Powering the Pivot: Central Asia’s Quiet Energy Diversification

Overview

• Central Asia is a region deeply familiar with the role fossil fuels play in driving economic growth. Natural gas dominates Uzbekistan’s energy mix, while coal remains prevalent in Kazakhstan and Kyrgyzstan. As a result, adoption of non-hydro renewables has lagged other regions, largely due to the continued availability of low-cost fossil and hydro power (Open Research Europe, 2025).

• This dynamic is now slowly shifting. Solar and wind targets are expanding, while nuclear energy has re-emerged as a credible diversification mechanism. Rather than a climate-led transition, Central Asia’s energy shift is being driven by energy security and long-term system resilience.

Soviet Legacy and Historical Development

• The region’s energy systems were originally organised under the integrated power system of the USSR and later the Unified Energy System of Central Asia (UESCA). The latter consisted of 83 power plants with a combined capacity of 25 GW, connected via 220 and 500-kilovolt transmission lines across the republics.

• Following the dissolution of the Soviet Union in 1991 and the breakdown of UESCA in 2003, Central Asian states inherited deeply interdependent energy systems while assuming national responsibility for energy security (The Security Distillery, 2019). Despite gradual national transitions, reliance on Russia-linked infrastructure persisted, raising long-term questions about autonomy and transition feasibility.

Current Policies and Key Targets

• Kazakhstan’s transition is anchored in its Concept for Transition to a Green Economy, targeting 15% renewable electricity by 2030 and carbon neutrality by 2060 (UNCTAD, 2024; UNECE, 2025). Deployment is driven through competitive auctions, with plans to add 3 GW of renewable capacity by 2026 (Energy News Pro, 2025).

• Kazakhstan also aims to establish itself as the region’s green finance hub. Through the Astana International Financial Centre, over $1.2bn in green bonds have been issued, while international financial institutions account for roughly 70% of renewable sector funding (AIFC, 2023; PwC, 2025).

• Uzbekistan has set a more ambitious target of 40% renewable energy by 2030 (PwC, 2025). Tax exemptions introduced in 2019 support solar deployment (Freshfields, 2025), while billions are being invested in grid modernisation and smart infrastructure by 2030 (Times of Central Asia, 2025).

• Kyrgyzstan and Tajikistan, heavily reliant on hydropower (BISI, 2023), are adding solar capacity to mitigate winter shortages, supported by European programmes (European Commission, 2025; GIZ, 2024). Turkmenistan’s transition remains limited, with a single 100 MW solar project under development with Masdar (EURECA, 2025).

• Nuclear energy has re-emerged as a diversification strategy. Kazakhstan and Uzbekistan moved past historical reluctance in 2024, with three nuclear power plants now under development in Kazakhstan (The Diplomat, 2025).

Risks to Keep in Mind

• Renewables still account for under 6% of electricity generation in Kazakhstan, largely due to grid constraints rather than limited capacity additions (PwC, 2025). Soviet-era infrastructure struggles with intermittency, increasing curtailment and stranded asset risk despite modernisation plans (BISI, 2023).

• Harsh winters amplify seasonal mismatches between renewable output and peak demand, forcing reliance on coal and gas and undermining emissions targets (PwC, 2025). Coal is forecast to remain above 40% of Kazakhstan’s generation mix through 2035 (PwC, 2025).

• Around 70% of renewable investment is IFI-funded, creating concentration risk (PwC, 2025), while state-regulated tariffs remain below cost-reflective levels, compressing investor returns as auctions scale (BISI, 2023).

The Cordoba View

• Central Asia’s energy transition is shaped by economics, infrastructure constraints, and security imperatives rather than ideology. Kazakhstan is emerging as the region’s green finance anchor, but nuclear power may ultimately prove the system’s stabilising force: offering winter reliability and coal displacement at the cost of higher political and execution risk.

• Special thanks goes out to Jibraan Manuel Mohammed, who co-authored this note and contributed to research.