World Bank approves $1 billion program to create Central Asia’s first regional electricity market

In the first phase, the Kyrgyz Republic, Tajikistan, and Uzbekistan, together with the Central Asian Countries’ Coordinating Dispatch Center (CDC) Energia, will receive grants and concessional financing totaling $143.2 million, including $140 million from the World Bank’s International Development Association (IDA) and $3.2 million in grants from the Central Asia Water and Energy Program (CAWEP). These funds, as the World Bank confirmed in a statement, will support initial program activities in each country.

Electricity demand in Central Asia is rising rapidly and is projected to triple by 2050 under a business-as-usual scenario. Population growth, expanding urban centers, and industrial development are intensifying the need for affordable, reliable, and sustainable energy. Despite this demand, electricity trade in the region remains limited, accounting for only about 3% of total electricity consumption, while variable renewable energy contributes just 4% of power generation, despite the region’s abundant and complementary clean energy resources.

The REMIT Program seeks to leverage Central Asia’s diverse energy assets: hydropower in the Kyrgyz Republic and Tajikistan, thermal power in Kazakhstan, Turkmenistan, and Uzbekistan, and growing solar and wind potential across all countries. Over the next decade, the program aims to increase electricity trade to at least 15,000 GWh annually, more than triple transmission capacity to 16 GW, and enable up to 9 GW of clean energy resources. This enhanced regional integration is expected to reduce power outages, lower energy costs, and support a more resilient and balanced electricity system.

“The REMIT Program supports Central Asian countries’ ambition to deepen energy cooperation and create a regional electricity market. This will enable more efficient use of energy resources, including cross-border deployment of clean energy, improve access, reliability, and affordability of electricity for people and businesses, and support jobs,” said Najy Benhassine, World Bank Regional Director for Central Asia. “By 2050, stronger electricity connectivity and trade could generate up to $15 billion in economic benefits for the region.”

The total indicative financing for the REMIT Program is $1.018 billion, which will support market design, grid strengthening, digital systems to improve reliability, and institutional development. Investments are also expected to create construction and high-skilled operational jobs related to the regional electricity market.

“The launch of the Central Asian regional electricity market, underpinned by a strengthened grid, will advance energy security, support large-scale renewable integration, and unlock private investment. The first phase alone is expected to enable about 900 MW of new clean energy capacity, leveraging $700 million in private investments,” said Charles Cormier, World Bank Regional Infrastructure Director for Europe and Central Asia. “This will lay the foundation for a more resilient and interconnected power system across this dynamic region.”

Future phases will expand the market platform, digitalize and reinforce regional transmission networks, and further strengthen regional institutions. CDC Energia will coordinate power exchanges and market operations, while national transmission companies will implement grid investments. A Regional Steering Committee, comprising energy ministries and implementing agencies, will oversee overall program implementation.