MINISTER OF ENERGY
Energy I Leader I Uzbekistan 2023
_BIOGRAPHY He graduated from the University of Alabama (USA) and the Tashkent Institute of Chemical Technology. Previously, he worked as head of the Information-Analytical Department for development of the fuel-energy complex at the Cabinet of Ministers. He was also Deputy Chairman of Uzkimyosanoat, Deputy Minister of Economy, and director of the agency Uzatom.
“WE INVITE FOREIGN INVESTORS TO JOINTLY IMPLEMENT THE STRATEGY FOR THE TRANSITION OF THE REPUBLIC OF UZBEKISTAN TO A GREEN ECONOMY FOR THE PERIOD 2019-2030.”
CAN YOU TELL US ABOUT YOUR MAIN PRIORITIES FOR 2022-2023?
The energy sector is ready to make the second breakthrough in its development course – to advance the reforms to create the power and gas markets, to intensify work on the upstream-downstream, in power generation and grid and interconnection improvement. In 2023, to maintain the gas production levels, we concentrate on the upstream exploration work both in the state-owned Uzbekneftegaz and in companies with foreign investment.
Uztransgaz will continue the implementation of the capital investment program for the modernization of the gas pipeline. The National Electric Grids of Uzbekistan will continue its large-scale program for the modernization and construction of high-voltage networks and substations, carried out with loans from the World Bank. Soon, NEGU will announce the winner of its SCADA EMS deployment EPC contractor selection tender, and the work will start in 2023. The Regional Electric Grids activates the program of modernization of low voltage networks and substations, carried out at the expense of loans from ADB and other organizations.
As for the reforms we expect to turn NEGU into a purely grid operator by taking out the wholesale power purchase and sale contracts into a separate company. We also expect the establishment of an energy market regulator which should begin to establish market rules, and conditions for licenses of energy market participants. In the chemical industry, the implementation of the program for the development of chemical and technological clusters will continue. In 2023 we are planning to complete the development of draft laws on electricity and gas.
Within the framework of the Government Investment Program, 97 investment projects with a total value of U$42.3 billion are being implemented within our complex. Most of the projects are aimed to produce value-added products, increase power generation capacities, including renewables, modernize existing and building new electric and gas networks, as well as the digitalization of the industry. By the end of this year, U$4.4 billion will be disbursed, including U$2.9 billion of foreign direct investment and loans, as well as U$671.6 million of foreign loans under state guarantees within the investment projects. 11 projects will be put into operation.
In 2023 we will see 20 projects will be put into operation and we are planning to implement 76 investment projects with a total value of U$41 billion and disbursed more than U$4.6 billion, including U$3.6 billion from foreign direct investment and loans, as well as U$581.5 million foreign loans under state guarantees.
WHAT ARE THE KEY OBJECTIVES AND OPPORTUNITIES FOR INVESTORS WITHIN THE CHEMICAL INDUSTRY CLUSTER?
As a result of the government reforms, we can observe the growth of industrial production share in the structure of the GDP of the Republic of Uzbekistan, several strategically important industries were identified, including the chemical industry. The chemical goods market is currently a premium one, which, in its turn, motivates not only to increase the volume of existing capacities but also to organize multi-level production chains with high-value-added products.
On October 10th of 2022, the President of Uzbekistan signed the resolution on approval of a Targeted Program for the Strategic Development of the Chemical and Gas Chemical Industry. The program prioritizes the attraction of private, including domestic and foreign, investments in financing projects. It aims for the implementation of 44 investment projects based on technological clusters for U$10.6 billion and 14 projects worth U$1.8 billion are under implementation.
We have 30 projects in planning and envisage attracting about U$8.8 billion of foreign direct investment and loans. We have already created a chemical-industrial technopark in Chirchik city, we are also working on establishing chemical technological clusters in Navoi and Fergana regions as well as in Ustyurt district of the Republic of Karakalpakstan.
CAN YOU HIGHLIGHT EFFORTS IN IMPROVING UZBEKISTAN'S BUSINESS ENVIRONMENT AND COMPETITIVENESS?
Uzbekistan has a potential of 3000 GW of solar and 520 GW of wind. In 2019, a new law on the use of renewable energy sources has been implemented and the great stimulus was given to the development of the use and expansion of renewable energy. Currently, we are working to utilize the entire available RES potential in Uzbekistan. Together with International Financial Institutions, new legislative framework and portfolios of investment projects are being developed. By improving the legislative and investment climate, Uzbekistan is becoming more attractive to international companies with extensive experience in the implementation of renewable energy projects.
To date, we have been able to attract investment in two industrial-scale solar power plants with a total capacity of 200 MW in the Navoi and Samarkand regions. More than 80 companies from all over the world showed interest in participating in the ongoing tenders and attractive tariffs were received as a result, which aroused great interest from many countries in the policy and practice of implementing energy projects in our country. We have signed 10 agreements for the construction of solar and wind power plants with a total capacity of 2,900 MW.
By 2026, the power system capacity is expected to reach 27,400 MW, of which 16,600 MW are thermal power plants, 2,834 MW hydroelectric power plants, and 8,000 MW solar and wind power capacity. By 2030, additional energy capacity is planned to include and reach a total capacity of 7,000 MW solar, 3,400 MW hydro, and 5,000 MW wind. To achieve these goals, new tenders with a total capacity of about 950 MW are prepared for announcement with the support of international financial institutions.
At the same time, parallel work is underway to study additional sites for the implementation of renewable energy projects. In recent years, the Ministry of Energy has paid more attention to the development and management of electricity networks, to maintain a balance and ensure energy security in connection with the implementation of renewable energy projects. To do this, in projects for the construction of new variable generation, energy storage systems are included.
The development of small-scale renewable energy sources, such as roof-top solar and solar water heaters, also does not go unnoticed. This direction is supported by a special mechanism for providing benefits and subsidies by the Government, such as up to 30% coverage of capital costs, as well as the allocation on a preferential basis for three years of the necessary equipment (solar modules and water heaters).
Together with the World Bank and international consultants, an assessment of the technical potential of Uzbekistan for the production of hydrogen and the development of a roadmap for the development of low-carbon hydrogen will be carried out. Also, to develop the hydrogen industry, agreements were reached with Air Products, ACWA Power, and Siemens Energy companies on the implementation of pilot projects, as well as the organization of training programs with a practical internship at leading foreign technological facilities of hydrogen energy.
WHAT DO YOU EXPECT FROM THE VISIT OF THE PRESIDENT TO PARIS IN NOVEMBER?
The upcoming high-level visit of the head of our state to France is significant and undoubtedly will contribute to further expansion and strengthening of the Uzbek-French multilateral cooperation. As our President Shavkat Mirziyoyev noted during his speech at the first Central Asia-European Union summit: “the European Union is our key partner in the field of «green» development”. Thus, we see priority areas for cooperation in this area through the introduction of energy-efficient and resource-saving technologies, the digitalization of economic sectors, and the wide use of the potential of renewable energy sources. Taking into account the high level of technological and technical development of European companies, including French ones, we have a large untapped potential for developing cooperation.
We invite European partners to jointly implement the Strategy for the transition of the Republic of Uzbekistan to a “green” economy for the period 2022-2030, which was adopted after Uzbekistan joined the Paris Agreement. We are open and ready to further strengthen cooperation in all areas, whether it is the electric power industry, renewable energy sources, oil and gas, and chemical industries, as well as other sectors of interest. We look forward to productive and pragmatic cooperation, the results of which will be the achievement of common goals to further expand the presence of French companies in the Uzbek market, which in turn will serve to ensure sustainable economic growth.