By Muhammad Luqman
Nine countries from Central and West Asia have signed a declaration that will accelerate cross-border cooperation on energy issues and move the region a step closer to the creation of a regional energy market.
Energy ministers and officials from Central and West Asia, development partners, and ADB delegates signed the agreement at the CAREC Energy Ministers’ Dialogue held in the Uzbek capital, Tashkent, according to a statement issued by Asian Development Bank (ADB) in Pakistan’s capital, Islamabad.
The meeting was attended by ministers from Afghanistan, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and the host Uzbekistan.
The declaration sets the region on a faster reform path toward more liberal energy markets with greater private sector participation and investment, increased power connections and exchanges between countries, and a strong commitment to tap renewable energy sources and clean technologies. The group also endorsed a new CAREC Energy Strategy for the next 10 years that will provide the roadmap to reach the region’s goal of a secure energy future.
The meeting of ministers, according to energy experts, has come at a critical time for the region as its energy sector faces a number of challenges. CAREC countries are rich in natural resources, but uneven distribution of these resources—compounded by inadequate infrastructure and inefficient state-owned energy utilities—means some countries continue to face power shortages. To keep pace with the region’s economic growth and an increasing demand for power, the region will need to double its current power system capacity by 2030. The capacity expansion will require sizable investments, estimated to be about $400 billion in cumulative investments up to 2030.
Regional energy cooperation, modern energy markets, and a significant increase in private investment in the energy sector is an opportunity to overcome these challenges and to create a stable supply of power for domestic use and for export to attractive energy markets in the People’s Republic of China (PRC), Pakistan, and India, along with new strategic transit opportunities for oil and gas through Turkey and Georgia, the ADB statement said.
Unlocking private sector participation and investments is key to meeting the region’s significant energy infrastructure needs. The declaration committed the region to policy reforms in creating a more conducive business environment for attracting private investments across the region.
ADB is the secretariat of the CAREC Program. Since 2001, the CAREC Program has financed 196 regional projects worth $34.5 billion in the areas of transport, energy, and trade in its member countries. Over a third of this amount, or $12.8 billion, has been financed by ADB; $13.8 billion by other development partners such as the World Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development; and $7.9 billion from CAREC governments. The 11 members of CAREC are Afghanistan, Azerbaijan, China, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.
