In recent years, China has pivoted its investment strategy in Central Asia, particularly in Kazakhstan and Uzbekistan, towards renewable energy projects. Traditionally known for its substantial investments in fossil fuel infrastructure, such as the China–Central Asia gas pipelines and large-scale hydropower projects, China's focus has now expanded to include solar and wind power initiatives. This shift reflects both regional countries' growing interest in clean energy and China's evolving global investment framework under its Belt and Road Initiative (BRI),
Daryo reported.
Historically reliant on fossil fuels, Kazakhstan and Uzbekistan have turned towards renewable energy sources to mitigate environmental impact and address energy security concerns. Kazakhstan, for instance, successfully met its interim target of generating 3% of electricity from renewables by 2020 and aims for 15% by 2030 and 50% by 2050. Meanwhile, Uzbekistan, where solar and wind power currently constitute a small fraction of total renewable energy capacity, plans substantial increases—5 GW of solar and 3 GW of wind power capacity by 2030.
As noted in the article, a formal green diplomatic agenda between China and Uzbekistan only emerged after 2021. Nevertheless, Chinese involvement in Uzbekistan's renewable energy sector began earlier, driven by the initiation of renewable energy tenders in 2019 that captured Chinese companies' interest. Despite active participation in tender processes, Chinese firms have struggled to secure contracts due to competitive tariff proposals from competitors like Masdar from the UAE and ACWA Power from Saudi Arabia.
In 2022, GD Power-PowerChina became the sole Chinese company to win a bid for a 150 MW photovoltaic plant in Namangan, but the project was canceled due to its perceived high tariff. Despite these setbacks, Chinese companies remain committed to the Uzbek market, adopting two primary strategies to engage in major projects.
Firstly, while winning companies take on roles as developers, investors, and operators, Chinese firms typically engage through EPC contracts or as suppliers. For example, Masdar developed Uzbekistan's first large-scale photovoltaic plant, with SEPCOIII (a PowerChina subsidiary) providing EPC services. This pattern extends to wind projects, like ACWA Power's Bash and Dzhankeldy wind farms, where China Energy Engineering Corporation (CEEC) signed the EPC contract.
Chinese companies also play significant roles as suppliers, with agreements between Masdar and Goldwind for turbine supply in Tomdi, and Envision Energy supplying turbines for ACWA Power's wind farms. Additionally, JA Solar, a Chinese company, supplied n-type modules for ACWA Power's solar project in Tashkent, known for its efficient sunlight conversion.
The second strategy involves direct negotiations for project development in Uzbekistan, gaining momentum in 2022 amidst increased green energy cooperation. Notably, agreements were signed in 2023 for Chinese companies to build substantial solar photovoltaic plants in multiple Uzbek regions, representing a total of $4 bn in investment. Unlike previous international tenders, these projects were directly awarded to Chinese companies.
For instance, CEEC Energy China, Huaneng Renewables Corporation, and Poly Technologies secured agreements with the Uzbek Ministry of Energy to develop solar plants in Kashkadarya, Bukhara, Samarkand, Jizzakh, and Tashkent. Additionally, a memorandum of understanding was signed with China Huadian Overseas Investments, China National Electric Engineering Company, and SANY Renewable Energy to explore wind farm construction in Jizzakh.
Similar to Kazakhstan, China demonstrates alignment with Uzbekistan's localization requirements for renewable energy. Notably, preliminary agreements with Liaoning Lide Investment Holdings Group aim to produce renewable energy equipment in Karakalpakstan, an autonomous region within Uzbekistan, highlighting China's responsiveness to local demands.
