This week, the media in Central Asia covered several crucial energy stories, such as the increase in Uzbekistani gas exports despite the country’s plans to cease exports amidst rising domestic consumption, Uzbekistan ending its deal for the development of the Shokhpakhta gas field with Gazprom, and Uzbekistan concluding agreements for several new renewable energy projects at the Samarkand International Climate Forum. Several outlets reported joint Russian-Tajikistani anti-terror drills and the CIS Foreign Ministers’ Council meeting in Almaty. Other sources noted Kazakhstan’s plans to auction 50 new mineral deposits and Uzbekistan’s signing multiple new investment agreements with U.S. companies. They also reported that Uzbekistan and Germany signed a memorandum on labor migration, FDI fell sharply in Kazakhstan, and remittances from Russia surged in Tajikistan.
The CIS Foreign Ministers’ Council met in Almaty. Source: Sputnik Kazakhstan
Diplomatic Events:
The CIS Foreign Ministers’ Council met in Almaty on April 11 (Kazinform). During their meeting, they explored critical issues concerning regional and international cooperation, as well as the upcoming 80th anniversary of the end of World War II. Specifically, the ministers discussed trade, investment, transport, and border security. The Foreign Ministers also laid flowers at the Eternal Flame of the Glory Memorial in the 28th Panfilov Guardsmen Park.
The CIS Foreign Ministers’ Council met in Almaty. Source: Sputnik Kazakhstan
Energy:
Azerbaijan, Kazakhstan, and Uzbekistan have signed an agreement with the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) regarding the Caspian Green Energy Corridor initiative (The Times of Central Asia). The parties signed the Memorandum of Understanding in Baku on April 5. According to the MoU, the ADB and the AIIB will conduct a feasibility study of the project and establish a legal framework to facilitate cross-border electricity trading between the three countries, especially from renewable sources. The project’s principal aim is to connect their respective electricity grids and supply green electricity from the Caspian region to Europe via the Black Sea Cable.
At the Samarkand International Climate Forum, Uzbekistan signed several deals in the renewable energy sector (Daryo). The Ministry of Investment, Industry, and Trade approved an investment agreement with SANY Renewables International Investment to construct a 1000 MW wind farm in Karakalpakstan. They signed another agreement with the China Electrical Equipment International Company to build a 500 MW solar power plant in the Farish district of the Jizzakh region. These projects align with the Uzbekistani government’s objective of increasing renewable energy generation to 25% of total electricity production by 2030. This year, the government plans to implement several measures to improve electricity generation and efficiency. For instance, they will install 100 MW solar power plants in 300 neighbourhoods to save 45 million cubic metres of gas. They also will construct 1000 micro-hydroelectric power plants and switch streetlights to solar power.
Uzbekistan signs wind and solar deals at Samarkand International Climate Forum. Source: Daryo
From January to February 2025, Uzbekistan’s natural gas imports fell 4.6 times, while exports grew 1.6 times (Kun). According to the country’s National Statistics Committee, Uzbekistan imported $35.8 million worth of gas from Russia and Turkmenistan during the first two months of 2025, compared to $166.7 million during the same period in 2024. Imports totalled $27.8 million in January and $8 million in February, in contrast to $35.6 million in January 2024 and $131.1 million in February 2024. Meanwhile, Uzbekistan exported more gas in the first two months of 2025 than in the first two months of 2024. The country exported $42 million in January and February 2025, in contrast to $26.7 million in the first two months of last year. However, China’s General Administration of Customs noted $49.4 million of gas imports from Uzbekistan, 13.9% lower than the $57.4 million recorded last year. While Uzbekistan exported no gas to Kyrgyzstan in the first two months of 2024, it exported $1.84 million in January and February this year. These reports follow previous statements from Uzbekistani authorities that they intended to halt all gas exports due to rising domestic demand and falling production.
Uzbekistan ended its agreement with Gazprom concerning the development of the Shokhpakhta gas field in Karakalpakstan (Kun). The agreement was signed in 2004 for fifteen years and was renewed in 2018. Officially, all cooperation between Gazprom and Uzbekneftegaz ceased on July 31, 2024, as confirmed recently by a spokesperson at Uzbekneftegaz. Soviet geologists discovered the Shokhpakhta field in 1964, and production began in 1970. Production was eventually halted due to diminishing reserves; however, with the help of new technologies, production recommenced in 2004. The field has produced around 350 billion cubic metres of gas annually in recent years. Uzbekneftegaz signed a similar 25-year production-sharing agreement with Gazprom for the Zhel gas field, which remains in force.
The Chinese company Xinjiang Qianyuan Kunyu Construction Engineering has revealed that it will construct nine small HPPs in the Andijan region of Uzbekistan (Daryo). The Deputy Head of the Ministry of Investment, Industry, and Trade, Ilzat Kasymov and the General Director of Xinjiang Qianyuan Kunyu Construction Engineering, Hou Hue, signed the investment agreement following their meeting on April 8. Kasymov also met with the Chairman of the Board of Directors of Holley Group, Wang Licheng, to discuss the development of the Great Silk Road Industrial Technopark project in Almalyk. The park will accommodate around 100 enterprises worth $1 billion and create 3000 jobs. China remains Uzbekistan’s largest trading partner despite bilateral trade decreasing slightly in February 2025 to $2.02 billion from $2.12 billion during the same month in 2024.
Investment:
A delegation from Uzbekistan’s Ministry of Investment, Industry, and Trade visited Washington D.C. last week, signing several new agreements with U.S. companies (Daryo). The Minister of Investment, Industry, and Trade, Laziz Kudratov, held meetings with American companies from the mining, tourism, and food sectors. Following their discussions, the delegation signed several agreements concerning critical minerals, the construction of high-pressure grinding complexes, and training specialists in Uzbekistan. Regarding tourism, they concluded agreements to construct new hotels in multiple key tourist destinations across Uzbekistan.
Kazakhstan’s investment promotion agency, Kazakh Invest, has reported a sharp decline in foreign direct investment (FDI) in 2024 (Kursiv). In 2024, gross FDI inflows fell by 28%, from $23.9 billion to $17.1 billion. At the same time, net FDI went negative for the first time since the agency began keeping records in 2005, reaching -$2.55 billion. However, they emphasised that this was likely a short-term phenomenon and could be reversed. They attributed the decline to global economic uncertainty and the near completion of significant commodity projects, such as the Future Growth Project at the Tengiz oil field. They also noted a steep drop in reinvested earnings, which fell by $7.1 billion last year. They explained this decline could result from fluctuations in the global commodities market, depressed profits for key investors, or foreign companies deciding to distribute profits as dividends instead of reinvesting. Nevertheless, there was some positive investment news. They highlighted that investment in fixed assets rose to $41.2 billion, indicating that while investment in extractive industries is declining, investment in other new infrastructure projects remains high. The agency noted that Kazakhstan concluded several investment agreements in 2024, likely to spur further investment. These projects include a $7 billion polyethylene plant, a $4 billion coal chemical plant, a $12 billion industrial park for processing non-ferrous metals, and over $10 billion in new gas projects, including a new gas processing plant at the Kashagan field, the KS-14 compressor station, the KS-14-Aktobe-Kostanay pipelines and the second section of the Beineu–Bozoi–Shymkent pipeline. Several new investment projects in the agricultural field include a $150 corn starch production plant, a $1.5 billion wheat processing plant, and a $1 billion corn processing plant. The UN Economic and Social Commission for Asia and the Pacific reported that Kazakhstan leads the region in new investments, receiving $15.7 billion last year, a year-on-year increase of 88%. Recently, the agency has shifted its focus to manufacturing and other export sectors. The government is rolling out a new digital investment platform and an investor complaint registry to support this diversification drive. They are also introducing targeted incentives and tailored regional investment strategies while reducing bureaucracy and approval times.
Migration:
Germany and Uzbekistan have concluded a memorandum on labour migration (Kun). Orif Botayev, Chairman of the Management Board of Mikrokreditbank, Thomas Förster, head of International People IP GmbH & Co.KG, diplomats, and Matthias Wangler, head of the German Sparkassenstiftung for International Cooperation in Uzbekistan, signed the memorandum during a ceremony at the Uzbekistani embassy in Berlin. The agreement aims to attract Uzbekistani specialists to Germany. Under the memorandum, Germany will provide vocational and language training for selected specialists in gastronomy, food logistics, general logistics, meat processing, and the German language. Akbar Fakhriyev, a GmbH & Co.KG delegation member, noted that the International People Education GmbH language centre has already begun offering vocational and language training in Tashkent. Another delegation from GmbH will visit Uzbekistan in April 2025 to develop an action plan in conjunction with German Sparkassenstiftung for International Cooperation and Mikrokreditbank. The agreement represents a step towards implementing the Comprehensive Partnership Agreement on Migration and Mobility, which was concluded during Chancellor Olaf Scholz’s visit to Uzbekistan last year. Germany also plans to recognise diplomas issued by Uzbekistani higher education institutions to attract skilled workers.
Security:
Russia and Tajikistan held joint anti-terror drills from April 7-11 (Asia Plus). The exercises took place at the Harb-Maidon training ground in Khatlon province of Tajikistan. Military forces from both countries practised countering border breaches, eliminating armed groups, and preparing troops to operate in mountainous areas. The exercises involved motorised infantry, armoured units, FPV drones, and aviation units, including Mi-24 attack and Mi-8MTV5-1 transport helicopters. Currently, Russia has stationed around 7000 troops in Tajikistan under a 2004 agreement.
Russia and Tajikistan held joint anti-terror drills. Source: Sputnik Tajikistan
Water:
During the 2025 irrigation season, Kazakhstan will receive 3.7 billion cubic metres of water from the Syr Darya (Orda.kz). The Minister of Water Resources and Irrigation, Nurzhan Nurzhigitov, announced the amount following a meeting of the Central Asian Interstate Coordination Water Management Commission in Samarkand (Kazinform). Nine hundred nine million cubic metres will be transferred through the Dostyk canal, while 975 million will be sent to the North Aral Sea. From October 2024 to April 1 this year, Uzbekistan provided Kazakhstan with 12.6 billion cubic metres of water from the Syr Darya, 1.7 billion cubic metres more than planned.
On April 11, the Kazakhstani Minister of Water Resources and Irrigation, Nurzhan Nurzhigitov, met with the Head of the Islamic Development Bank’s (IsDB) Regional Hub Almaty, Ali Muhammad Khan, and UNDP Resident Representative in Kazakhstan, Katarzyna Wawierniato, in Almaty (Kazinform). They discussed the climate-resilient, sustainable water resources development project, which aims to construct four new reservoirs, renovate four existing ones, and upgrade 115 canals. The IsDB has agreed to finance the project. It will also provide funds to study river basins across the country, assess the introduction of early warning systems for the information and analytical centre of water resources, and construct new technical facilities for Kazvodkhoz.
Transport Infrastructure:
Russia and Uzbekistan have signed an agreement commencing the Trans-Afghan railway project (The Tashkent Times). The Uzbekistani and Russian Ministries of Transport and the Uzbekistani and Russian state railway companies agreed to conduct a feasibility study of two proposed routes: Mazar-I-Sharif to Chaman and Termez to Kharlachi. They plan to consult with their Afghan and Pakistani partners during the Russian-Islamic World Forum in Kazan from May 16-17, 2025. The Eurasian Development Bank previously assessed the project and estimated that it would cost $4.8 billion (Kun).
Mining:
According to the Ministry of Industry and Construction, Kazakhstan will auction 50 mineral deposits this year (Kursiv). The Head of Subsoil Use at the ministry, Almas Kushumov, speaking at the MINEX Kazakhstan 2025 mining and exploration forum in Astana, confirmed that an electronic auction will likely occur in June. Successful bidders will be given exploration and production rights to the deposits. The deposits being auctioned contain copper, gold, and other rare mineral reserves. In 2023 and 2024, Kazakhstan auctioned the rights to 117 deposits through electronic auctions, generating $40 million in subscription fees. Meanwhile, in 2024, 43 deposits were added to the state register, including 23 mineral deposits, raising Kazakhstan’s reserves by 20 tons of gold, 9,000 tons of silver and 48,000 tons of copper. In February, the previous Minister of Industry and Construction, Kanat Sharlapaev, teased the idea of permitting U.S., EU, and Chinese companies to participate in the auctions instead of only Kazakhstani companies to attract more investment and gain access to new technologies.
Tourism:
In an effort to attract more tourists, the Kazakhstani government is considering making the tax-free system, which it has been trialing since 2019, permanent (Kursiv). Many countries worldwide use the system to allow tourists to receive a VAT refund on purchases. The system has been trialled in Kazakhstan since 2019 in Astana, Almaty, Shymkent, and Turkestan. Since 2019, the government has refunded VAT if the cost of the goods they purchase exceeds $150 and they are taking the goods outside the EAEU. So far, they have refunded $9.3 million, with tourists spending an average of $1600. The government is also looking to streamline the application process for the new Neo-Nomad Visa, enabling online applications through the visa-migration portal.
Economic Forecasts:
According to the ADB’s Asian Development Outlook in April 2025, economic growth surged in Tajikistan in 2024 due to strong remittances and rising demand (Asia Plus). In the first three quarters of 2024, remittances accounted for 48% of GDP despite increasing immigration restrictions in Russia. Meanwhile, rising remittances and public sector wages contributed to a 14.8% surge in domestic consumption. Public investment also rose 26.1% to 7.4% of GDP. The trade deficit widened as exports fell by 20.5% from $2.45 billion in 2023 to $1.95 billion in 2024, while imports grew by 19.2%. Agricultural exports were particularly affected as higher fertiliser prices and poor weather reduced vegetable exports by 51% and cotton exports by 14.3%. Cement exports also fell dramatically by 30.4% as Uzbekistan imposed higher tariffs. Exports of precious metals, such as gold, declined by 69.6%. The Central Bank’s monetisation of gold in 2023 increased its reserves significantly. Estimates indicate its gold reserves increased by 150% in the last five years, reducing its demand for gold. Nevertheless, precious metals still make up 17.8% of all exports.
