Central Asia is an important energy region with 3% of the world’s oil reserves, 12% of gas reserves, and significant potential for renewable energy sources. After the start of the war in Ukraine in 2022, the EU has increased its focus on the region, seeing it as a strategic partner for diversifying supplies and the green transition.

 

As emphasized in the EU Strategy for Central Asia, the goal is not to control resources, but to support reforms, harmonize legislation, and introduce environmental standards. This is being implemented through the Sustainable Energy Connections in Central Asia (2022–2026) initiative and the Global Gateway program, with investments of up to €12 billion in renewable energy, digitalization, and the environment. The EU offers a long-term partnership based on technology and sustainable development, which differs from resource-based strategies.

 

Today, the EU is one of the region’s largest economic partners, accounting for 22.6% of foreign trade and more than 40% of foreign direct investment. Its involvement in the energy sector takes the form of investment, technological support, and joint development of green solutions.

 

2. The EU as an investor in the energy sector of Central Asia. The EU plays a key role in Central Asia’s energy sector, providing not only investment but also access to modern technologies and expert support. In particular, the European Bank for Reconstruction and Development is a leading instrument, investing a record €2.26 billion in the region in 2024.

 

Most of these funds are directed towards sustainable and “green” infrastructure, including the modernization of networks and the construction of renewable energy facilities. Among the countries in the region, Uzbekistan and Kazakhstan received the largest amounts of investment.

 

For reference: key projects include the construction of high-voltage power lines in Kazakhstan and Uzbekistan, the region’s largest solar power plant with energy storage in the Tashkent region, and Central Asia’s first green hydrogen production project in Kazakhstan.

 

In addition, European companies are actively involved in the region’s energy development. The Italian company Eni owns shares in Kazakhstan’s largest oil and gas projects, while the French company Orano is involved in uranium mining in Kazakhstan and Uzbekistan. France covers a significant part of its nuclear power plant needs with uranium from the region, and the partnership in the nuclear sector continues to deepen.

 

The EU plays a leading role in harmonizing energy regulations, using the experience of the European Network of Transmission System Operators for Electricity (ENTSO-E) and the integration of the Balkan markets. Cooperation is conducted in the “5+EU” format and through bilateral agreements. The EU Strategy for Central Asia has been in force since 2019, and in 2023 a Roadmap with about 80 measures for the development of trade, climate, and energy was approved. All countries in the region have joined initiatives to reduce methane emissions and ratified the Paris Agreement. The EU provides technical assistance for energy sector reforms, competition development, and coordination on water resource management.

 

2023. The EU as a regulator of standards and provider of technological solutions. The EU has a significant influence on Central Asia’s energy sector, spreading its standards, norms, and technologies. Countries in the region, seeking to enter European markets, are adapting to these requirements, from environmental standards to market rules. One example is the EU carbon levy mechanism introduced in 2023. It affects exports of energy-intensive products, including steel, cement, and electricity, and involves the imposition of a carbon charge if the products are manufactured with high greenhouse gas emissions. This puts additional pressure on producers in Central Asia and at the same time creates incentives for modernising production, switching to renewable energy sources and improving energy efficiency. Kazakhstan and Uzbekistan have already begun to look for ways to reduce the carbon intensity of their products, including with the help of European initiatives and technologies.

 

For reference: With the support of the EU and the EBRD, the first industrial energy storage system in the region (500 MWh) has been launched in Uzbekistan. European companies such as Siemens, ABB, and Total Eren are participating in the construction of solar power plants, the modernization of substations, and the transition to high-efficiency generation.

 

III. Balance of opportunities and challenges in energy cooperation with the EU. Cooperation with the EU opens up opportunities for Central Asia to diversify its export markets, primarily by reducing its previous dependence on transit routes through Russia and on exports to volatile or limited markets such as China or the Middle East. More than 70% of Kazakhstan’s oil goes to Europe, with exports in 2024 exceeding 1 million barrels per day, making Kazakhstan the third largest supplier to the EU. After Niger stopped exporting natural uranium in 2023, Kazakhstan became its main supplier, covering over 40% of the EU’s needs. This ensures stable foreign exchange earnings and long-term contracts.

 

At the same time, direct exports to Europe are limited by the lack of a common border and gas pipelines – oil is transported via the Black Sea and transit countries. In these conditions, the EU’s practical contribution to the development of the region’s energy sector becomes particularly significant: investments are directed towards infrastructure renewal, the construction of power lines, and support for green energy projects. The EU also transfers technology — energy-efficient equipment, digital control systems, modern turbines, and metering systems. This local approach not only strengthens the reliability of energy systems but also prepares Central Asian countries to enter more stable and diverse external markets.

 

However, Central Asia is an area of active competition. Over the past 20 years, China has invested over $105 billion, mainly in infrastructure projects and raw material assets, while the UAE and Saudi Arabia are financing renewable energy projects, and Russia is maintaining its influence through critical infrastructure such as gas pipelines, power lines, and transport routes. The EU must create more flexible conditions to maintain the interest of countries in the region.

 

Moreover, cooperation with the EU contributes to the growth of energy professionals’ qualifications: more than 500 specialists from Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan have been trained through Erasmus+, European Commission, and other programs, as well as through partnerships with European universities and institutions. They are working on the development of tariff models, energy efficiency, and digital accounting systems.

 

Investments face barriers: in Kazakhstan, the tariff model has changed, and in Uzbekistan, there are delays in payments from state-owned companies. Fitch Ratings, which assesses the reliability of countries for investors, notes delay in obligations to investors, which required the creation of a special company that officially purchases electricity from private producers – Uzenergosotish – and additional guarantees from international institutions.

 

1. Strategic priorities and directions for the development of energy cooperation with the EU. Geopolitical changes and the reorientation of export flows reinforce the importance of Central Asia’s infrastructure connectivity with the EU. The Middle Corridor, a strategic transport route for sustainable logistics, is of particular importance. Kazakhstan is modernizing the ports of Aktau and Kuryk, expanding their throughput capacity and increasing the fleet of Caspian tankers for transporting oil to the port of Alat (Azerbaijan). Uzbekistan and Turkmenistan are renovating the port of Turkmenbashi, creating a regional logistics hub.

 

The China-Kyrgyzstan-Uzbekistan railway, construction of which began in 2022, will significantly reduce transit times for energy cargoes to Europe. The Trans-Caspian gas pipeline between Turkmenistan and Azerbaijan will be able to supply up to 15 billion cubic meters of gas to the EU annually, expanding export opportunities and strengthening the region’s energy autonomy.

 

To integrate with the European market, Central Asian countries need to eliminate fragmentation in tariffs, standards, and network management. The creation of a Central Asian Energy Community, modeled on the South-East European Energy Community, will provide legal certainty and cross-border electricity trade.

 

Overall, the potential of the partnership is far from exhausted. With the successful implementation of EU initiatives and the willingness of Central Asian countries to reform, it is possible to create a new energy space from Europe to Central Asia as an important element of global security and climate stability.

 

* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.