Central Asia infrastructure inadequacies during hard winter underline need for energy transition investments says World Bank

Central Asia infrastructure inadequacies during hard winter underline need for energy transition investments says World Bank
/ bne IntelliNews
By bne IntelIiNews April 5, 2023

Central Asia is emerging from a challenging winter that brought the lowest regional temperatures in decades, during which outdated infrastructure—from power generation and heating to water supply—struggled to manage the strain region-wide, World Bank officials told The Astana Times following last month’s Central Asia Energy Trade and Investment Forum.

The event brought together policymakers from Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan.

Since independence, Central Asian countries have relied on their national resource endowments for most of their electricity generation – coal in Kazakhstan, gas in Uzbekistan and Turkmenistan and hydropower in the Kyrgyz Republic and Tajikistan, noted the World Bank. But despite these resources, the countries face challenges in keeping up with investments required to meet growing electricity demand, driven by strong economic growth, and aspirations of populations for higher standards of living and basic needs for more heating in cold weather, it said.

The essential challenge for the region is to attract investments in energy from the private and public sectors and ensure adequate returns. In addition, the international financial institution (IFI) observed, Central Asian countries use energy inefficiently, using two to three times more energy per unit of GDP compared to, for example, countries in the European Union. That’s because of poor insulation in buildings and the slow adoption of the latest energy efficient technologies. 

The good news, concluded the World Bank, is that the region has the natural resources endowment and the human capital required to take on both sides of the clean energy transition. The objective is a huge shift in energy supply towards cleaner sources, combined with a substantial lowering of energy demand via energy conservation and efficiency.  

The World Bank is also pushing for stronger regional electricity trade in Central Asia, backed by grid modernisation. This would effectively address national electricity supply-demand imbalances across the region and contribute to decarbonisation targets, the IFI said.

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