As Uzbekistan advances its energy market, regulation has become a topic of great interest for its government and stakeholders, leading to the establishment of the Agency for the Development and Regulation of the Energy Market of Uzbekistan – the Regulator. Since its inception, USAID’s flagship energy project Power Central Asia has been supporting the establishment of this new agency by providing essential equipment, targeted training and working group discussions. Most importantly, this support helped formulate documentation needed by the Agency and the development of a new law, which further solidified its position as a key state regulatory body for the first time.

USAID’s fruitful partnership has already contributed to the signing of the “Law On the Electric Power Industry” by the President of Uzbekistan, marking another significant milestone in the country’s energy sector reform. This law defines the roles and responsibilities of various participants in the electricity market and introduces a new framework for setting tariffs and payments, which will be regulated by the Agency, ensuring transparency and stability in the energy market. With diligent oversight from the Regulator, Uzbekistan’s power market will operate more efficiently, investors will find greater confidence, and consumers can enjoy more reliable services.

To help the newly established Agency, USAID organized a study tour to Türkiye, a country with similar experience and market structure. Led by Mr. Umid Mamadaminov, Deputy Minister of Energy of Uzbekistan, and Mr. Sherzod Xo’jayev, Director of the Regulator, the delegation learned from the Türkiye’s remarkable success in establishing a robust and liberalized energy market.

In Ankara, the Uzbek delegation was warmly welcomed by counterparts at the Turkish Energy Market Regulatory Authority (EPDK), where the President of EPDK shared insights into key milestones of the 20 plus year journey toward European Union-compliant structures in the country. The discussion provided an opportunity for Mr. Sherzod Xo’jayev and his team to gain invaluable knowledge for international cooperation and progress for Uzbekistan’s Regulator.

“Constructive dialogue with the host party continues to this day,” noted Mr. Sherzod Xo’jayev.

These discussions included intensive roundtable discussions and presentations, where the Uzbek delegation absorbed a wealth of information on many aspects of energy market regulation, unbundling processes, market structures, tariff regulations, strategies for energy transition, regulatory frameworks, and strategies for integrating renewable energy sources into the grid.

At the Turkish Ministry of Energy and Natural Resources, Deputy Minister Zafer Demircan shared ambitious plans for climate change mitigation and emphasized the importance of decarbonization in the energy sector. In turn, Deputy Minister Umid Mamadaminov expressed keen interest in learning from Türkiye’s experiences, especially in addressing grid integration challenges posed by renewable energy sources. The delegation’s visit to the Turkish Electricity Distribution Services Association provided further insights into electricity distribution privatization and market reforms. The study tour concluded with a visit to Energy Exchange Istanbul (EXIST) in Istanbul, where the delegation learned about innovative market mechanisms such as power futures trading, as it is used in pursuit of sustainable growth.

Equipped with new information and knowledge, the six energy professionals in the delegation returned home with a clear roadmap for transforming their nation’s energy market and to implement key reforms, including unbundling processes, tariff regulations, and strategies for integrating renewable energy sources. 

And the collaboration continues, notes the Director of the Regulatory Agency, Mr. Sherzod Xo’jayev:

“Following the visit, the delegation reached an agreement on continuing communication and studying experience. Taking into account the political course of the Republic of Uzbekistan on liberalization and creation of favorable conditions for competition, these meetings were of great practical importance.” 

The Agency has signed a Cooperation Agreement with the Turkish EPDK to formalize the partnership and enable the Agency staff to study the Turkish experience in energy market development, strengthening bilateral cooperation in this area between the countries. As the Regulator’s influence continues to grow, the lessons learned, and agreements forged during the study tour will help move toward a modern and competitive energy market.

USAID is proud to support the Agency to ensure a future where energy is not just abundant, but equitable, reliable, and sustainable for all.

Source: USAID Central Asia