Overview of Renewable Energy Legislation in Uzbekistan

I. INTRODUCTION

Uzbekistan is undergoing a fundamental transformation of its electricity sector, driven by increasing electricity demand, the need to strengthen energy security, declining availability of domestic natural gas resources, and the Government’s strategic objective of attracting private investment into infrastructure sectors. Historically, Uzbekistan’s electricity system has been dominated by gas-fired thermal generation and state-owned enterprises operating under a vertically integrated model. However, since 2019, the Government has pursued an ambitious reform programme aimed at diversifying generation capacity, introducing private participation and creating a competitive electricity market.

Renewable energy has become a central element of this transformation. Uzbekistan possesses substantial renewable energy potential, particularly in solar and wind generation, due to its high levels of solar irradiation, large areas of unused land and favourable climatic conditions. According to government estimates, Uzbekistan has technical renewable energy potential exceeding 2.5 trillion kWh. The country’s geographical conditions are particularly favourable for utility-scale solar photovoltaic (PV) projects, while wind potential is concentrated primarily in the Republic of Karakalpakstan, Navoi, Bukhara, Jizzakh, Surkhandarya and other regions.

Historically, hydropower represented the principal renewable energy source in Uzbekistan. The country has approximately 2GW of installed hydropower capacity, accounting for a significant portion of renewable generation. However, future renewable expansion is expected to be driven predominantly by solar and wind projects.

The Government has therefore adopted an ambitious programme to increase renewable generation capacity. Under current energy policy objectives, Uzbekistan aims to achieve a renewable energy share of approximately 50 per cent of electricity generation by 2030, supported by the commissioning of large-scale solar and wind power plants, battery energy storage systems (BESS), modernisation of transmission infrastructure and gradual electricity market liberalisation. As part of this programme, Uzbekistan has already attracted significant international investment into renewable energy. Since 2019, the Government has successfully implemented a series of competitive tenders for independent power producer (IPP) projects, resulting in the entry of major international renewable energy companies into the Uzbek market.

Key international investors and developers participating in Uzbekistan’s renewable energy sector include Masdar, ACWA Power, Voltalia, TotalEnergies, and other international strategic investors and infrastructure funds. 

The entry of these investors has been facilitated by a new legal framework based on competitive procurement, long-term electricity purchase agreements, investment agreements and support from international financial institutions. Renewable energy projects in Uzbekistan have been financed with the participation of institutions including the International Finance Corporation, European Bank for Reconstruction and Development, Asian Development Bank and Asian Infrastructure Investment Bank.

The legal framework governing renewable energy development is principally based on the following legislation:

- the Law of the Republic of Uzbekistan No. ZRU-539 dated 21 May 2019 “On the Use of Renewable Energy Sources” (the RES Law);

- the Law of the Republic of Uzbekistan No. ZRU-939 dated 7 August 2024 “On Electricity” (the Electricity Law);

- the Tax Code;

- the Land Code;

- environmental legislation, including legislation governing environmental impact assessment and ecological expertise; and

- numerous Presidential Decrees and resolutions of the Cabinet of Ministers regulating renewable energy procurement, electricity market reform, investment incentives and infrastructure development.

The adoption of the Electricity Law in 2024 represents a significant milestone in the development of Uzbekistan’s energy sector. The law replaced the previous electricity sector framework and introduced a modern regulatory architecture covering electricity generation, transmission, distribution, supply, trading and storage. Importantly, it established the legal foundation for gradual transition from a state-controlled electricity model towards a market-based system with increased private sector participation.

Unlike some jurisdictions in Central Asia, Uzbekistan has not historically relied on feed-in tariffs as the principal mechanism for renewable energy development. Instead, the Government has adopted a competitive auction and tender-based model, whereby renewable energy developers compete for long-term electricity purchase arrangements.

The development of renewable energy has also become closely linked with electricity market reform. The Government recognises that increasing renewable generation, particularly intermittent solar and wind generation, requires substantial investment in grid infrastructure, balancing capacity and electricity storage.

Uzbekistan has increasingly prioritised the deployment of battery energy storage systems. Recent renewable energy projects have incorporated BESS components to improve system flexibility, reduce curtailment risks and facilitate integration of variable renewable generation into the national grid.

The next stage of Uzbekistan’s energy transition will likely focus not only on increasing renewable generation capacity but also on developing storage technologies, strengthening local supply chains and creating a more competitive electricity sector capable of supporting long-term economic growth.

II. THE YEAR IN REVIEW

The period spanning 2025 and the first half of 2026 has been marked by the continued acceleration of Uzbekistan's energy sector reforms. The Government has maintained its policy of combining large-scale renewable energy deployment with broader electricity market liberalisation, expansion of transmission infrastructure and increased participation of private and foreign investors. At the same time, attention has increasingly shifted from the mere construction of generation facilities towards ensuring grid stability, integrating battery energy storage systems (BESS), strengthening transmission capacity and improving energy efficiency across the economy. 

i. Expansion of renewable generation

Renewable energy remained the principal driver of new electricity generation capacity during the review period. By early 2026, Uzbekistan's total installed generation capacity had reached approximately 25.8GW, of which approximately 8GW (31 per cent) consisted of renewable energy sources, including solar, wind and hydropower. Electricity generation is expected to total around 90 billion kWh in 2026, marking an increase of approximately 40 per cent compared with 2020 levels.

The Government has continued to rely primarily upon competitive procurement procedures supported by international financial institutions. Consequently, Uzbekistan remains one of the most active renewable energy markets in Central Asia for international independent power producers, with projects implemented by leading international developers including Masdar, ACWA Power, EDF Renewables, Voltalia, TotalEnergies, China Energy and several other strategic investors. 

ii. Development of battery energy storage systems

One of the most significant developments during the review period has been the rapid deployment of battery energy storage systems (BESS). While Uzbekistan's initial renewable energy reforms focused primarily on electricity generation, Government policy has increasingly recognised that large-scale energy storage is essential for integrating intermittent solar and wind generation into the national electricity system.

Following the commissioning of the country's first utility-scale BESS projects in 2024, a substantial expansion occurred during 2025, when 10 energy storage systems with an aggregate capacity of approximately 1,245MW entered operation. During 2026, an additional 884MW of storage capacity is scheduled for commissioning, while the Government has announced a long-term objective of increasing national battery storage capacity to approximately 4.5GW by 2030. 

The deployment of BESS has become an integral component of Uzbekistan's renewable energy strategy. Storage facilities are intended to reduce renewable energy curtailment, improve frequency regulation, balance evening peak demand and defer costly investments in conventional peaking generation.

iii. Expansion of electricity transmission infrastructure

The rapid commissioning of renewable generation has highlighted the need for substantial investment in transmission infrastructure. During a Presidential meeting held in February 2026, particular emphasis was placed upon ensuring that the expansion of transmission networks keeps pace with new generation capacity. It was recognised that delays in constructing high-voltage transmission lines could create bottlenecks capable of constraining further renewable energy development. 

In this regard, the Government announced the construction of several major high-voltage transmission projects, including the Talimarjan-Sugdiyona, Syrdarya-Khalka and Karakul-Nurabad transmission corridors, together comprising more than 600 kilometres of new transmission lines. Additional investments are also planned for the expansion of the electricity network serving the Tashkent metropolitan area and the strengthening of regional interconnections, including the Surkhan-Puli-Khumri transmission line designed to enhance cross-border electricity exchanges. 

iv. Localisation of renewable energy manufacturing

Alongside investment in generation assets, the Government has continued pursuing industrial policies aimed at increasing domestic manufacturing capacity for renewable energy equipment.

During 2025, Uzbekistan commissioned a domestic transformer manufacturing facility, while additional localisation projects were announced for 2026 covering the manufacture of high-voltage cables, transmission equipment, wind turbine towers, turbine blades and battery energy storage components. According to the Government, the value of locally manufactured equipment incorporated into energy investment projects is expected to exceed US$1 billion during 2026. 

These measures form part of a broader strategy to develop domestic industrial capacity while reducing dependence upon imported equipment and strengthening local supply chains.

v. Energy efficiency and diversification of the power sector

Renewable energy deployment has been accompanied by broader reforms for improving overall energy efficiency and ensuring long-term security of electricity supply.

The Government has announced programmes intended to reduce electricity consumption through efficiency measures across industrial enterprises and public infrastructure, while simultaneously expanding district heating and cogeneration capacity. In addition, Uzbekistan continues to pursue the development of nuclear energy as part of its long-term generation strategy, viewing nuclear generation as complementary to renewable energy rather than as a competing technology. 

III. POLICY AND REGULATORY FRAMEWORK

i. The policy background

Over the past decade, Uzbekistan has undertaken comprehensive reforms of its energy sector with the objectives of ensuring energy security, attracting private investment, reducing dependence on natural gas-fired generation and achieving its climate commitments. Renewable energy has become one of the principal pillars of these reforms.

The foundational reform came in 2019, when President Shavkat Mirziyoyev's government adopted Presidential Decree No. PP-4249 "On the Strategy for the Further Development and Reformation of the Electric Power Industry," established the Ministry of Energy as the sector's lead authority (Presidential Order No. UP-5646, February 2019), and enacted the twin pillars of the current legal regime: the Law "On the Use of Renewable Energy Sources" (No. ZRU-539, in force from 22 May 2019) and the Law "On Public-Private Partnership." Uzbekistan had ratified the Paris Agreement in 2018 and committed, in its Nationally Determined Contributions, to cutting greenhouse gas emissions per unit of GDP by 10% by 2030 against a 2010 baseline - a target later raised to 35% at COP26 in 2021.

Successive policy documents have progressively lifted the country's renewable ambitions: the 2019 Concept Note for Ensuring Electricity Supply set an initial target of roughly 25% renewables share by 2030; the Ministry of Energy's subsequent roadmap raised the solar-and-wind capacity target to 8 GW by 2026 and contemplated 12 GW of solar and wind by 2030; and, most recently, the government's stated target — as of early 2025 — is for renewables to supply 50% of generation by 2030, alongside the accelerated retirement of thermal plants over 30 years old.

For 2026 alone, Uzbek authorities have targeted the commissioning of 6.7 GW of new capacity across all technologies, comprising approximately 2.8 GW of solar, 470 MW of wind, 68 MW of hydro, 884 MW of battery storage and 2.5 GW of new thermal (largely gas-fired) capacity.

ii. Legislative framework

The principal legislative acts include:

- the Law of the Republic of Uzbekistan No. ZRU-539 dated 21 May 2019 "On the Use of Renewable Energy Sources" (the RES Law);

- the Law "On Electric Power", which entered into force in 2024 and substantially modernised the legal regulation of the electricity sector;

- the Law "On Public-Private Partnership";

- the Law "On Investments and Investment Activities";

- the Land Code;

- the legislation governing environmental impact assessment (EIA) and environmental protection;

- the Tax Code and Customs Code; and

- numerous resolutions of the Cabinet of Ministers regulating tender procedures, electricity market operations, licensing, technical connection and state support measures.

Together, these legislative instruments establish the legal framework governing project development, land acquisition, licensing, construction, operation, electricity sales, investment protection and state support for renewable energy projects.

iii. Institutional framework

Institutionally, the sector has been progressively unbundled. Historically, National Electric Grids of Uzbekistan (NEGU), a joint-stock company under the Ministry of Energy, combined the roles of transmission system operator and single buyer of electricity from all generators. Since 1 July 2024, that single-buyer/procurement function has been transferred to a newly created entity, Uzenergosotish (UES), leaving NEGU responsible solely for grid operations. As a practical consequence, a generator seeking to sell power in Uzbekistan today typically requires two separate agreements: a power purchase agreement (PPA) with UES, and a distinct transmission connection agreement (TCA) with NEGU governing physical grid access, whereas prior-generation PPAs bundled both functions into a single contract. A National Dispatch Center, established under the Ministry of Energy in March 2022, performs national and regional dispatch functions. Earlier policy documents also envisaged the creation of a financially independent power market regulator and a competitive wholesale market, though the pace and final institutional shape of that reform continues to evolve.

iv. Licensing, permitting and project approvals

Renewable energy projects are subject to a number of regulatory approvals depending upon the scale and nature of the project.

Typically, utility-scale projects require allocation or lease of an appropriate land plot, environmental impact assessment (where applicable), technical conditions for grid connection;, construction permits, compliance with urban planning and construction legislation, commissioning procedures following completion of construction, and registration of generating facilities in accordance with applicable electricity legislation.

Large utility-scale projects implemented through government tenders are generally developed pursuant to project-specific investment agreements, PPP agreements or other contractual arrangements concluded with the Government.

These agreements typically allocate project risks, establish construction obligations, regulate land rights and specify the applicable electricity purchase arrangements.

IV. RENEWABLE ENERGY PROJECT DEVELOPMENT
 
i. Project finance transaction structures

Renewable energy projects in Uzbekistan are generally implemented using an independent power producer (IPP) model. Since the commencement of the electricity sector reforms, the Government has increasingly relied on private investment for the development, financing, construction and operation of utility-scale renewable energy facilities, while retaining state ownership of the transmission network.

Most large-scale projects are financed on a limited recourse project finance basis, whereby the successful bidder establishes a special purpose vehicle (SPV) incorporated in Uzbekistan to develop and operate the project. The SPV typically enters into a suite of project agreements, including a long-term power purchase agreement, a land lease agreement or land allocation instrument, a grid connection agreement, financing agreements with commercial lenders, development finance institutions and export credit agencies; and direct agreements between the Government, lenders and the project company providing customary step-in rights and lender protections.

The majority of utility-scale solar and wind projects have been procured through internationally competitive tenders organised with the assistance of the International Finance Corporation (IFC), the World Bank or the Asian Development Bank. Standardised project documentation developed under these programmes has significantly enhanced the bankability of Uzbek renewable energy projects and facilitated international financing.

ii. Government support and investment incentives

The Government has introduced a range of measures designed to encourage private investment in renewable energy.Depending upon the structure of the relevant project, investors may benefit from long-term PPAs providing stable revenue streams, government support under implementation agreements, access to land for project development, customs and tax incentives available under applicable legislation, protection under the Law on Investments and Investment Activities, currency convertibility protections incorporated into project documentation, and assistance from multilateral development institutions during project preparation and financing.

In addition, Uzbekistan has concluded bilateral investment treaties with numerous jurisdictions, providing qualifying foreign investors with additional protections under international investment law, including access to investor-state dispute settlement mechanisms.

iii. Major renewable energy projects

Since 2020, Uzbekistan has awarded numerous utility-scale renewable energy projects through competitive tenders.

Among the most significant projects are:

- the Navoi, Samarkand, Jizzakh and Sherabad solar photovoltaic projects developed by Masdar; 

- the Bash and Dzhankeldy wind power projects developed by Masdar, representing some of the largest onshore wind projects in Central Asia; 

- multiple wind projects developed by ACWA Power, including projects incorporating utility-scale battery energy storage systems; 

- numerous hydropower modernisation projects implemented by Uzbekhydroenergo. 

These projects represent several billions of US dollars in foreign direct investment and have substantially increased Uzbekistan's renewable generation capacity. The Government has announced that additional competitive tenders for solar, wind and battery energy storage projects will continue through the remainder of the decade as part of its strategy to achieve approximately 20GW of renewable generation capacity by 2030.

V. DISTRIBUTED AND RESIDENTIAL RENEWABLE ENERGY

Distributed and residential renewable generation remains far smaller in scale than the utility segment but has expanded meaningfully since 2023. Key features of the current regime include:

- a targeted state programme for the installation of some 150,000 small rooftop solar systems (2-3 kW) and solar water heaters, aimed at covering 2–2.5% of households;

- tax relief for small-scale, self-generation installations: from 1 April 2023, individuals and legal entities installing renewable energy systems of up to 100 kW have been exempt from property tax, land tax and income tax for three years, extendable to ten years where the installation includes an energy storage component;

- free technological grid connection for systems up to 15 kW, removing a significant cost barrier for households and small businesses; and

- equipment-quality controls: since 1 January 2025, the import and use of solar modules not included in the Bloomberg New Energy Finance (BNEF) "Tier 1" bankability list has been prohibited, a measure intended to protect consumers and preserve eligibility for the tax incentives described above.

By May 2026, officials reported that more than 2 GW of solar capacity had been installed on residential rooftops nationally, alongside the announced (though not yet fully implemented) intention to introduce feed-in arrangements allowing households and small businesses to sell surplus self-generated electricity back to the grid, and to phase in time-of-day electricity tariffs for residential consumers.

VI. OTHER KEY CONSIDERATIONS
 
i. Grid stability and curtailment

Uzbekistan's experience illustrates a pattern common to several fast-growing renewables markets: policy success in attracting generation investment has outpaced investment in transmission, distribution and system management. Between 2019 and 2023, total electricity consumption grew by more than 25%, while domestic gas production declined. 

NEGU's own system studies indicate that numerous network facilities are, or will be, close to their thermal and stability limits given combined load growth and renewables integration, and the operator has been examining a combination of transfer-capacity upgrades, additional transformer capacity at constrained substations, and special protection schemes to manage the risk. As a result, Uzbekistan has had to cut back significant amounts of wind and solar power it could otherwise have used. One local academic estimate puts 2025 curtailment at over 3,000 GWh - roughly a third of the useful renewable power generated that year. The grid also suffered two major nationwide power crises in 2022: one in January, triggered by an emergency imbalance in the broader Central Asian power grid, and another in December, during an extreme cold spell. 

ii. Battery storage

Battery energy storage is increasingly being bundled into new renewable procurement, both to manage curtailment and to firm intermittent output. Several renewable energy projects currently under development incorporate co-located BESS, while additional standalone storage facilities are expected to be procured over the coming years.

Although Uzbekistan does not yet have a comprehensive legislative framework specifically regulating energy storage as a separate market activity, the Government has increasingly incorporated BESS into project-specific procurement programmes and long-term electricity planning.

Further regulatory development is expected as storage technologies assume a more significant role within the electricity market.

iii. Green hydrogen and export-oriented instruments

The government has also begun developing a green hydrogen pipeline, including agreements with ACWA Power for phased hydrogen projects using renewable power to displace natural gas in the production process, and has continued to sign fresh cooperation agreements with Chinese state investors such as China Energy on green energy projects (July 2025). Separately, Uzbekistan joined the International REC (I-REC) Standard system in 2025, giving exporters a mechanism to document renewable electricity use for compliance purposes such as the EU's Carbon Border Adjustment Mechanism - a development likely to grow in relevance as Uzbek industry seeks to preserve access to European export markets.

VII. CONCLUSIONS AND OUTLOOK

Uzbekistan has undergone a fundamental transformation of its electricity sector over the past several years, moving from a predominantly state-controlled, gas-dependent generation model towards a diversified energy system increasingly based on private investment, renewable energy and international project finance standards.

The Government has successfully established one of the most active renewable energy markets in Central Asia through a combination of competitive procurement, long-term power purchase agreements, investment guarantees and cooperation with international financial institutions. This approach has enabled Uzbekistan to attract major international developers and lenders and to implement some of the largest solar and wind projects in the region.

The principal legal and commercial questions for the next phase of development are less about attracting generation capital, which has been demonstrated at scale, and more about the framework's capacity to keep pace on the grid side: how connection queues and capacity allocation are administered as between auction-awarded and privately contracted (DPPA-style) projects, how curtailment risk is allocated in PPAs and financing documents, how the newly split PPA/TCA contractual structure beds in following the 2024 unbundling of NEGU and UES, and how storage and market-design reforms evolve to absorb an increasingly renewables-heavy generation mix. 

From an investment perspective, Uzbekistan has created a relatively sophisticated and increasingly bankable renewable energy framework. The combination of competitive tenders, government-backed offtake arrangements, investment protection guarantees, access to international arbitration and active participation of multilateral development banks has significantly reduced many of the risks traditionally associated with emerging market infrastructure projects.

 

ABOUT THE AUTHORS

GRATA International, Uzbekistan

Anora Turakhujaeva, Counsel