Greening the Grid by Opening Up: Energy Sector Reforms in Uzbekistan

Greening the Grid by Opening Up: Energy Sector Reforms in Uzbekistan

Uzbekistan entered the late 2010s with an energy system defined by aging Soviet‑era infrastructure, chronic outages, high transmission losses, and overwhelming dependence on natural gas. After President Mirziyoyev took office in 2016, the government launched sweeping reforms to open the economy, liberalize currency controls, and modernize the power sector. New legislation enabled public‑private partnerships, guaranteed grid access for renewable producers, and broke up the state utility Uzbekenergo into separate generation, transmission, and distribution companies. These reforms created the institutional foundation for competitive renewable energy procurement and began shifting the country away from a fully state‑run model.

This case follows how Uzbekistan partnered with the World Bank’s Scaling Solar program to run its first competitive solar tender—the 100 MW Navoi pilot—which attracted strong international interest and delivered a tariff far lower than previous unsolicited proposals. The success of Navoi accelerated a nationwide rollout of renewable procurements, including the 500 MW Uzbekistan Solar 3 tender and new mandates with the IFC, ADB, and EBRD. Even with this momentum, the country still faces structural challenges: electricity tariffs remain below cost recovery, subsidies remain large, and the government continues to balance competitive tenders with directly negotiated deals. This case shows how opening markets and partnering internationally can rapidly transform an energy sector—but sustaining those gains requires resolving persistent structural challenges.