Uzbekistan's energy sector is attracting billions of dollars from the Persian Gulf as the country plans to produce 35% of its electricity from renewable sources by 2030, Arabian Gulf Business Insight reports.
Uzbekistan has 330 sunny days on average per year, and the possibility of producing solar energy is enormous. This has spurred companies such as Saudi-based Acwa Power and UAE-based Masdar to make significant investments in the energy sector of the country.
According to the International Green Energy Agency, Asia will account for nearly half of all green energy sources by 2022.
Acwa Power's newest $2.5bn agreement with Uzbekistan will see the development of three solar projects totaling 1.4 GW and three battery energy storage devices totaling 1.5 GWh.
The contracts come after the business announced in December that it would construct three wind farms in the country.
Other GCC-based firms, including Masdar, Taqa, and Mubadala, have moved to invest in Uzbekistan's energy industry.
Trade reforms
In August of last year, Saudi Arabia and Uzbekistan inked a $12bn investment deal to investigate possibilities in areas such as aircraft, cattle, agriculture, athletics, education, science, mass media, energy, and technology.
The volume of commerce between Uzbekistan and Saudi Arabia hit $95mn in the first half of 2022, up from $17mn in 2021. Following that, at the close of the year, Tashkent hosted the Uzbekistan-Saudi Arabia business conference.
Uzbekistan's commercial exchange with Dubai is also increasing and is expected to more than double to more than $500mn by 2022.
The Dubai International Chamber stated last week that as part of its "New Horizons" trade mission, it conducted 150 meetings between Dubai and Uzbek businesses. The meeting is intended to back Dubai's goals to boost international trade to $7 trillion over the next decade.
According to Mohammed Loota, president and CEO of Dubai Chambers, Central Asia has "huge growth potential for mutual trade."
Investment opportunities
The Dubai International Chamber, which was founded to improve ties with foreign corporations and investors, also selected Tashkent this week to start the first round of "New Horizons" trade missions.
Acwa Power also recently inked deals in the nation to create a green hydrogen station and a green ammonia pilot project, which makes Uzbekistan its second-largest market following Saudi Arabia.
In addition, the Uzbek government intends to create 15,000 MW of green energy to help balance 16mn tons of CO2 emissions per year.
Uzbekistan will soon possess the most massive storage facilities in Central Asia thanks to the integration of battery energy storage devices into the grid. This is critical for supply stability while also supporting green energy sources.
"With our total investment commitments of $7.5bn in energy projects, we are determined to remain a key partner in achieving Uzbekistan's energy diversification goals," - said Acwa Power Chairman Muhammad Abunaiyan.
The facilities are anticipated to be operational in the Q3 of 2025-2026.
Mubadala Investment Company (Taqa) and Abu Dhabi National Energy Company inked a deal in September to participate in the privatization of two gas-fired power plants in Uzbekistan.
UAE clean energy giant Masdar also said it has reached financial close on the 500 MW Zarafshan wind project, the largest renewable energy project in Central Asia.