“Uzbekistan’s abundant renewable energy resources make it an ideal location for green hydrogen production,” said Matteo Patrone, Vice President of Banking at the European Bank for Reconstruction and Development (EBRD). In an interview with Daryo, Patrone shared insights into the EBRD’s ongoing and future projects in Uzbekistan and the broader Central Asian region. From financing renewable energy projects to modernizing trade logistics, the EBRD is positioning itself as a vital partner in the region’s green transition and long-term economic growth. This strategic investment comes at a critical time as Central Asia faces growing geopolitical challenges and the urgent need for economic diversification.
Hydrogen Projects and Potential in Central Asia
One of the most ambitious EBRD-led initiatives in Uzbekistan is the green hydrogen pilot project, in collaboration with ACWA Power and Uzkimyosanoat. The EBRD has committed $65 mn to this project, which involves the development of a 20 MW electrolyser powered by a 52 MW wind power plant. “This is our first involvement in green hydrogen in Central Asia, and we are very enthusiastic about its potential,” said Patrone.
Green hydrogen, produced from renewable energy sources, is seen as a key alternative for decarbonizing industries reliant on grey hydrogen—hydrogen derived from natural gas. In Uzbekistan, grey hydrogen is commonly used in ammonia fertilizer production. “This project will help replace grey hydrogen with green hydrogen, contributing not only to clean energy production but also to making Uzbekistan’s agriculture more sustainable,” Patrone explained.
This project positions Uzbekistan as a leader in green hydrogen production and could serve as a model for other Central Asian countries. “Uzbekistan’s abundant renewable energy resources make it a prime candidate for this kind of energy transition,” said Patrone. “By pioneering green hydrogen and ammonia production, Uzbekistan is making an important step towards achieving its decarbonization goals.”
Battery Energy Storage Systems and Energy Security
Complementing Uzbekistan’s green hydrogen efforts is the development of large-scale battery energy storage systems (BESS) to stabilize the country’s renewable energy grid. The EBRD is financing one of its largest BESS projects in the Tashkent region, which includes a 200 MW solar power plant and a 501 MWh battery storage facility.
“BESS technology is critical for managing the variability of renewable energy sources like solar and wind,” said Patrone. The project supports Uzbekistan’s long-term goal of installing 25 GW of renewable energy capacity by 2030. “Battery energy storage systems are vital to stabilizing the grid and ensuring reliable energy supply, especially during periods of peak demand,” he added.
This BESS project, one of the largest across all EBRD regions, is expected to have a strong demonstrative effect, encouraging further deployment of battery storage technology throughout Central Asia. “This project will be a model for other countries in the region looking to integrate more renewable energy into their grids,” Patrone emphasized.
Soft Connectivity and Logistics in Central Asia
In addition to energy projects, the EBRD is focusing on enhancing trade and logistics in Central Asia, particularly through soft connectivity measures. Central Asia’s strategic position between Europe and Asia gives it immense potential as a transit hub, especially in light of disrupted trade routes through Russia. One key route, the Trans-Caspian Corridor—also known as the Middle Corridor—is emerging as a critical trade link between Europe and Asia.
According to EBRD estimates, modernizing infrastructure along the Middle Corridor could require investments of approximately €18.5 bn. “This investment will be necessary to modernize container handling equipment, develop container terminals at the Caspian Sea, and double-track and electrify railway networks,” said Patrone. These upgrades will help ensure smoother and more reliable trade flows across the region.
However, physical infrastructure improvements are only part of the solution. “Soft connectivity measures, such as the digitalization of customs and border procedures and the harmonization of tariff systems, are equally important,” Patrone explained. “For businesses in Europe and Asia, it’s not just about how long it takes for goods to arrive, but knowing exactly when they will arrive to better manage their supply chains.”
Long-Term Decarbonization Strategy for Uzbekistan
As Uzbekistan transitions towards a greener economy, the EBRD is playing a pivotal role in shaping the country’s long-term decarbonization strategy. This strategy revolves around three key pillars: the rapid expansion of renewable energy, modernization of infrastructure, and promotion of energy efficiency.
“Uzbekistan has set ambitious targets for increasing its renewable energy capacity, particularly in solar and wind,” Patrone noted.
To support these goals, the EBRD is working closely with the government to create an enabling environment for investment in large-scale renewable projects. This includes regulatory reforms, financial incentives, and risk mitigation mechanisms designed to attract both domestic and international investors.
Modernizing Uzbekistan’s aging energy infrastructure is critical for integrating variable renewable energy sources. “The grid facilities, many of which date back to the Soviet era, need significant upgrades to accommodate renewables,” Patrone said. The strategy focuses on enhancing grid flexibility, investing in energy storage solutions, and implementing digital technologies to ensure reliability.
Energy efficiency is another important aspect of the strategy. “By reducing energy demand and minimizing losses, we can lower greenhouse gas emissions and reduce the strain on water resources,” Patrone explained. Smart grids and energy-saving technologies will play a central role in achieving these objectives, helping Uzbekistan meet its climate goals while ensuring energy security.
Methane Emissions Program: Reducing Uzbekistan’s Carbon Footprint
As part of its environmental goals, Uzbekistan has joined the Global Methane Pledge, committing to a 30% reduction in methane emissions by 2030. Methane, a potent greenhouse gas, is responsible for much of Uzbekistan’s emissions, particularly in the energy and agricultural sectors.
“Methane’s impact on global warming is significantly higher than CO2, making its reduction crucial to achieving Uzbekistan’s climate targets,” Patrone said.
The EBRD is assisting the government in developing a national methane emissions program, which will include policies for measuring and reducing methane emissions across the energy, waste, and agricultural sectors.
In 2017, Uzbekistan’s methane emissions were estimated at 73.1 mn tonnes of CO2 equivalent, with 69% coming from the energy sector and 28% from agriculture.
“Reducing methane emissions is critical for achieving national climate commitments and contributing to global efforts to combat climate change,” said Patrone.
The first pilot survey conducted at 14 natural gas facilities, 9 landfills, 4 sewage treatment plants, and 3 livestock farms aims to establish a national baseline for methane emissions. A roadmap for further reduction is expected by 2025.
Public-Private Partnerships: A Model for Infrastructure Development
Public-private partnerships (PPPs) are a cornerstone of Uzbekistan’s economic development strategy, particularly in addressing the country’s significant infrastructure gap.
“Private-public partnerships are absolutely crucial for infrastructure development, especially in countries like Uzbekistan where the infrastructure gap is so significant,” Patrone explained. He added that PPPs help crowd in private sector investment, which is vital for enhancing economic practices and governance.
Uzbekistan has already embraced PPPs in various sectors, with over 500 projects under this model. These projects range from energy and infrastructure to privatization efforts.
“In Uzbekistan, PPPs have been a vital tool for the investment portfolio,” Patrone noted.
He emphasized that increasing private sector participation is essential to closing the economic gap between Uzbekistan and its regional neighbors.
“The majority of banking assets in Uzbekistan are owned by state-owned banks, and this needs to change if we want to foster growth and competitiveness.”
Patrone also drew attention to successful PPP examples in neighboring countries, such as the “Big Almaty Ring Road” project in Kazakhstan, which is run by a consortium of Turkish and Korean companies. “And this is extremely relevant for Uzbekistan,” he remarked, suggesting that Uzbekistan could greatly benefit from similar models.
EBRD’s Broader Vision for Central Asia: Green, Inclusive, and Digital
The EBRD has set ambitious goals for Central Asia, with plans to invest $2 bn in the region in 2024. The bank’s strategy focuses on three main pillars: green transition, digitalization, and inclusivity, all aimed at fostering sustainable growth and improving regional connectivity.
“SMEs are the backbone of these economies, contributing significantly to employment and GDP,” said Patrone. The EBRD is supporting small and medium-sized enterprises through targeted products, including women-in-business and youth entrepreneurship initiatives.
In 2023, the EBRD invested more than €1.25 bn across 74 projects in Central Asia, with 60% of these investments classified as green. “Our projects are not only green but also inclusive and digital, addressing critical regional issues like water shortages,” Patrone noted.
The region’s economic growth remains resilient despite geopolitical challenges, with projections of 5.1% GDP growth in 2024, accelerating to 5.9% in 2025. “Central Asia is becoming an increasingly important player in global trade and energy transitions,” Patrone concluded. “With the right investments and partnerships, the region has the potential to become a key driver of global economic growth.”
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