ASTANA – Coal is projected to remain Kazakhstan’s dominant energy source through 2035, accounting for more than 40% of the country’s energy mix despite ongoing decarbonization efforts, according to a September study by PricewaterhouseCoopers (PwC).

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The report, Energy Transition in Eurasia: Who Sets the Pace – Kazakhstan or Uzbekistan, said renewable energy is expected to reach 15% of Kazakhstan’s mix by 2030, in line with government targets. But coal’s continued dominance may limit progress.

The study reviews global energy transition trends, compares Kazakhstan and Uzbekistan’s progress, highlights case studies, and examines opportunities for green finance. Two countries are committed to decarbonization but face different paths and speeds of development.

Both Central Asian countries have adopted national strategies for a green economy and ratified international climate agreements. Kazakhstan has set a 15% renewable energy goal by 2030, while Uzbekistan has committed to 40%. Still, fossil fuels remain central. Coal is forecast to provide about 40% of Kazakhstan’s energy, while natural gas will make up around 60% in Uzbekistan. Renewables are expected to reach 32% in Uzbekistan. By 2030, Kazakhstan could face power shortages, while Uzbekistan’s energy demand is set to double.

Investment plays a central role. Kazakhstan has invested over $2.6 billion in renewable energy from 2014 to 2024. Uzbekistan’s investments reached nearly $6 billion. Around 70% of Kazakhstan’s renewable energy sector funding comes from international financial institutions, with foreign direct investment (FDI) accounting for 31% of all FDI between 2015 and 2022. Competitive auctions introduced in 2018 drew more than 230 companies from 13 countries.

Major investors include the European Bank for Reconstruction and Development, the Asian Development Bank, the World Bank, and the International Finance Corporation. Their support ranges from renewable energy facilities and grid modernization to nuclear power development and electric vehicle infrastructure.

Kazakhstan has emerged as a regional leader in green finance. It was the first Central Asian nation to implement green finance standards, launching more than 20 sustainable bonds and loans. As of May 2024, the market surpassed $1.3 billion. In 2023, the country issued Central Asia’s first sustainability-linked bonds, including a project by the Eurasian Development Bank to finance the conversion of Almaty’s coal-fired CHPP-3 into a gas-powered plant. The government has also offered loan subsidies and bond guarantees for small and medium-sized businesses. A National Green Taxonomy adopted in 2021 defines eligible projects, while a draft social taxonomy is under review.

PwC noted that Kazakhstan and Uzbekistan still face barriers to transition, including aging infrastructure, grid limitations, incomplete regulations, financial risks, and state-regulated tariffs that discourage private investment. Both also face a shortage of skilled workers capable of managing new technologies, creating reliance on foreign specialists.

“The global trends highlight the need for a coordinated approach. The energy transition requires overcoming technological, regulatory, financial, and geopolitical barriers. It is not only about technological change, but a strategic response to climate goals, energy security, and long-term economic resilience,” the report said.

A successful transition will require not only state initiatives but also active participation from energy-intensive industries such as oil and gas, mining, and metallurgy. With effective management, the energy transition could boost regional economies, create jobs, and modernize infrastructure.

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