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New Regional Energy Strategy Maps Path to Secure Energy Future for CAREC Region

News Release | 14 November 2019

TASHKENT, UZBEKISTAN (14 November 2019) — Ministers from the 11 members of the Central Asia Regional Economic Cooperation (CAREC) Program have endorsed a new long-term strategy to improve energy security, increase investment, and improve the sustainability of energy systems in the region, setting it on a path toward achieving a secure energy future.

The CAREC Energy Strategy 2030 outlines a set of initiatives and policy recommendations to be implemented over the next decade based on regional cooperation, embracing energy market reforms, and deploying more green technology. It was endorsed today at the 18th CAREC Ministerial Conference held in Tashkent.

“Today’s endorsement of a new energy strategy for CAREC members is a landmark moment,” said Asian Development Bank (ADB) Vice-President Mr. Shixin Chen, the co-chair at the CAREC Ministerial Conference.  “Based on multilateral and bilateral cooperation, CAREC now has a roadmap toward a future in which electricity supply is reliable, affordable, cleaner, and more sustainable—conditions that are vital to ensuring continued economic development.”

The strategy responds to several challenges facing the region’s energy sector. CAREC countries are rich in natural resources, but uneven distribution of these resources—compounded by inadequate infrastructure and inefficient energy utilities—means some countries continue to face power shortages. The region is estimated to need around $400 billion in investments by 2030 in order to meet increasing demand for power.

By working together, CAREC members will be able to create new regional governance systems to manage transmission systems centrally. Elevating the grid and pipeline planning from the national to regional level will lead to a larger and more integrated energy market. This will mean it is better equipped to cover seasonal variability and uneven distribution of energy across the region. Creating a stable power supply also enables export to energy markets, such as the People’s Republic of China (PRC), Pakistan, and India, along with new strategic transit opportunities for oil and gas through Turkey and Georgia.

To attract more investment, the strategy sets out comprehensive support for CAREC members to manage the ongoing structural reforms in their domestic energy markets. As market structures move from vertically integrated to unbundled and liberalized systems, support will be provided to crowd-in investment capital and encourage greater private sector involvement. Particular emphasis will be placed on measures to protect vulnerable consumers and build social safety nets to ensure a sustainable and socially acceptable reform process.

The strategy also emphasizes greater energy efficiency initiatives and significantly increases support for the deployment of renewable energy in a region where installed solar and wind currently amounts to less than 1% of total capacity. A new regional financing vehicle—the CAREC Green Energy Alliance—will be created to help members seek cofinancing for investments in energy efficiency, renewable energy, and other climate mitigation projects. Together, these initiatives will help to reduce CAREC members’ dependence on fossil fuels.

The strategy also includes a major component focused on the empowerment of women. By introducing policies to enhance the employability of women in the region’s energy industry, the objective is to create the conditions for women to become a greater driver of innovation in the energy industry, enable a more inclusive and diverse workforce, and ultimately close the gender gap in CAREC.

Mr. Ashok Bhargava, Director of the Energy Division at ADB’s Central and West Asia Department, said, “While the energy sector has done remarkably well during a challenging period of rapid growth, the implementation of a shared vision by CAREC members has the potential to deliver far reaching benefits to regional economies in the next decade in terms of new investment, jobs, skills, and knowledge development.”

The CAREC Program is a partnership of 11 countries—Afghanistan, Azerbaijan, the PRC, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan—to promote economic growth and development through regional cooperation, and supported by development partners. ADB hosts the CAREC Secretariat in its headquarters in Manila.

Since 2001, the CAREC Program has financed 200 regional projects worth $37.0 billion in the areas of transport, energy, and trade. Of this, $14.0 billion has been financed by ADB; $14.8 billion by other development partners such as the World Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development; and $8.2 billion from CAREC governments.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.