Russia losing Central Asian energy market – intelligence

Russia is losing its position as a key player in Central Asia's energy market.

That is according to Ukraine's Foreign Intelligence Service, Ukrinform reports.

The intelligence service noted that Central Asian countries, with support from the World Bank, are launching a project to create a single energy space that is expected to reshape the regional electricity market.

The REMIT program is designed for ten years and envisages integrating hydropower capacity in Kyrgyzstan and Tajikistan with thermal generation in Kazakhstan, Turkmenistan, and Uzbekistan, as well as with solar and wind power plants, based on the principle of energy synergy.

The intelligence service said the total cost of the system exceeds $1 billion, of which $143 million has already been financed.

"Until recently, Russia was considered one of the key players in Central Asia's energy market and sought to position itself as a coordinator of integration processes. Under its patronage, the Eurasian Economic Union promoted the idea of creating a joint energy hub in the region," the agency said.

However, Russia's war against Ukraine, international sanctions, and the lack of modern technologies among the main beneficiaries of the EAEU – Russia and Belarus – have effectively derailed these plans.

As a result, the project launch initially planned for 2025 has been postponed until at least 2027.

Meanwhile, Arzybek Kozhoshev, Minister for Energy and Infrastructure of the Eurasian Economic Commission, acknowledged that even 2030 may only be a tentative start date for the project.

He said the prospects of the Russia-led Eurasian energy hub remain uncertain due to the absence of a free gas market in Russia and significant differences in regulatory approaches among the participating countries.

"Against this backdrop, the REMIT initiative is more pragmatic and institutionally supported. According to World Bank estimates, the cumulative economic effect of its implementation by 2050 could reach $15 billion, making the project one of the largest infrastructure shifts in Central Asia in recent decades," the intelligence service said.