Gulf investors bet billions on Uzbek energy transformation

For decades Gulf money has poured into luxury property markets, trophy assets and the world’s best-known financial centres.

But increasingly it is heading to a former Silk Road hub, where ageing gas infrastructure, a rapidly growing population and economic reforms offer the opportunity to invest in a new energy system.

Uzbekistan is the largest market for Saudi Arabian utilities group Acwa outside its home country. The kingdom’s renewables champion has invested about $15 billion in projects that include sprawling wind and solar farms and green hydrogen.

Emirati businesses have followed too. UAE clean energy company Masdar has invested more than $2 billion in renewables projects, while Saudi utility group Taqa and sovereign wealth fund Mubadala have taken stakes in one of the country’s largest gas-fired power stations. The financial details of that transaction have not been disclosed.

Qatar has also become more active through its state-owned Nebras Power, which is developing gas-fired and renewable energy projects worth more than $3 billion, while exploring investment in electricity distribution networks.

President Shavkat Mirziyoyev, who took office in 2016, is overhauling Uzbekistan’s creaking gas-based network that dates to the Soviet era.

“Uzbekistan’s population is growing, urbanising and getting richer, while the country’s gas reserves dwindle and transmission infrastructure ages,” said Andrew D’Anieri, associate director of the Eurasia Center at US think tank the Atlantic Council.

“This combination, along with President Mirziyoyev’s drive to modernise the country and reform part of its economy, has created enormous demand for reliable, renewable power.”

Investment in data centres will also require more electricity. Saudi Arabia’s DataVolt, a subsidiary of Vision Invest, secured $150 million from development financing institutions to set up a huge data centre in the Uzbek capital Tashkent.

But the drive to replace the country’s power network is not only domestic.

The country stopped exporting gas in 2020 but hopes to send clean electricity to Europe by 2030 along the Trans-Caspian Green Energy Corridor. Uzbekistan typically enjoys more than 300 days of sunshine a year, according to The Times.

The opportunity for Middle Eastern investors will not only be in wind and solar farms, according to Rauf Mammadov, senior strategy manager at advisory firm Fuld & Company, but across the whole energy network, including the grid and emerging technologies such as battery storage.

“Gulf sovereign wealth funds and state-backed energy companies possess both the capital and the long-term investment horizons required for the projects, making them natural partners for Uzbekistan’s energy transformation,” Mammadov said.

Rebuilding the grid could become one of the biggest opportunities for Gulf investors, said Luca Anceschi, professor of Eurasian studies at the University of Glasgow. Central Asia’s electricity network remains “fractured” after the Soviet era, he added.

The country’s rapid economic growth also makes it an attractive place to invest.

GDP rose 7.7 percent in 2025 to $147 billion and the Ministry of Economy and Finance’s latest fiscal strategy expects growth of 8.1 percent for 2026.

In June, Fitch Ratings revised Uzbekistan’s outlook to positive from stable, while Moody’s upgraded the country’s sovereign credit rating by one notch to Ba2 – two notches below investment grade – from Ba3, citing structural reforms and an improving economy.

The country in May conducted its first international public offering, The Times of Central Asia reported, when it sold shares in National Investment Fund of Uzbekistan, a portfolio of state-controlled companies, on the London and Tashkent stock exchanges.

Risks include Russia

While the macroeconomic numbers look positive, experts warn that there are still risks to investing.

“Rent-seeking and corruption are still major concerns in the energy sector, particularly in gas generation and transmission,” said D’Anieri.

The government is also looking further afield in new sectors where it can court Gulf money such as airports and transport, said Charles Whitney, head of energy for Europe, the Middle East and Africa at law firm Norton Rose Fulbright.