Located in the middle of one of the driest regions globally, Uzbekistan made a major attempt to adapt green practices with the adoption of the “Strategy for the Transition of the Republic of Uzbekistan to a Green Economy” for the period 2019-2030. It is important to note that the implementation plan of the strategy involves both domestic spending by different local authorities and international investments from the Green Climate Fund, Adaptation Fund, and other organizations, countries, and financial institutions. An important aspect of this strategy was the setting of goals to be achieved by 2030, which included, among others, reducing specific greenhouse gas emissions by 30% compared to the 2010 rate, achieving the production of 15 gigawatts of energy from renewable sources, and reducing energy intensity per unit of GDP by 30%.
The adoption of such a strategy has marked a significant milestone for the green transition of Uzbekistan. However, the culmination was reached after the major regional blackout on January 25, 2022, which left millions of citizens in major cities of Kazakhstan, Kyrgyzstan, and Uzbekistan without electricity. This included the capitals of the latter two and the major economic center of the former, Almaty. The reason for such a blackout was the disconnection in Kazakhstan’s North-South line, connecting the southern provinces of the country with the northern ones. The blackout in Uzbekistan and Kyrgyzstan was caused by the interconnectedness of the grid, linking them to Kazakhstan and then Russia.
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The blackout severely affected Uzbekistan, impacting almost all major cities, including Tashkent, Samarkand, Bukhara, Kokand, and even the capital of the autonomous region of the Republic of Karakalpakstan, Nukus, in the far west of the country, leading to a significant disruption of economic activity nationwide. Consequently, on February 12, 2022, within two weeks of the blackout, President Shavkat Mirziyoyev adopted a resolution on measures to increase efforts for the effectiveness of the transition to a “green economy” by 2030. The resolution did not introduce new goals but significantly refined the plan for implementing the goals and objectives set by the strategy in 2019. It further reiterated the importance of investments in the transitioning process to the “green economy.”
Saudi Arabia’s “Vision 2030”
In 2016, the Kingdom of Saudi Arabia adopted its national strategy, titled “Vision 2030”, built on three pillars: “A Vibrant Society” to fortify social infrastructure, “A Thriving Economy” for greater economic strength and diversity, and “An Ambitious Nation” to enhance governmental accountability. Among these pillars, the development of a robust economy plays a pivotal role. One of the major challenges facing the Saudi economy is its reliance on oil exports, highlighting the need for strong diversification policies. As part of the Saudi 2030 strategy, diversification is envisioned through strategic investments in critical emerging fields, including the rapidly expanding renewable energy market, which has experienced continuous growth over the last two decades. Not only has its growth been steady, but its global size is projected to more than double by 2030, reaching approximately 2 trillion USD compared to 856 billion USD in 2021. Consequently, the Saudi leadership’s interest in investing in renewable energy production has surged, prompting regional competitors such as the United Arab Emirates and the State of Qatar to also invest in this burgeoning sector.
Major Gulf Investors in Uzbekistan
Saudi Arabia
The close timing of the adoption of a “green economy” strategy by Uzbekistan and Saudi Arabia’s “Vision 2030” laid a sturdy foundation for Saudi investments in renewable energy production in Uzbekistan. Prior to a major blackout in 2022, Saudi company ACWA had already been an active investor, committing 2.7 billion USD to Uzbek green energy projects. However, bilateral relations entered a new era of cooperation post-2022 blackout due to the increased need for investment to implement the “green economy” strategy.
In March 2022, during the Tashkent International Investment Forum, separate meetings were held between the Minister of Investment of the Kingdom of Saudi Arabia, Khalid Al-Falih, and the President of Uzbekistan, Shavkat Mirziyoyev. President Mirziyoyev expressed appreciation for the development of bilateral relations and readiness to cooperate across various sectors, including energy, industrial production, and healthcare. In August of the same year, President Mirziyoyev visited Jeddah, KSA, for an official visit, where he met with Crown Prince Mohammed bin Salman Al Saud and held discussions with the Minister of Investment and heads of 20 major Saudi companies. During these meetings, agreements were reached for projects totaling 14 billion USD to support the development of Uzbekistan’s “Green Economy” strategy. Another significant milestone occurred with Minister Khalid Al-Falih’s visit to Tashkent in November 2023 to meet with President Mirziyoyev. During this meeting, agreements were signed for an additional 12 billion USD in investments from Saudi Arabia across various sectors including chemicals, energy, agriculture, pharmaceuticals, IT, and infrastructure development in Uzbekistan. Additionally, an agreement was signed for projects totaling 11 billion USD in areas such as transport infrastructure, municipal services, geology, irrigation, waste management, higher education, and labor migration.
It’s notable that the value of projects implemented by ACWA in Uzbekistan surged from $2.7 billion in 2022 to $7.5 billion in 2023. The company is currently involved in 10 projects in Uzbekistan as of 2023. These projects include the Karatau Wind Project, aimed at generating 100 MW of energy, the Nukus Wind Project, and a green hydrogen agreement with Uzkimyosanoat to produce 3,000 tonnes per year of green hydrogen, potentially saving up to 20.4 million cubic meters of natural gas annually, among others. This substantial increase in Saudi investment in Uzbekistan is expected to persist, especially given Uzbekistan’s ambition to achieve 35% renewable energy production by 2030.
UAE
Similar to Saudi Arabia’s “Vision 2030,” the economic resilience plans of the UAE also emphasize diversification. Therefore, investing in the development of renewable energy production in Uzbekistan is a key aspect of pursuing this diversification policy. The cooperation between the UAE and Uzbekistan in this field extends beyond addressing the 2022 blackouts. Masdar, a UAE-based company, had already been involved in implementing projects in photovoltaic and wind power stations before the Tashkent International Investment Forum in 2022.
As was the case with Saudi Arabia, this cooperation encompasses various sectors beyond green energy. For instance, agreements were made to implement projects totaling a value of $10 billion following the meeting of the UAE–Uzbekistan working group during the visit of a UAE delegation headed by the Minister for Cabinet Affairs and Future, Mohammad bin Abdulla Al Gergawi, in April 2019. During the latest meeting between the Minister of Energy and Infrastructure of the UAE, Suhail al-Mazrouei, and Shavkat Mirziyoyev, the President of Uzbekistan, high appreciation was expressed for the implementation of joint projects totaling $4 billion, involving over 300 UAE companies.
This collaboration also includes major UAE renewable energy production companies such as Masdar and TAQA, which have implemented numerous projects in photovoltaic, wind, and solar power plant development. One notable project by Masdar involves the construction of a Solar PV and Battery Energy Storage System in Guzar, which will operate a 300 MW solar photovoltaic power plant alongside a 75 MWh capacity battery energy storage system. Other projects include the development of the Nur Navoi Solar Project, generating 100 MW of renewable energy, and the Jizzakh Solar Project, generating 220 MW of renewable energy.
Qatar
Another Gulf country closely cooperating with Uzbekistan is Qatar, which has been a significant player in energy production within the region. However, it’s essential to highlight that this collaboration extends beyond renewable energy production to encompass the utilization of fossil fuels. One such notable project involves Nebras Power company of Qatar, which has agreed to construct and operate the Syrdarya II Combined Cycle Gas Thermal (CCGT) power plant in the central region of Uzbekistan. Nebras Power has partnered with an international consortium of power companies, including the French company EDF and Japanese-based Sojitz Corporation and Kyuden Group, to manage the 1600 MW power facility in the Syrdarya region. Nevertheless, cooperation in green energy has also begun, with an agreement signed with the same Nebras Power company in October 2023 for the construction of a wind farm in the city of Nukus, aimed at generating 1 GW of green energy.
GCC-CA5 format success
As Gulf countries increasingly prioritize the diversification of their economies, the scope of cooperation with Uzbekistan is poised to expand. Achieving 35% green energy generation by 2030 represents just the initial phase in the establishment of a “green economy.” Uzbekistan boasts significant potential for solar, wind, and photovoltaic energy, which can not only meet domestic energy demands but also offer a substantial surplus for export. This potential positions Uzbekistan to become an exporter of green energy, with Gulf countries likely to play a major role as shareholders.
The success of such collaboration between Gulf countries and Central Asian nations, including Uzbekistan, was evident in the inaugural Gulf Cooperation Council-Central Asia Summit held on July 19, 2023. The Joint Statement underscored investment support across various sectors, notably the transition to “green” energy. This commitment signals the Gulf countries’ resolve to be key stakeholders in the development of a region characterized by rapid population growth and increased energy consumption. The summit format has since been formalized, with plans for annual gatherings.
The second GCC-CA5 Summit, held in a Ministerial format on April 15, 2024, in Tashkent, Uzbekistan, further solidified this cooperation. Alongside the summit, individual meetings occurred between President Shavkat Mirziyoyev and high-ranking officials from UAE, Bahrain, Kuwait, Oman, Saudi Arabia, and Qatar. Notably, these meetings introduced new potential partners such as Oman, Bahrain, and Kuwait, highlighting the success of GCC-CA cooperation in the Uzbekistan context. While projects discussed during these meetings did not explicitly address Uzbekistan’s “green economy” strategy, it is reasonable to anticipate a growing Gulf countries’ involvement in the country’s transition to green energy.
Conclusion
The need for diversifying energy resources in Uzbekistan coincided with the economic diversification needs of the GCC countries. In this context, Uzbekistan’s green transition received substantial support in the form of investments from the Gulf. This cooperation was underpinned by the adoption of strategic documents such as Uzbekistan’s “Green Economy,” Saudi Arabia’s “Vision 2030,” and Abu Dhabi’s “Economic Vision 2030.” Additionally, the 2022 blackouts that affected major metropolitan areas in Central Asia further motivated Uzbekistan to pursue “green” policies and seek investment to accelerate these initiatives. This led to fruitful cooperation between Saudi Arabia, the UAE, and Qatar. Such collaborations simultaneously extended to other Central Asian countries, eventually culminating in a platform for presidential or ministerial GCC-CA5 summits, with the first held in presidential format in July 2023. The second ministerial summit in April 2024, along with subsequent meetings between the President of Uzbekistan and ministers from Kuwait, Oman, and Bahrain, demonstrates that cooperation with Gulf countries could be further expanded by involving new players in Uzbekistan’s green economy project.