps, and solar panels to address these inefficiencies. A central objective is to enhance indoor comfort throughout the year, particularly in regions experiencing extreme seasonal temperatures. The installation of modern heating and cooling systems is expected to make classrooms and hospital wards more sustainable and livable. The initiative will also extend to green mobility, supporting the introduction of electric buses, the development of charging infrastructure, and the deployment of air pollution monitoring systems along urban transport routes. A distinctive feature of the program is its use of the Joint Credit Mechanism (JCM), which provides Uzbekistan with access to advanced Japanese technology and investment. This mechanism facilitates international collaboration on carbon reduction and supports the country's transition toward cleaner technologies. The initiative aligns with Uzbekistan’s climate commitments under the Paris Agreement. The government has pledged to cut greenhouse gas emissions by 35 percent and raise the share of clean energy to 25 percent by 2030. According to UNDP representatives and officials from the National Agency for Energy Efficiency, the project is not only designed to meet environmental targets but also to improve public health and alleviate the financial strain caused by inefficient energy systems. This latest endeavor builds on previous sustainable development projects in Uzbekistan. Notably, a European Union and UNDP-backed program has supported the country’s fish farming industry by providing eco-friendly equipment to enhance water quality and reduce energy consumption.