Green Energy - The Times Of Central Asia

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Fueling Growth: IFC Strategic Initiatives for Sustainable Development in Central Asia – An Interview With Hela Cheikhrouhou

With its headquarters in Washington, D.C. the International Finance Corporation (IFC) was established in 1956 as the private-sector arm of the World Bank. The institution offers advisory, and asset-management services to promote investment in developing countries. Recent ventures in Central Asia include solar power projects in Uzbekistan and Kyrgyzstan, and an entrepreneurship scheme for women and young people in Tajikistan. TCA spoke with Hela Cheikhrouhou, IFC Vice President for the Middle East, Central Asia, Türkiye, Afghanistan, and Pakistan about the IFC’s work in Central Asia. TCA: Can you please give us an overview of IFC's performance in Central Asia for fiscal year 2024 (July 1, 2023, to June 30, 2024)? IFC had a pivotal year in Central Asia, making strides in sustainable development and inclusive growth across the region. Our efforts concentrated on climate finance, infrastructure, agriculture, and supporting smaller businesses. By coupling investments with advisory support, we helped expand the role of the private sector, creating jobs, promoting financial inclusion, strengthening infrastructure, and supporting the region's green transition. In the fiscal year 2024, IFC committed over $1 billion to Central Asia. This includes about $400 million in long-term financing from our own account, $600 million in mobilization, and $35 million in short-term trade and supply-chain finance to facilitate trade flows. Alongside these financial commitments, we engaged in advisory projects focused on improving financial inclusion, developing innovative public-private partnerships (PPPs), and advancing climate initiatives and gender equality. Our results this year underscore our commitment to fostering sustainable, inclusive growth, and enhancing the resilience and sustainability of Central Asian economies. TCA: Can you highlight some of the IFC’s key achievements in Central Asia this year? In addition to the strong financial commitments mentioned earlier, IFC expanded its presence in various sectors, including finance, capital markets, renewable energy, agriculture, and infrastructure. Through our advisory services, we helped structure impactful PPPs at the sectoral level. A major focus this year has been strengthening local financial markets. IFC invested $228 million across ten financial institutions in Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. Up to half this amount was dedicated to supporting women entrepreneurs and rural enterprises. We also helped these financial institutions expand portfolios related to their micro, small, and medium enterprise (MSME) businesses, advance climate finance, foster digital transformation, and issue the region’s first sustainability, social, and green bonds. Supporting MSMEs has enabled entrepreneurs to grow their businesses and generate employment. In the past fiscal year alone, IFC-supported projects created around 35,000 direct jobs, including opportunities for over 13,000 women across the region. These efforts have been further bolstered by targeted investments and projects in individual countries across the region. In Uzbekistan, IFC, together with the World Bank, financed a new solar plant equipped with the country’s first battery energy storage system. Once completed, the plant is expected to provide electricity access to around 75,000 households in the Bukhara region. As part of its broader support for the Uzbek government’s efforts to reform its chemical sector, IFC assisted the State Asset Management Agency in privatizing Ferganaazot,...

Azerbaijan Renewable energy Green Energy Economic Cooperation COP29

Kazakhstan, Uzbekistan, and Azerbaijan Forge Green Energy Partnership

On November 13, on the sidelines of the COP29 summit in Baku, Azerbaijan, Kassym-Jomart Tokayev, Shavkat Mirziyoyev and Ilham Aliyev, the leaders of Kazakhstan, Uzbekistan and Azerbaijan, signed an agreement for a strategic partnership in developing and transporting green energy. Calling the signing of this agreement a historic event, Aliyev said that “it opens new opportunities for cooperation between the regions of Central Asia and the Caucasus. In fact, the integration processes, the processes related to transportation, energy, and trade between the regions of Central Asia and the Caucasus, allow us to say that these two regions are acting in a synchronized manner in many areas, including in the field of green energy development.”. The Azeri president added that constructing an electric cable under the Caspian Sea could lead to broader regional collaboration. Aliyev also highlighted Azerbaijan's ongoing plans to construct a cable from Azerbaijan along the bottom of the Black Sea to Europe. “The feasibility study for this project is nearing completion, so we will connect Central Asia, the Caucasus, Europe, the Caspian, and the Black Seas with a single energy corridor,” he stated. In his speech, Tokayev said the trilateral agreement opens new opportunities for integrating the energy systems of Kazakhstan, Uzbekistan, and Azerbaijan, as well as for creating reliable corridors to supply environmentally friendly energy to European and other markets. “Kazakhstan plays an extremely important role here as a large transit territory. The practical results of this Agreement will also contribute to developing the Middle Corridor as a ‘green bridge’ connecting our economies. Close cooperation in this key area will intensify the exchange of experience and advanced technologies between the three states and further strengthen our energy security,” Tokayev said. Mirziyoyev emphasized the environmental significance of this agreement, noting, “The energy that will be transmitted is wind and solar energy, which will help mitigate the impact on the climate. In this way, we support joint efforts to protect the climate within the framework of the Paris Agreement and achieve the Sustainable Development Goals,” he added. The three presidents also witnessed the signing of an Executive Program on cooperation in green energy development and transmission by the energy ministers of Azerbaijan, Kazakhstan, Uzbekistan, and Saudi Arabia.

Green Energy Economic Cooperation Renewable Energy Generation Energy Infrastructure Energy Security

Central Asia to Develop a Unified Platform for Electricity Trade

Uzbekistan's Deputy Minister for Energy Umid Mamadaminov announced at the European Economic Days in Tashkent on November 6 that a unified platform for electricity trade is being developed in Central Asia. Mamadaminov said that Uzbekistan is developing this platform with the support of the World Bank and other partners. “Infrastructure is very important for integrating renewable energy sources such as wind and solar, and many countries face this problem. We need at least 5,000 km of power lines, including 500 kV and 200 kV high-voltage lines and substations,” Mamadaminov said. At least 2,000 km of power lines should be built in the next two years. “We have already signed contracts to install more than 2,000 MW of energy storage systems with a total capacity of more than 400 MW, as each is a two-cycle network. We will have at least 4,000 MW of basic capacity in the next two years. This helps to respond to fluctuations in solar energy production quickly,” the deputy minister said. According to Mamadaminov, automation is the main problem in integrating renewable energy sources into the electric grid because the system cannot be controlled without it. In addition, this year, reforms to modernize and regulate energy consumption, including a new plan developed by the Cabinet of Ministers, were implemented in Uzbekistan. Uzbekistan’s energy system, especially electricity generation, relies heavily on fossil fuels. However, the country aims to produce 25% of its electricity from renewable sources by 2030. Uzbekistan plans to focus on solar energy while using wind, biomass, and hydro sources to achieve this goal. The government is working to attract investors to build 8 GW of solar and wind power and increase hydroelectric capacity to 1.935 GW by 2030. Biogas production from biomass and organic waste will also be developed.

Green Energy Economic Cooperation International Finance Corporation Renewable Energy Generation

IFC Provides $240 Million Loan to Boost Uzbekistan’s Renewable Energy

The IFC has announced a $240 million Islamic Equity Bridge Loan for ACWA Power to boost Uzbekistan’s renewable energy sector. The announcement was made at the 8th Future Investment Initiative conference in Riyadh, Saudi Arabia. The financing will cover a 1-gigawatt solar PV plant, a 668-megawatt Battery Energy Storage System (BESS), and around 500 kilometers of high-voltage transmission lines. These projects aim to advance Uzbekistan’s clean energy goals, potentially cutting greenhouse gas emissions by 1.3 million tons of CO2 annually and generating around 2,400 gigawatt hours of electricity per year. Al Muhaidib, ACWA Power's Chief Financial Officer, stated that “we are honored to collaborate with IFC on this transformative project in Uzbekistan, which embodies our shared vision of advancing sustainable energy solutions. This initiative will establish a new standard for cross-border ACWA Power recourse funding support, effectively addressing energy demands while championing environmental sustainability.” The $240 million financing, structured as an Islamic Finance Murabaha, includes an A-Loan of up to $227.75 million and a $12.25 million trust loan through IFC’s Managed Co-Lending Portfolio Program. This funding will support ACWA Power’s equity contributions to the project’s development over the next four years. By optimizing equity returns, this structure helps project developers offer competitive tariffs and attract private investors, advancing Uzbekistan’s goal of reaching 40% renewable energy by 2030. “This project reflects IFC’s commitment to tackling climate change, accelerating the clean energy transition in emerging markets, and supporting public and private sector entities in Saudi Arabia with innovative investments in the region and beyond,” said Laura Vecvagare, IFC’s Regional Head of Industry for Infrastructure and Natural Resources in the Middle East, Central Asia, Türkiye, Afghanistan, and Pakistan. Saudi company ACWA Power’s investment portfolio in Uzbekistan now includes eight projects worth over $6.8 billion, with a more than 5.5 GW design capacity. The company’s success highlights Uzbekistan as an attractive investment hub and a leader in renewable energy in Central Asia.

Energy Infrastructure Legislation Environment Atomic Energy Government Nuclear Energy Green Energy

Kazakhstan Plans to Equate Nuclear Energy With “Green” Energy

Kazakhstan plans to equate nuclear power with renewable energy sources (RES), such as solar and wind power, and extend to it the same benefits that already apply to them. The Energy Ministry has drafted a bill to incentivize alternative energy sources as part of the transition to a green economy, including the development of hydrogen energy. According to a document published on October 18 on the Open Regulatory Legal Acts portal, the discussion will last until November 11. One of the main problems identified in the draft is the need for legislative preferences for nuclear power despite its potential as an environmentally friendly source. In 2023, the share of RES in Kazakhstan was only about 6% of total electricity generation, emphasizing the need to develop alternative sources to reduce carbon emissions. Kazakhstan intends to follow the EU's example. In 2022, the EU recognized nuclear power as “green.” This recognition opens the way to receiving benefits and subsidies for future nuclear projects, including Kazakhstan's first atomic power plant. At the same time, the bill's authors noted that the analysis of international experience points to the constant clarification and supplementation of legislation considering current realities (technology development, market structure, global experience, and the current situation in the country). In particular, in Germany, the law on renewable (alternative) energy sources has undergone six amendments, including an increase in the targets for using alternative energy sources, adjustment of support measures taking into account the achieved level, and so on. Since 2000, various programs have been developed in Poland to supplement and clarify the different incentives for developing alternative energy sources.

Climate Change Green Energy Rare Earth Elements Energy Security COP29

Central Asia’s Increasing Profile in Global Climate Policy

Between 11 and 22 November, the 29th Conference of the Parties (COP29) to the United Nations Framework Convention on Climate Change (UNFCCC) will take place in Baku, Azerbaijan. In the run-up to this global event, Central Asian countries have been continuing their integration into the cooperative implementation of the global energy and environmental agenda. Such measures include, but are not limited to, commitments to reducing methane emissions, contributions to green supply chains, and — for Kazakhstan in particular — its nuclear policy based on multi-vector diplomacy. One may anticipate their especially enhanced presence in view of the fact that several them have strategic-partner relations with Azerbaijan, which is cooperating with them also in the implementation of the Trans-Caspian International Trade Corridor (TITR or "Middle Corridor"). The Central Asian states are using their implementation of global energy and environmental priorities as an instrument to integrate further into the international system. Following their participation at COP28 (30 November – 23 December 2023, in Dubai, United Arab Emirates), all five of them signed the Global Methane Pledge to reduce methane emissions by at least 30% by 2030. They have also stepped up their contributions to green supply chains, signalling their ambitions to become more important players in global geoeconomics. At the same time, these initiatives also seek to promote domestic economic diversification. Kazakhstan, in particular, continues to play a central role with its multi-vector approach, notably in the nuclear energy sector, positioning itself at the intersection of sustainability and global energy security. Kazakhstan holds 12% of global uranium reserves. It became the world’s leading producer in 2009 and in 2022 accounted for 43% of global production. In Central Asia, Uzbekistan has a Rosatom-sponsored NPP project under way, as does Kyrgyzstan. Along with Kazakhstan, Uzbekistan and Turkmenistan in particular actively engaged in discussions on climate policy at COP28, acknowledging the need to balance their resource-rich economies with global sustainability goals. One of the key outcomes was the region's collective involvement in the Global Methane Pledge. Global environmental policy bodies have assessed that methane emissions are a significant concern for global climate policy. The effect of this assessment will be to load still greater financial burdens on oil and gas companies by making development of hydrocarbon deposits, and the transmission of hydrocarbon resources to market, more expensive. Kazakhstan’s commitment to cutting methane emissions by 30% by 2030 exemplifies this shift, signalling a readiness to reform domestic industries in line with global climate targets. Turkmenistan has the highest methane emissions intensity in the region, but challenges remain in terms of monitoring and implementation. Uzbekistan’s leadership was also highlighted at COP28. The country’s ambitious plans to scale up solar and wind energy by 2030 align with broader regional goals of reducing dependence on hydrocarbons. This is Tashkent's (and the region's) way of enhancing their profile as "good global citizens" as policy decisions by political bodies at the international level increasingly emphasize decarbonization. Uzbekistan has made strides in "green supply chains" by focusing on the renewable energy sector...