The dynamics of cooperation between Uzbekistan and Saudi Arabia have a positive momentum. Riyadh would like to strengthen its ties with Central Asia. Regional states, on the other hand, desire to create diversity in partnerships and attract investment. This situation attracts the parties to each other and enables them to take steps to intensify their areas of cooperation. In particular, the energy crisis and resource diversity caused by the Russia-Ukraine War brought about an increase in communication with Riyadh. At this point, it is seen that the Saudi company ACWA Power plays a major role.
On March 21, 2023, ACWA Power signed an energy purchase and investment agreement for three new green projects with the joint stock company of Uzbekistan (JSC), the National Power Grid of Uzbekistan (NEGU), and the Ministry of Investment, Industry, and Trade. The agreements include the development of three solar photovoltaic (PV) projects in Tashkent and Samarkand and three battery energy storage systems (BESS) with a total capacity of 1.4 GW of additional renewable energy and 1.5 GWh.[1]
Under the plan, a 400 MW solar power plant and a 400 MW BESS in Tashkent, a 1,000 MW solar park and a 400 MW BESS in Samarkand, and finally a 400 MW BESS in Bukhara BESS will be built.[2]
The projects are expected to play a critical role in achieving the goals of Uzbekistan’s transition to a low-carbon economy and diversification of energy resources. It is known that the Government of Uzbekistan aims to produce 35% of its electricity from renewable sources by 2030 within the framework of energy reforms. It can be said that the agreements made are essential in terms of achieving this aim.
Taşkent, Semerkand ve Buhara PV ve BESS projeleri, ACWA Power ile Özbekistan Enerji Bakanlığı arasında 2022 yılının Ağustos ayında imzalanan yatırım anlaşmasının bir parçası niteliğindedir. With this agreement, ACWA Power planned to invest 10 billion dollars in Uzbekistan within five years. In this regard, three new electricity agreements worth 2.5 billion dollars are expected to contribute to the investment commitment of 10 billion dollars.[3] ACWA Power Chairman Mohammad Abunayyan expressed his satisfaction with the partnership and the impact of the agreements with the following words:[4]
“As the driver of the largest BESS projects in the region, we are fully equipped to stabilize the grid and accelerate Uzbekistan’s renewable energy agenda. With our commitment to investing a total of $7.5 billion in energy projects, we are determined to remain a key partner in achieving Uzbekistan’s energy diversification goals. ACWA Power is proud to be at the forefront of driving sustainable growth and powering a brighter future for Uzbekistan..”
Uzbekistan acts to attract Saudi capital to the country. Establishing mutually beneficial comprehensive partnerships and strengthening relations with the Persian Gulf states are among the priorities of Uzbek foreign policy. In connection with the dynamic growth of the population and economy in the country, deepening cooperation in the field of renewable energy is of strategic importance for Tashkent. Saudi Arabia is also trying to use its capital power to influence the region as an effective actor. It is seen that ACWA Power plays a leading role within the framework of cooperation between the two countries.
The point reached in ACWA Power investments constitutes a significant stage in the realization of Uzbekistan’s long-term plans and goals. Through step-by-step collaborations, the Riyadh-based company has expanded its global portfolio and become an active investor in Uzbekistan’s energy industry.
As it is known, on July 25, 2022, the delegation of the Ministry of Energy of Uzbekistan held a meeting with the Minister of Energy of Saudi Arabia, Abdel Aziz bin Salman Al Saud, and the representatives of ACWA Power held a meeting on the current cooperation targets and the determination of new projects.[5] After the meeting, in which future cooperation issues were discussed, partnerships and agreements came one after another.
ACWA Power announced in December 2022 that it will invest $2.4 billion to develop 1.5 GW wind projects in Uzbekistan and signed energy purchase agreements with the National Power Grid of Uzbekistan to develop the Kungrad Wind Farm.[6]
The energy issue was also discussed at the fourth meeting of the Uzbek-Saudi Business Council held on August 17, 2022. After the meeting, a total of 13.1 billion dollars contract was signed.[7] ACWA Power’s 10 billion dollar investment commitment agreement was signed during this visit of the President of Uzbekistan, Mr. Shavkat Mirziyoyev to attend the Business Council. It is seen that the visit in question took the relations between the two countries to a new stage and deepened the relations of ACWA Power with Uzbekistan.
With the partnership developed, Saudi Arabia has become one of the largest foreign investors in the energy sector of Uzbekistan. In this context, it can be predicted that large-scale projects of Saudi investors in the field of energy in Uzbekistan will increase. It is possible to say that ACWA Power will continue to maintain its prominent position. Furthermore, it can be said that the parties will carry out activities aimed at creating favorable conditions for a greater rapprochement between the business circles of the two countries. In this framework, Tashkent and Riyadh can agree on the implementation of new investment projects in promising sectors.
To conclude, ACWA Power has an important role in terms of achieving the goals of Tashkent within the scope of reform efforts, as well as strengthening its foreign relations and diversifying its partnerships.
[1] “ACWA Power Signs Agreements for Three New Green Projects in Uzbekistan”, Energy Global, https://www.energyglobal.com/solar/21032023/acwa-power-signs-agreements-for-three-new-green-projects-in-uzbekistan/, (Date of Accession: 24.03.2023).
[2] “ACWA Power to Add 1.4 GW of Solar, 1.2 GW of Storage in Uzbekistan”, Renewables Now, https://renewablesnow.com/news/acwa-power-to-add-14-gw-of-solar-12-gw-of-storage-in-uzbekistan-816611/, (Date of Accession: 24.03.2023).
[3] “ACWA Power Signs…”, a.g.m.
[4] “ACWA Power to Develop Solar and Energy Storage Projects in Uzbekistan”, Mercom India, https://www.mercomindia.com/acwa-power-storage-projects-in-uzbekistan, (Date of Accession: 24.03.2023).
[5] “Ministry of Energy of Uzbekistan and ACWA Power Start New Stage of Cooperation”, Uzreport, https://uzreport.news/economy/ministry-of-energy-of-uzbekistan-and-acwa-power-start-new-stage-of-cooperation, (Date of Accession: 24.03.2023).
[6] “Saudi Arabia’s Acwa Power to Build Two Solar Plants in Uzbekistan With 1.4GW Capacity”, World Energy, https://www.world-energy.org/article/29885.html#, (Date of Accession: 24.03.2023).
[7] “Uzbek-Saudi businessmen Sign Contracts Worth $13.1 Billion”, Kun.uz, https://kun.uz/en/news/2022/08/17/uzbek-saudi-businessmen-sign-contracts-worth-131-billion, (Date of Accession: 24.03.2023).
