Green Energy - The Times Of Central Asia

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Solar Energy

Uzbekistan to Build New Solar Plant with World Bank Support

The World Bank has approved a $3.5 million payment guarantee to support Uzbekistan’s renewable energy development. The guarantee covers the National Electric Grid of Uzbekistan JSC’s obligation to purchase electricity from a 100-megawatt solar power plant to be built and operated by the French company Voltalia in the Khorezm region. Details of the Solar Plant Project The solar plant, set to be commissioned in November 2025, will span 177 hectares and generate more than 240 gigawatt-hours of renewable energy annually. It is projected to reduce CO₂ emissions by over 230,000 metric tons each year and produce enough clean energy to power approximately 60,000 households. This initiative aligns with Uzbekistan’s commitment to increasing clean energy production and advancing its transition to a green economy. Broader World Bank Support In addition to this project, the World Bank has allocated $800 million to accelerate Uzbekistan’s transformation into an inclusive and stable market economy. This financing supports reforms to: Improve the business environment. Enhance agriculture, railways, and energy efficiency. Strengthen public finance management. Expand social services. Increase preparedness for environmental risks. Favorable Financing Terms The World Bank’s financial support employs highly concessional loans, offering low-cost, long-term repayment options that are more favorable than standard international financial market rates. Uzbekistan’s collaboration with the World Bank underscores its strategic focus on sustainable development and clean energy to meet environmental and economic goals.

Energy

Central Asia’s Pivotal Role in the Global Energy Transition

The United States and Europe are driving a global shift from fossil fuels to renewable energy, though progress has been slow. Central Asia’s oil, gas, uranium, and green hydrogen resources are expected to remain vital for Europe and global energy security for years to come. Within Central Asia, a shift to cleaner natural gas and nuclear energy is anticipated to replace coal-fired power, reducing environmental harm. Europe’s push for electrification has also renewed focus on nuclear energy, increasing the strategic and commercial value of Central Asia’s uranium deposits. On December 16, 2024, The Times of Central Asia, in cooperation with the Central Asia-Caucasus Institute and the American Foreign Policy Council, hosted a Burgut Expert Talk titled, "Central Asia in the Energy Transition". The event featured presentations by Dr. Svante Cornell and Dr. Brenda Shaffer, who outlined their takes on the topic. The discussion focused on Central Asia’s significant role in the global energy landscape, particularly in light of the push for renewable energy and Europe's efforts to diversify its energy sources. Challenging the notion of a true "energy transition," Shaffer argued that despite substantial investment in renewable energy, fossil fuels remain dominant. Shaffer pointed out that traditional biomass burning continues to be a major energy source in developing countries, posing significant health risks. Highlighting the fact that renewables often rely on a baseload of fossil fuels, Shaffer noted that this makes complete reliance on renewables impractical, especially in regions with harsh winters, such as Central Asia. Dr. Shaffer further emphasized that European policies, including the reluctance to finance fossil fuel projects and the instability of U.S. LNG exports, serve to hinder diversification efforts. Stressing the need for affordable and accessible energy solutions - particularly for developing countries - to address the issue of indoor pollution caused by traditional biomass burning, she argued that natural gas can serve as a bridge fuel, offering a cleaner alternative to traditional methods. Dr. Cornell focused on the rising importance of Central Asia as a major uranium producer, supplying a crucial element for nuclear energy, which is gaining renewed interest as a low-carbon energy source. Cornell highlighted the dependence of the EU on uranium imports and the potential for Central Asia, particularly Kazakhstan, to play a pivotal role in supplying this demand. Outlining the geopolitical dynamics surrounding uranium, Cornell noted the involvement of France, Russia, and China in Central Asia's uranium sector, emphasizing the importance of Central Asian states maintaining a balance in their foreign relations and partnering with various countries to ensure their independence in the uranium market. Drawing parallels to the oil and gas diplomacy of the 1990s - when Central Asian countries strategically engaged with multiple actors to safeguard their interests - Cornell advocated for the development of a robust domestic nuclear industry in Central Asia, enabling the region to move beyond raw material production and gain greater control over the value chain. Cornell also stressed the need for Western powers to actively engage in the region's nuclear sector, supporting the development...

Green Energy

Kazakhstan, with China’s Help, Plans to Export Green Energy to Europe

Although Kazakhstan is a major producer of all fossil fuels – coal, crude oil, and natural gas – it also has the capacity to secure its energy future by prioritizing renewable energy. Fully aware of that, the European Union – one of the former Soviet republic’s most significant trade partners – aims to strengthen its energy ties with Astana, hoping to begin importing not only “green electricity” from the Central Asian nation, but also green hydrogen. On November 25, at Nazarbayev University in Astana, the “Energy in Transition – Powering Tomorrow” traveling exhibition was held, and one of the major topics discussed by energy experts was green hydrogen – hydrogen produced using renewable energy sources such as solar and wind power. It is unlikely a pure coincidence that the German Federal Foreign Office initiated the event. Over the past few years, Germany has shown interest in the development of the Kazakh green hydrogen sector. The most prominent green hydrogen project in Kazakhstan is currently being developed by Hyrasia One, a subsidiary of the German-Swedish energy company, Svevind. In 2021, the company announced its plans for €50 billion ($55 billion) green hydrogen project in the Mangystau Region in western Kazakhstan. It is expected that Hyrasia One will begin the production of green hydrogen in 2030, and the power plant will reach full capacity by 2032. Meanwhile, the authorities in Astana will need to find a way to export this form of renewable energy to Europe, a major energy market for Kazakhstan. Although Astana and Brussels signed a strategic partnership on the production of green hydrogen in November 2022, several challenges remain in the implementation of the deal. Issues such as the high cost, water scarcity in the largest Central Asian state (with water being the key component of green hydrogen production), and a lack of transport infrastructure, are significant barriers to exporting hydrogen from Kazakhstan to Europe. Using Russian gas pipeline systems for transportation of the Kazakh green hydrogen to Europe is not an option given current geopolitical circumstances. To resolve this transportation issue, the Kazakh authorities and their European partners could build hydrogen pipelines across the Caspian Sea, the Caucasus and Turkey to reach southern European countries. The problem is that building such a pipeline infrastructure is very expensive, and it remains uncertain who would be willing to fund such a project. That, however, does not mean that Kazakhstan cannot become Europe’s major green hydrogen supplier. What Astana would have to do, according to experts, is to convert the green hydrogen into green ammonia and then export it to Europe via the Middle Corridor – running through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia. On the Black Sea coast, ammonia would be loaded onto ships and transported past the Bosphorus to EU members such as Greece, Romania, and Bulgaria. From there, it would be sent further north, where green hydrogen would eventually be extracted from the ammonia. This is a rather complex process, and it is unclear how feasible and...

COP29

Azerbaijan and Kazakhstan Stand Out at COP29

The 29th United Nations Climate Change Conference (COP29), held in Baku from November 11–22, 2024, has underscored the critical role of Azerbaijan and Kazakhstan in advancing Caspian Sea regional energy transitions. Both countries leveraged their positions along the Middle Corridor to present ambitious renewable and nuclear energy strategies. Azerbaijan: Renewables and the Middle Corridor Azerbaijan, the host and chair of COP29, has positioned itself as a renewable energy connector between Central Asia and Europe. Its energy strategy reflects a pragmatic approach to transitioning from hydrocarbons, which accounted for 88% of government revenues in 2023, to a diversified portfolio incorporating solar, wind, and hydropower. Azerbaijan has prioritized key renewable energy projects to align with its goal of achieving a 30% renewable share in its electricity mix by 2030. Among these is the operational Garadagh Solar Power Plant, a 230-megawatt (MW) facility developed by the UAE's Masdar, which generates 500 million kilowatt-hours (kWh) annually. Complementing this is the planned Alat Solar Project, a 400-MW solar installation expected to be operational by 2027. These projects aim to bolster domestic electricity supply and expand Azerbaijan’s capacity to export renewable energy. The Caspian Offshore Wind Initiative, backed by the European Bank for Reconstruction and Development (EBRD), seeks to harness the Caspian Sea’s favorable wind conditions. A 1-gigawatt (GW) wind farm is under preliminary study, with construction anticipated to begin by 2026. This project could transform Azerbaijan into a renewable energy hub for the Middle Corridor, particularly as Europe reduces its dependency on Russian energy. Kazakhstan: Nuclear Ambitions and Renewable Diversification Kazakhstan’s energy strategy focuses on nuclear power and renewables, driven by the need to reduce coal dependency, which still accounts for two thirds of its electricity generation. The government’s approval of its first nuclear power plant, following a nationwide referendum in October 2024, is central to this strategy. The planned nuclear reactor, located near Lake Balkhash, will generate 1.2-GW of electricity, replacing approximately 20% of coal-fired generation. This initiative complements Kazakhstan’s status as the world’s largest uranium producer, supplying over 40% of global demand and generating $3.6 billion in export revenues in 2023. Potential consortium members for the project include South Korea’s KEPCO, France’s Orano and EDF, China’s CNNC, and Russia's Rosatom, although economic-sanctions issues complicate Russia’s involvement in the nuclear sector. Kazakhstan is simultaneously scaling up renewable energy projects, with several key initiatives underway. The Zhanatas Wind Farm, operational since 2022, produces 100-MW of power, and the Shelek Solar Park, a 200-MW solar facility near Almaty, is expected to come online in late 2025. Together, these projects aim to increase renewables to 15% of Kazakhstan’s electricity mix by 2030, quintupling the level from 2023. The Trans-Caspian Electricity Cable Project At the COP29 conference, Azerbaijan and Kazakhstan, along with Uzbekistan, announced an ambitious trans-Caspian electricity cable project through an underwater transmission system. This infrastructure initiative, estimated to cost $2.5 billion, seeks to establish an electricity corridor linking Central Asia with European markets, representing a significant step in regional energy integration. The project...

Sustainable Development

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,...

Green Energy

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.