Central Asia has a unique renewable energy potential, having a capacity to expand solar, wind and hydropower projects. With the ambitious renewable energy targets set both in Uzbekistan and Kazakhstan, the sector is experiencing great interest among international investors.

Central Asia has a unique renewable energy potential, having a capacity to expand solar, wind and hydropower projects. With the ambitious renewable energy targets set both in Uzbekistan and Kazakhstan, the sector is experiencing great interest among international investors.

As mentioned by Sardor Koshnazarov CEO at Investa and a renowned expert in the region in an exclusive interview to EnerLoop by Invest In Network, Uzbekistan seems to be the leader in renewable energy investments in recent years as many projects are being and will be implemented in the future. With the country's 35 million population and growing economy, it is certainly a market with sound fundamentals. The energy demand is strong and is set to increase in the future. The renewable energy projects have been financed primarily by multilateral financial institutions, demonstrating the security and financial return of the investments.

At the same time, there are certain challenges international developers face when entering the market.

Very big competition in the market might be challenging for international investors, according to the Head of Energy and Transport Division at PPPDA Khasan Khasanov.

"In almost all projects that were tendered, the "hegemony" of companies from the Middle East was obvious. The aggressive approach and the lowest tariff prices proposals of Middle East companies are creating difficulties for other companies to overcome their competitors. The issue may be related to the energy security of the country and geopolitics, and, of course, PPPDA is working on solving it. Along with ministries and departments, we are looking for ways to solve the problem of a possible future oligopoly in the Uzbekistan renewable energy market. Market diversification is a top priority", Mr Khasanov added.

The legislative environment in Uzbekistan shall be more flexible and enabling when it concerns project finance principles on a limited recourse basis, said Partner at Centil Law Firm Umid Aripdjanov. "There should be no restrictions for the lenders to enjoy the benefits of direct agreements with the public partners and state authorities, the right to exercise step-in and step-out with respect to a project company or the right to replace it", he mentioned.

Ms Anna Kim Project Manager at Delegation of German Economy in Central Asia mentioned a common barrier for investments in Kazakhstan is economic instability which might be connected to insufficient financial guarantees.


Mr Neil Young CEO and Managing Director at Elixir Energy mentioned that the general sovereign risks that pertain to the region that affect any FDI will also be relevant for renewable energy projects. The geopolitical factors that are specific to Eurasia will also over-shadow investors' views. However, the latter can be a positive as well as a potential negative.

On the other hand, the main obstacle that foreign companies often face while entering Central Asia is a lack of market knowledge, i.e. key market players, stakeholders, and market structure as it is.

International companies, renewable energy developers, investors, independent power producers, EPC and engineering firms, as well as consultants and technology suppliers, are invited to join the upcoming Energy Week Central Asia & Mongolia 2022 (26-28 April, Uzbekistan), which is a unique platform bringing together both state and private sectors of Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Mongolia and providing our international participants with new business opportunities.