This week, the media in the region covered several notable diplomatic events, such as the state visit of the General Secretary of the Vietnamese Communist Party, Tô Lâm, to Kazakhstan and Gurbanguly Berdimuhamedov’s visit to Paris. Several outlets reported on critical energy developments, such as Uzbekistan approving the site plan for its new small modular nuclear power plant, Kazakhstan considering a new tax on energy companies, and Kazakhstan reiterating its commitment to OPEC+ in light of media allegations that it is facing pressure from its partners to reduce oil production. Nevertheless, the Energy Ministry once again refused to countenance lowering production. Multiple sources also noted Kyrgyzstan launching its new National Council for the Development of Virtual Assets and Blockchain Technologies and Uzbekistan signing a new $3.6 billion program with the ADB.

Diplomatic Events:  

On May 5, the National Leader of the Turkmen People, Chairman of the Halk Maslahaty, Gurbanguly Berdimuhamedov, visited France to attend the Franco-Turkmenistani Economic Forum (The Times of Central Asia). While in Paris, he also met with French President Emmanuel Macron. Both countries signed multiple agreements concerning energy, water management, agriculture, education, archaeology, and urban development (Caspian News). For instance, at the Franco-Turkmenistani Economic Forum, the Türkmenaragatnaşyk agency signed a deal with Airbus Defense and Space SAS and Turkmenistan’s Ministry of Agriculture and IGN FI agreed to cooperate in land cadaster and crop monitoring. Turkmenistan’s State Water Management Committee, Türkmengaz, and SUEZ International also signed agreements on water management and the gas industry. Meanwhile, after talks with President Macron, both leaders signed a declaration on cooperation in urban development, a roadmap for cooperation in education for 2025-2026, and an agreement between the Ministry of Culture of Turkmenistan and the National Museum of Natural History of France on archaeological cooperation (Turkmen Portal). Thales Alenia Space Group also concluded a deal to provide Turkmenistan with its second communications satellite. In addition, Türkmengaz and Kayrros SAS signed an MoU. Overall, Turkmenistan remains interested in diversifying its economy and moving away from a reliance on energy exports to China. This effort corresponds with the EU’s interest in searching for new energy sources as it ends its energy relationship with Russia.

The General Secretary of the Central Committee of the Communist Party of Vietnam, Tô Lâm, paid a state visit to Kazakhstan from May 5-7 (The Astana Times). During his visit, he held talks with Kazakhstani President Kassym-Jomart Tokayev. The two leaders discussed new ways of promoting trade and investment between their countries, with both indicating their support for establishing a Joint Economic Council. They explored the development of the Trans-Caspian International Transport Route and how to improve logistics between Central and Southeast Asia. Both leaders noted that bilateral trade reached $860 million in 2024 and highlighted that they aim to increase annual trade turnover to $2 billion in the near future (The Astana Times). Following their deliberations, they signed a joint statement establishing a strategic partnership, making Kazakhstan Vietnam’s first strategic partner in Central Asia. The two countries agreed to increase political cooperation, establishing new cooperation mechanisms between their governments (Kazinform). In addition, they decided to expand economic collaboration, supporting the creation of a Joint Business Council, signing a future Agreement on Investment Encouragement and Protection, and an action plan for trade and economic cooperation. They praised the work of the intergovernmental commission and their Chambers of Commerce in bolstering economic relations. Both sides agreed to boost cooperation in agriculture, digitalization, transportation, energy, mining, tourism, education, and the environment. The two countries concluded several agreements and memoranda concerning sports, judicial, cultural, and technological cooperation from 2025 to 2027 (Kazinform). They also signed a deal to sell QazaqAir to Vietnam’s Sovico Group. Under the terms of the deal, QazaqAir will be renamed VietJet Qazaqstan. KazMunayGaz and Petrovietnam Exploration Production signed a cooperation agreement about geological exploration. On the sidelines of the visit, a Kazakhstan-Vietnam business roundtable was held (Daryo). Government and business representatives discussed several critical areas for developing bilateral economic relations and the practical requirements for launching joint investment projects, such as access to infrastructure and tax and customs arrangements. Deputy Prime Minister Yermek Kosherbayev emphasized the potential for cooperation in the agricultural field and noted that Kazakhstan aimed to increase the share of processed products in the country’s agricultural trade to 70% and construct 29 poultry meat plants and 11 egg plants. He invited Vietnamese companies to develop new production facilities and introduce new water-efficient technologies.

The 17th meeting of the Joint Intergovernmental Commission for Trade and Economic Cooperation between Iran and Tajikistan took place in Shiraz from May 5-6 (Asia Plus). Tajikistan’s Minister of Energy and Water Resources, Daler Juma, and his Iranian counterpart, Abbas Aliabadi, chaired the meeting. Officials from the two countries discussed the development of bilateral trade and investment. They also met with business leaders, with 25 Tajikistani and 30 Iranian entrepreneurs attending. The two ministers highlighted that annual trade turnover surged 48.4% to $377.7 million last year. In the first quarter of 2025, trade has grown by 42.9% to $110.6 million. They explored plans to expand trade to $500 million annually, increase the number of direct flights, and remove visa requirements. The delegations of both countries signed multiple MoU regarding investment, the establishment of free trade zones, standardization, agriculture, science, and culture. They also established working groups to coordinate the implementation of the agreements. They also discussed the proposed Tajikistan-Iran Trade Centre and Dushanbe’s Digital Technology and Innovation Centre.

The 13^th meeting of the Kazakhstani-Pakistani Intergovernmental Commission took place from April 28-29 in Karachi, Pakistan (Chamber of International Commerce of Kazakhstan). Kazakhstan’s Minister of Transport, Marat Karabayev, and Pakistan’s Minister of Trade, Jam Kamal Khan, chaired the meeting. After their deliberations, both countries signed ten agreements concerning trade, education, and standardization (Transport Corridors). The Kazakhstani delegation also held talks with the Pakistani ministers of communications, railways, maritime affairs, and aviation to discuss expanding trade and transport connections, simplifying customs procedures, and launching direct flights between the two countries. They met with the management of the Pakistani National Logistics Company to explore establishing the Kazakhstan-Pakistan transport and logistics consortium. They also discussed increasing multimodal routes and signed a protocol deepening their cooperation. The Kazakhstani-Pakistani business forum took place in conjunction with the intergovernmental meeting (Liter.kz). During the forum, the Kazakhstani company Optima Development signed a $10 million deal with Pakistan’s Friesland Campina Engro to supply various dairy products to Kazakhstan. Both countries also signed a transit agreement at the forum, giving Kazakhstan access to the Pakistani ports of Karachi and Gwadar. According to recent statistics, trade between the two countries, mainly consisting of agricultural products, rose by 2.1% in 2024 to $53.6 million.

Finance:

Last week, Kyrgyzstani President Sadyr Japarov chaired the inaugural meeting of Kyrgyzstan’s National Council for the Development of Virtual Assets and Blockchain Technologies (Daryo). During the meeting, President Japarov noted the increasing importance of blockchain technologies and that the new Council would ensure the development of a coherent state policy on their use. The Council will also promote financial literacy and educate the public on cryptocurrency. In 2022, Kyrgyzstan adopted a law on virtual assets, which provides for their issuance and circulation. Prime Minister Adylbek Kasymaliev expressed his belief that implementing blockchain technology would improve the efficiency and transparency of government administration. Meanwhile, National Security Chief Kamchybek Tashiev added that cybersecurity was increasingly becoming a top priority. The Director of the National Development Agency, Farkhat Iminov, outlined plans for a digital Som, a crypto reserve, and the creation of a stablecoin. Kyrgyzstan recently partnered with Binance to implement blockchain technology in the government sector, with Binance’s founder, Changpeng Zhao, and its regional head for Central and Eastern Europe, Central Asia, and Africa, Kirill Khomyakov, invited to participate in the Council. The meeting concluded with the signing of an MoU between the National Investment Agency and Binance.

Investment:   

At a recent government meeting, Kazakhstani Minister of Industry and Construction Ersayin Nagaspayev highlighted recent advances in the country’s chemical industry (Daryo). The minister said production volumes rose 7.7% in 2024 to $1.9 million. The sector also achieved an average growth rate of 5% over the last five years. Exports of chemical products also increased by 13% to $2 billion last year. He underlined that the chemical industry is critical to developing other sectors such as agriculture, metallurgy, and construction. In the first quarter of 2025, production volumes grew by 12.5% to $789.2 million, with the government anticipating growth of 5% over the year as several new projects will expand the production of polypropylene, sodium cyanide, fertilizers, and yellow phosphorus. The government also intends to expand the agrochemical industry significantly. For instance, the government aims to boost domestic fertilizer production to fully supply the domestic market by 2030. Overall, they will increase production of fertilizers, such as urea, potassium chloride, and dicalcium phosphate, to 4 million tons by 2030. Kazakhstan is also cooperating with CHN Energy and East China Engineering and Technology to develop its coal chemical industry and end its reliance on the export of raw materials by moving to value-added production. The government aims to attract $9.3 billion in investment for the chemical industry by 2035. During the meeting, Energy Minister Yerlan Akkenzhenov presented a roadmap for 2024-2030 to strengthen the petrochemical industry (The Astana Times). The roadmap outlines six substantial projects valued at $15 billion. Petrochemical production surged by 50% to 540000 tons in 2024, as a new paraxylene production unit in Atyrau produced 33,800 tons. At the National Industrial Petrochemical Technopark, 18 projects are underway to expand the production of polypropylene, polyethylene, and synthetic rubber. Between 2027 and 2029, several new plants, producing polyethylene, PET, alkylate, and urea, will be launched. The government will also introduce a new law to ensure access to raw materials and outline tax and financial support measures. Kazakhstan has 12 major chemical and petrochemical plants, including the largest polypropylene plant in Central Asia. The Deputy Chief Executive Officer of KazMunayGas, Asset Magauov, reported that the KPI polypropylene plant in Atyrau increased its output by 73% in the first quarter over the same period in 2024 to 126000 tons. They expect to manufacture 486000 tons this year. Since the plant began operations in 2022, polypropylene exports have risen nine times. The company is also constructing a $11 billion polyethylene plant, a $1.2 billion urea plant, and a polyethylene terephthalate plant.

According to Uzbekistan’s Ministry of Investment, Industry and Trade, Uzbekistan and the Asian Development Bank (ADB) have agreed to several new investment projects (Kun). An Uzbekistani delegation led by Deputy Prime Minister Jamshid Khodjaev attended the recent 58th Annual Meeting of the ADB Board of Governors in Milan. During the annual meeting, Uzbekistan was confirmed as the new chair of the ADB Board of Governors for 2025–2026, with the next annual meeting taking place in Samarkand in May 2026. The Uzbekistani delegation also concluded a program to enact 23 projects worth $3.6 billion in education, water management, green energy, and transport. Over the past five years, the ADB has provided Uzbekistan with $5.41 billion in financing.

Renewable Energy:  

According to a Presidential Decree, Chinese companies China Electrical Equipment International and China Huadian Overseas will construct a 500 MW solar power plant in the Jizzakh region of Uzbekistan (Kun). The project will increase green energy production, guarantee Uzbekistan’s energy security, and reduce its dependency on natural gas. The two Chinese companies have formed Huadian Jizzakh Solar Power LLC to construct the plant and expect to invest around 2.08 billion Chinese Yuan. Once complete, Uzenergosotish will purchase the electricity generated under a 25-year guaranteed price arrangement.

Masdar has begun preparing a feasibility study for a 2 GW wind power plant in the Namangan region of Uzbekistan (Kun). The Head of Business Development and Investment for the CIS at Masdar, Maryam Rashed Al Mazrouei, announced the commencement of work on the feasibility study during an interview with Gazeta.uz on the sidelines of the ADB Board of Governors Meeting in Milan. The Ministry of Investments, Industry, and Trade and the Ministry of Energy initially signed an agreement with the company at the end of 2023 to construct a 2 GW wind power plant and energy storage facilities, costing $2.6 billion. She confirmed that they will implement the project in two phases. They have begun work on the feasibility study for phase one, consisting of a 1 GW plant, which they expect to complete by 2029 at a cost of $500 million. She anticipates the study will take a year to complete. She also outlined that the company would construct several energy storage facilities with a capacity of 1.15 GWh. The company is already building energy storage facilities in the Bukhara region. Masdar also signed an agreement with Uzbekhydroenergo last year to construct a pumped-storage hydropower plant. While they have completed the feasibility study, the project is still in the early stages of development. She highlighted that Masdar won all its projects in Uzbekistan through tenders, except for the Zarafshan wind power plant, which was a bilateral agreement. Masdar sells the electricity its projects generate at fixed prices agreed under a 25-year power purchase agreement. Nevertheless, Maryam Rashed Al Mazrouei refused to comment on whether Masdar would participate in Uzbekistan’s planned wholesale electricity market without long-term government contracts. She said they need to wait and see how the government implements the market, which it expects to launch in 2027-2028.

Nuclear Energy:

Last week, Uzatom confirmed that the site plan for the country’s first nuclear power plant has been approved (UZ Daily). Russia’s Rosatom will construct the plant in the Jizzakh region. According to Uzatom, the project's operational headquarters and the Scientific and Technical Council approved the plan during a joint meeting. During the meeting, representatives of Uzatom and other agencies received a presentation on the project’s progress. They discussed ongoing preparatory work and coordination with international partners. The site has already passed several safety assessments. Uzatom also announced that uranium from Uzbekistan will fuel the plant (The Tashkent Times). In September 2024, Uzatom and Atomstroyexport signed a protocol initiating the project's preparatory phase. They expect the government to issue the official construction permit in early 2026. The first phase of preparatory construction work began in April 2025.

Oil and Gas:

In light of recent media speculation, Kazakhstan’s Energy Ministry released a statement underlining its commitment to the OPEC+ agreement (Kursiv). The ministry emphasized that Kazakhstan would continue to fulfil its obligations. However, they added that Kazakhstan has no plans to reduce its oil production and that they have informed their OPEC+ partners of their intentions. Earlier, Bloomberg reported that OPEC+ had approved a substantial increase in oil production for June to punish overproducing members. Oil prices have already plummeted in response to the news.

According to the Energy Monitor Fund, Kazakhstan is considering a new tax on oil companies (Kursiv). The new payment would amount to 1% of hydrocarbon production costs or investments and could generate $30 million annually, which would go towards research and development. The head of Energy Monitor, Nurlan Zhumagulov, noted that the government introduced this payment several years ago but has yet to enforce it, with oil companies using these funds for other purposes. He explained that some have diverted these funds towards seismic exploration or educational institutions, for example. Nevertheless, he cited several successful R&D projects, such as the Centre for BioEnergy Research, which has worked to improve oil recovery at several fields. Roughly $30 million is spent on R&D, with state entities like KazMunayGas and QazaqGaz contributing the most by allocating funds through Samruk-Kazyna. China National Petroleum Corporation has also contributed to several projects, but has never disclosed the results. According to the current R&D arrangement, companies can claim deductions on research expenditures at a rate of $0.30 per $0.20 spent. Zhumagulov maintains it would be more effective to redirect R&D funds to the social and economic development of oil-producing regions, improving the reputation of extractive enterprises. In 2023, the Ministry of Energy and the Ministry of Science and Higher Education proposed that hydrocarbon producers coordinate with the industry’s Scientific and Technical Advisory Council on R&D spending.