How Central Asia Is Pioneering a Scalable Solution for Energy Reform

Across the world, many governments face a common set of challenges: how to reduce greenhouse gas emissions, attract investment, and improve energy service delivery while implementing difficult reforms. In Central Asia, Uzbekistan and the Kyrgyz Republic are testing an approach that seeks to address all three issues at once. By combining policy reform, technical support, and results-based carbon finance, the two countries are pioneering a model that rewards measurable results and could offer lessons for other countries facing similar challenges.Why Reform Matters Reliable electricity underpins economic activity, from manufacturing and retail to health care and education. In Uzbekistan, businesses report that more reliable electricity has helped them expand operations and invest in new equipment. "Ten years ago, we relied on generators. Today electricity is reliable enough for us to expand our operations, invest in new equipment, and create new jobs," says Adham Anorov, the owner of a building supplies company in the country’s Samarkand region that now operates a laser cutter for sheet metal. But maintaining and expanding energy infrastructure requires utilities to have the resources needed to operate, maintain, and modernize their systems. In addition, saving energy is far more cost-effective and should be pursued alongside generation expansion. For decades, many countries have kept energy prices below cost-recovery levels to shield consumers from higher bills. While well-intentioned, these policies can encourage overconsumption of energy use, strain public finances, and leave utilities without sufficient resources to invest in better services. Reforming energy subsidies can help address these challenges, but such reforms are often politically and socially complex.