This week, the media across Central Asia reported on numerous critical diplomatic, trade, and investment stories, such as the China-Central Asia Summit in Astana, the China-Central Asia Industrial and Investment Cooperation Forum, and the China-Central Asia Business Council meeting. They also covered several important energy stories, such as the Taliban cancelling an oil exploration deal with a Chinese company, Russia writing off $300 million of Tajikistan’s electricity debt, Uzbekistan commissioning a new wind power plant and a small HPP, and the Uzbekistani-French joint venture Nurlikum Mining, led by the French company Orano, announcing it will begin mining uranium ore in 2025. Several outlets also noted that Kazakhstan started constructing its new center-west highway and postponed plans to build a new gas processing plant at the Karachaganak oil field as talks broke down with international investors.

China-Central Asia Summit:

Chinese President Xi Jinping arrived in Astana on June 16 to attend the second China-Central Asia summit (The Astana Times). Upon his arrival, he met with his Kazakhstani counterpart, Kassym-Jomart Tokayev. The two leaders discussed political, economic, trade, investment, energy, educational, and cultural cooperation. China remains Kazakhstan’s largest trade partner, with bilateral trade surging to $44 billion in 2024. They explored the opening of branches of Chinese universities and cultural centers. President Tokayev reaffirmed Kazakhstan’s support for China’s Confucius Centers. They also discussed collaboration in the nuclear energy sphere, with President Tokayev reiterating that Kazakhstan intends to construct two or three nuclear power plants (NPP). Last week, Kazakhstan announced that Rosatom would build the country’s first NPP while China’s CNNC would lead the construction of the second. Following their deliberations, the delegations of both countries signed 24 agreements pertaining to energy, aerospace, digitalization, the protection of investments, customs regulation, agriculture, e-commerce, tourism, intellectual property, medicine, media, science and interregional relations (Kazinform). President Tokayev also revealed that Kazakhstan and China are working on an agreement regarding nuclear energy cooperation, which they will likely sign in the near future (Kazinform).

The second China-Central Asia summit began on June 17 (Kazinform). During the plenary session, the leaders explored new ways to deepen cooperation, including adopting a biennial theme initiative and expanding the number of twinned cities (The Astana Times). President Xi announced that China would provide $208 million in grants to support various welfare and developmental projects across Central Asia this year. Additionally, they discussed a range of other issues, such as security, transport, energy, finance, e-commerce, education, and agriculture. More specifically, President Mirziyoyev noted the establishment of joint research centers to combat desertification and the Central Asia-China Uninterrupted Trade Platform. Concluding their discussion, the leaders signed the Treaty on Eternal Good-Neighborliness, Friendship, and Cooperation.

President Xi also held bilateral meetings with the regional heads of state. After meeting his Tajikistani counterpart, Emomali Rahmon, the two countries signed numerous agreements: a Program of Trade and Economic Cooperation through 2030, an agreement on intellectual property, a memorandum between their respective ministries of foreign affairs on the creation of a strategic dialogue mechanism, a memorandum of understanding between Tajikistan’s Agency of Innovation and Technology and China’s National Development and Reform Commission of on strengthening cooperation in artificial intelligence, an agreement twinning Tajikistan’s Sughd region with China’s Shaanxi Province, and a memorandum of cooperation between the Narodnaya Gazeta and China Media Group (Kazinform). President Xi also met with Uzbekistani President Shavkat Mirziyoyev (Kazinform). The two Presidents considered their countries’ cooperation in areas such as trade, investment, infrastructure development, and energy, among others. They also signed a Protocol on the conclusion of bilateral negotiations on Uzbekistan’s accession to the World Trade Organization.

The China-Central Asia Industrial and Investment Cooperation Forum witnessed the signing of 58 investment agreements worth $25 billion. International Green Technologies and Investment Projects Center (IGTIPC) and the Shanghai Science and Technology Exchange Center (SSTEC) signed an agreement that will give Kazakhstan access to the Green Technology Bank (The Astana Times). The Bank is one of the region’s largest green technology platforms and will provide Kazakhstani enterprises access to Chinese developments in renewable energy, water management, and agriculture. SSTEC will also provide technological support to 20 green energy projects in Kazakhstan. Kazakhstani Prime Minister Olzhas Bektenov met with the chairman of Shandong Energy Group, Li Wei, to explore the company’s plans to build a coal gasification project, which will produce two billion cubic meters of gas annually, with QazaqGaz. Samruk Energy and China International Water and Electric Corporation (CIWEC) concluded a deal to construct a pump storage power station in the Almaty region. In addition, Kazakhstan signed an agreement with Seraphim to produce hydrogen. Both countries also agreed to develop agricultural processing plants in Kazakhstan, including a corn plant in the Zhambyl region, a cotton cluster in the Turkistan region, and a wheat plant in the Akmola region (Kazinform). TBEA agreed to construct a 1000 MW solar power plant and a 1350 MW coal power plant in the Almaty region. Kazakhstan and China also agreed to develop a transboundary uranium deposit (Kazinform). The Satbayev Institute of Geological Sciences, the China University of Geosciences, CNNC, and Xiamen Wanli Stone signed an agreement to study transboundary uranium ore deposits. Kazakhstani companies also concluded deals with several other Chinese companies, such as China Construction Engineering Corporation, Energy China Group, CITIC Construction, China CAMC Engineering, Huawei, Aladdin Holdings Group, and YTO Express.

During the China-Central Asia Business Council meeting, the parties signed 35 memorandums valued at $17 billion (The Astana Times). The agreements concern green energy, infrastructure, logistics, and trade. Over 300 representatives of significant Chinese enterprises attended the meeting. Kazakhstan’s Economy Minister, Serik Zhumangarin, noted that trade between China and Central Asia reached $95 billion last year. He mentioned the agricultural and logistical cooperation, with 80% of the cargo transported between China and Europe passing through Central Asia. He also considered the development of the Silk Road E-Commerce pilot zone.

The first Power Central Asia + China Forum occurred on the summit’s sidelines (The Astana Times). Government officials, energy leaders, and investors attended the Forum to pave the way for the future of regional energy cooperation. During the Forum, they concluded several critical investment deals. For instance, Kazakhstan signed multiple agreements with PowerChina concerning technology localization, establishing a research and development center, and launching a decarbonization fund. They also signed a memorandum with China Southern Power Grid on high-voltage direct current transmission, digital energy solutions, and pumped-hydro energy storage projects. In addition, they also finalized a deal with China Energy Overseas Investment to supply energy from the Sauran solar power plant in the Turkistan region and construct an integrated energy storage system. QazaqGaz signed a financing agreement with the China Construction Bank to fund projects to improve Kazakhstan’s gas infrastructure. They also reached an agreement with China National Chemical Engineering Construction Corporation International to conduct a feasibility study into a coal-to-chemical plant that will process two billion cubic meters of gas annually. Kazakhstan concluded an agreement with SINOPEC on petrochemical processing and agreed with China Energy International and Shanghai Jiao Tong University to collaborate on hydrogen research. Addressing the Forum, the chairman of Kazakhstan Electricity Grid Operating Company (KEGOC), Nabi Aitzhanov, confirmed that renewable energy will account for 40% of Kazakhstan’s electricity generation by 2035 and outlined Kazakhstan’s plans to add 32 GW of capacity by 2035 (Kazinform). This additional capacity will include 2 GW from renewable energy sources, 2.4 GW from nuclear, and 17 GW from fossil fuels. He added that the government plans to initiate critical structural changes to the electricity grid, enabling it to efficiently manage and distribute additional capacity. He also underlined the need for flexibility in the system and highlighted the addition of 3 GW of storage to the grid. Other speakers emphasized the need for investment to meet the region’s green transition targets while ensuring energy security. 

Transport:

Last week, Kazakhstan broke ground on the critical center-west highway (The Times of Central Asia). The ceremony took place in Kostanay on June 14. The new road will be 865 kilometers long, connecting Astana, Zhanteke, Egindikol, Arkalyk, Torgai, and Irgiz. The project will reduce the distance between Astana and Irgiz by 573 kilometers, improving transit times. Linking west and central Kazakhstan, the new highway will form a critical part of the Trans-Caspian International Transport Route (TITR).

Investment:

According to the United Nations Conference on Trade and Development, Uzbekistan led Central Asia in foreign direct investment (FDI) in 2024, attracting $2.8 billion (Kursiv). At the same time, Kazakhstan recorded a negative net FDI flow of -$2.55 billion. Turkmenistan ranked second with $1.6 billion. Meanwhile, Kyrgyzstan attracted $705 million and Tajikistan $291 million. Global FDI decreased for the second consecutive year by 11% to $1.5 trillion. In Uzbekistan, foreign investors, spurred by telecommunication reforms and growing demand for digital services, pumped $900 million into the IT sector and $1 billion into transport infrastructure. However, this data differs from the UN Economic and Social Commission for Asia and the Pacific’s data, which states Uzbekistan attracted $4 billion in FDI in 2024.

Trade:

A Uzbekistani Ministry of Investments, Industry and Trade delegation attended the second Turkic States Trade Forum in Baku (UZ Daily). Business representatives from over 20 countries, including 50 Uzbekistani enterprises, were in attendance. The Forum exhibited various Uzbekistani products, such as electronics, textiles, pharmaceuticals, construction materials, and furniture. Ministry officials met with significant Azerbaijani importers like Greyenstream International, Uni Tiles MMC, International Logistic Group, Nabucco A&C, MR Group, Hayat, and Sahil Inshaat 2020. Uni Tiles MMC signed a deal with Uzsanoatqurilishmateriallari Association to supply $1 million of construction material in 2025. In addition, MMS Universal Trade XI and Artatex finalised a deal for knitwear products and fabrics from Orzu-Teks, and New Best Style and Sahil Inshaat 2020 concluded a separate deal for the supply of $500000 worth of PVC decorative panels. Overall, the value of the agreed contracts stood at $68 million. Total exports to Azerbaijan are estimated to reach $350 million. Both countries also agreed to open a permanent Uzbekistani exhibit at the Turkic States Trade Centre in Baku.

Economic Outlook:

The International Monetary Fund (IMF) recently concluded its annual consultation in Uzbekistan (Kun). They highlighted that the country’s economic outlook remains stable, with GDP growth of 6.5% in 2024 and 6.8% in the first quarter of 2025. They expect GDP growth to stabilize around 6% in 2025 and 2026. Meanwhile, they forecast the government deficit to decline to 2.6% of GDP in 2025 due to increased remittances, exports, and commodity prices. The deficit fell by 1.7% to 3.2% in 2024. The country’s foreign currency reserves are also stable. Additionally, they anticipate inflation will drop to around 5% by the end of 2027, in line with the Central Bank’s target. However, the IMF noted several possible risks to the country’s economic stability: volatility in commodity prices, trade shocks, tighter international financing conditions, and rising liabilities from state-owned enterprises and public-private partnerships. They encouraged the Uzbekistani government to continue its structural reforms: liberalizing prices, increasing the tax base, reducing the deficit, and privatizing state enterprises.

Mining:

The Uzbekistani-French Nurlikum Mining plans to commence extracting uranium by the end of 2025 (Kun). Nurlikum Mining is a joint project between France’s Orano and Uzbekistan’s Navoiyuran. Speaking at the Tashkent International Investment Forum, Nurlikum’s General Director Benoit Lemonne noted the company has received two exploration licenses and expects to begin mining operations at the South Djengeldi in 2025. He also confirmed they had conducted 200000 meters of exploratory drilling in the last five years to verify the feasibility of the deposits. He also added that Japan’s ITOCHU Corporation was in the final stages of acquiring a stake in the consortium. Extraction operations at the South Djengeldi will last 10 years, producing roughly 700 metric tons of uranium annually. The first phase will see an investment of $214 million over three years and the production of 500 metric tons per year. The project is part of a broader strategic partnership agreed upon by Orano and Navoiyuran in 2022 and updated during President Mirziyoyev’s recent visit to France. Uzbekistan remains one of the world’s largest exporters of uranium, with exports amounting to $450 million in 2023.

Renewable Energy:

Last week, Uzbekistan commissioned a new 500 MW wind power plant in the Bukhara region (UZ Daily). The Saudi company ACWA constructed the $650 million plant. Initial estimates indicate the plant will generate 1.8 billion kilowatt hours of electricity once fully operational and reduce natural gas consumption by 500 million cubic meters annually. The plant will aid the region’s industrial development and help Uzbekistan reach its target of generating 27 GW, or 40% of electricity production, from renewable sources by 2030. In addition, President Mirziyoyev launched a new small HPP near the Gissarak Reservoir in the Shakhrisabz district (UZ Daily). The Gissarak reservoir currently has a capacity of 45 MW and generates 80 million kilowatt hours of electricity annually. The new $1.5 million small HPP has a capacity of 3.5 MW and will generate 17.5 million kilowatt hours per year. In the next two years, Uzbekistan plans to construct 416 small HPPs with a capacity of 12 MW.

Russia has agreed to cancel Tajikistan’s $300 million debt for electricity supplied by the jointly operated Sangtuda-1 Hydropower Plant (HPP) (Daryo). Russia’s Minister of Energy, Sergei Tsivilev, and Tajikistan’s Minister of Energy, Daler Juma, concluded the deal in late April. The debt will be incrementally written off by 2034. The Sangtuda-1 facility has a capacity of 670 MW and generates roughly 12% of Tajikistan’s electricity. Under the new agreement, the investment payback period has been extended from 20 to 35 years, meaning returns on the project have been pushed back to 2048. The agreement also revised electricity tariffs, although they did not publish the details of the revision. In recent years, Russia has written off or restructured the debts of various countries around the globe. Most of the debts relate to Soviet-era infrastructure projects.

Nuclear Energy:

The Senior Vice President of Électricité de France (EDF), Vakisasai Ramany, recently met with officials from Kazakhstan’s Agency for Atomic Energy to explore EDF’s participation in the consortium that will construct Kazakhstan’s first NPP (Kursiv). Their talks centered on technical and scientific cooperation, specifically low and medium-power reactors. These discussions follow Kazakhstan’s announcement last week that Russia’s Rosatom will lead the construction of Kazakhstan’s first NPP while China’s CNNC will oversee a second NPP.

Oil and Gas:

The Taliban Ministry of Mines and Petroleum cancelled a 25-year oil extraction contract in the Amu Darya basin with the Chinese company Afchin (Khaama Press). The Ministry stated that following an investigation, they determined that Afchin had failed to meet its obligations and commitments under the contract. Afchin had agreed to invest $350 million in the first year and $540 million in the succeeding three years. The Amu Darya basin, located in the Sar-e-Pul and Faryab provinces, is believed to contain 87 million tons of crude oil.

The Tengiz oil field is once more operating at full capacity after the completion of the field’s Future Growth Project, according to the Deputy Chairman of the Management Board of Tengizchevroil Asset Magauov (Kazinform). The field produced 10.5 million tons of crude oil in the first five months of 2025, roughly 5% or 535000 tons more than planned. They also extracted 4.76 million tons of natural gas in the same period, 9% or 385 million cubic meters more than forecasted. Magauov also confirmed that Kazakhstan will increase oil shipments to Germany by up to two million tons (Kazinform). Kazakhstan exported 83.5 million tons of oil in 2024, 8% more than planned and an increase of 4% compared to 2023. Oil exports to Germany rose by 50% along the Atyrau-Samara route in 2024, with plans to double exports to Germany in 2025. In the first five months of the year, Kazakhstan exported 34.7 million tons or 2% more than planned. Meanwhile, oil deliveries along the Aktau-Baku-Ceyhan route grew by 27% to 1.4 million tons. In 2025, Kazakhstan plans to increase deliveries to 1.7 million tons. The operator of Kazakhstan’s Rozhkovskoye gas field, Ural Oil and Gas, also revealed this week that it intends to increase its output to 700 million tons by building three new wells by 2026 (Kazinform). In the first five months of 2025, the company extracted 191 million cubic meters of gas from the field. Overall, it expects to produce 527 million cubic meters throughout the year.      

Kazakhstan’s Energy Ministry has cancelled its plans for a new gas processing plant at the Karachaganak field (Kursiv). Talks between the government and the international firms that operate the field, such as Shell and Eni, on financing the plant broke down recently. The government rejected their demands for $1 billion in addition to the repayment of all construction costs. They also raised the proposed construction costs to $6 billion. The plant was planned to have a capacity of four million cubic meters annually. The international investors argued that the plant would not be profitable for three to four years, with the existing production-sharing agreement expected to expire in 2033. Officials from the Energy Ministry believe the field's operators are leveraging the negotiation in an arbitration dispute over the distribution of revenue generated from the Karachaganak field. However, the Kazakhstani government remains open to building the plant potentially after a new production-sharing agreement is concluded or with new partners, such as KazMunayGaz.       

The First Deputy Chairman of the Management Board of KazMunayGaz, Kurmangazy Iskaziyev, met with the President of Sinopec-Kazakhstan, Zhao Quanmingen, to discuss future cooperation between their companies (Kazinform). The meeting concluded with the signing of an agreement concerning the Berezovskiy project in the West Kazakhstan region. Under the agreement, SINOPEC will fund the exploration stage, including a 300-kilometre seismic survey and a 7000-metre deep exploratory well. The Berezovskiy site is in the northern Caspian basin and is believed to contain substantial oil and gas deposits.

Water Infrastructure:

According to a new report, “Drinking Water Supply and Sanitation in Central Asia” by the Eurasian Development Bank, Central Asia will need $29.2 billion in investment between 2025 and 2030 to modernize its water infrastructure (Asia Plus). Currently, the countries in the region have only obtained $12.068 billion or 41.3% of the necessary financing, leaving a significant gap of $17 billion. The funds are required to upgrade irrigation infrastructure and prevent various challenges related to climate change, such as water scarcity, future glacial melt, and natural disasters.