Uzbekistan’s energy market to be liberalized

According to the decree, by 2022, the legal framework for the introduction of market mechanisms in the energy sector will be created.

The program envisages the introduction of social consumption norms to attract more private investment in the energy sector and to protect the low-income families.

A draft presidential decree on this issue will be developed by April.

The draft resolution is aimed at developing a healthy competitive environment in the energy sector, providing equal opportunities for all participants and introducing transparent mechanisms for price formation.

The monopoly on electricity supply will be abolished and market mechanisms will be introduced in the sector with the establishment of guarantees of social protection.

Reportedly:

The “single buyer” function of JSC “National Electric Networks of Uzbekistan” will be abolished;
The main requirements for the involvement of private operators in JSC “Regional Electric Networks” will be established;
Uzbekhydroenergo JSC will attract private investors to small and medium investment projects.

According to the above:

•  an independent body regulating the competitive market of electricity and natural gas – a regulator,
•  sole proprietorship company,
•  a national dispatch center will be established.

According to the state program, proposals will be submitted to the government to introduce social consumption norms on energy resources to protect the low-income population by April 2022 (based on international experience).

In addition, a new version of the draft law “On Electricity” (until September 2022) and the draft law “On Natural Gas” (until October 2022) will be developed; A draft government resolution approving the GrId Code (until June 2022) is being prepared.

Oil and gas industry

The presidential decree provides for the introduction of market mechanisms in the oil and gas sector with the establishment of guarantees of social protection in the supply of natural gas by accelerating the transformation process.

According to the state program for 2022, a draft presidential decree on the reform of the natural gas supply system and the gradual formation of a competitive market will also be prepared.

The project defines the following:

•  Transformation of Uztransgaz JSC into a company engaged only in gas transportation;
•  Coordination of the organizational and legal structure of Uzbekneftegaz JSC to the standards of the world’s leading oil and gas companies, including the introduction of cooperation and outsourcing services in public enterprises. 

By October, the main requirements for the involvement of private operators in the activities of JSC Khududgaztaminot will be set. These requirements will apply, in particular, to liquefied gas supply systems to the population and natural gas supply to consumers.