Power Energy Sector Of Uzbekistan

This review provides for an overview of the power energy sector of Uzbekistan, being currently subject to a large-scale transformation.

The legal and economic structure of the power industry of Uzbekistan has always been relatively simple. Proceeding from the assumption that the provision of electric power is a natural monopoly, where the single state-owned monopolist can be the most efficient supplier, the Uzbek government has long maintained a model where the single incumbent - JSC Uzbekenergo, has been responsible for the power generation, transmission, distribution, dispatch management, and retail sales, operating through its affiliates in each region of the country. Over the past years, however, the government has become increasingly dissatisfied with the performance of the industry and currently, seeks to enhance competition within the sector.

The Presidential Decree providing for the unbundling, privatization and the attraction of foreign investment to the power industry was signed on 27 March 2019. According to it, JSC Uzbekenergo ceased to exist and 3 recently established joint-stock companies replaced the holding company, as explained below. (Please download the pdf version of the document at the link below where these developments are presented schematically).

Institutional framework

The regulatory functions used to be entrusted to JSC Uzbekenergo are now in the hands of several state regulators.

The Ministry of Energy, established on 1 February 2019, is responsible for, among other things, preparation and implementation of energy policies, plans and programmes in the power energy, renewable energy, and oil and gas industries in coordination with its affiliated institutions: Uzenergoinspektsiya, Uzneftegasinspektsiya, the Agency for Development of the Nuclear Industry - UzAtom and the Non-Commercial Organization for Implementation of Production Share Agreements. Some of the Ministry's other functions include the regulation and supervision over the functioning of the power energy, gas, nuclear and renewable energy industries, the monitoring of the energy consumption efficiency, and implementation of projects under production share agreements. The abovementioned Uzenergoinspektsiya and Uzneftegasinspektsiya control compliance with relevant state standards in the power energy and gas industries respectively.

The main regulators also include the Ministry of Finance, exercising price regulation and general control over financial flows...

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