This chapter assesses Uzbekistan’s policy framework for sustainable infrastructure planning, delivery and financing. It examines national strategic planning frameworks, including national development strategies and green transition plans, and the ongoing development of a Long-Term Low-Emission Development Strategy (LT-LEDS), alongside sectoral conditions in energy, transport and industry infrastructure. The chapter analyses infrastructure investment needs, financing gaps and the evolving role of public investment, public-private partnerships, state-owned enterprises and green finance instruments. It explores climate commitments under the Nationally Determined Contribution (NDC), fossil fuel dependence, renewable energy expansion and pressures linked to urbanisation, water scarcity and environmental degradation. The chapter also reviews governance reforms, infrastructure appraisal tools and the integration of climate resilience, environmental assessment and gender considerations in infrastructure decision-making.
Accelerating Sustainable Infrastructure Investments
Abstract
Uzbekistan has made notable progress in embedding sustainability into its infrastructure agenda, supported by an ambitious national reform programme and growing international engagement. The Uzbekistan–2030 Strategy, the Green Economy Strategy 2019–2030, and the forthcoming Long-Term Low-Emission Development Strategy (LT-LEDS) have placed sustainability, resilience, and regional connectivity at the centre of the country’s development vision. Public investment in infrastructure has grown steadily, and the government has taken important steps to diversify energy sources, promote renewable power and expand and modernise transport systems. The adoption of the national green taxonomy, the rapid scale-up of public–private partnerships (PPPs), from none before 2018 to more than 400 by 2024, and a flurry of sovereign and corporate green bonds issuances reflect growing market confidence and alignment with international sustainable-finance practices. Institutional reforms, including the creation of the Agency for Strategic Development and Reforms (ASDR) and the merger of the ministries of Economy and Finance, have strengthened planning co-ordination, while the integration of sustainability objectives into flagship strategies signals an increasingly coherent national vision.
Despite these advances, Uzbekistan faces enduring structural challenges that continue to limit the scale and pace of transition toward sustainable infrastructure. The country’s power system remains dominated by natural gas and, to a lesser degree, coal, accounting for more than 85% of generation, while renewables provide less than 15%. Heavy reliance on fossil fuels, combined with extensive subsidies and ageing transmission networks, constrains decarbonisation and creates fiscal pressures. Investment needs of 14-17% of GDP annually to 2060 underscore the magnitude of the challenge, and private capital will be necessary to bridge the gap. However, private participation in infrastructure financing remains modest and heavily reliant on international development partners. Institutional capacity gaps, particularly in subnational governments and financial institutions, hinder the preparation of bankable projects, while environmental assessments and resilience criteria are inconsistently applied. Gender and social inclusion considerations are also insufficiently integrated into infrastructure planning, risking uneven benefits from new investments. Without stronger alignment between fiscal policy, sectoral regulation and climate goals, Uzbekistan risks locking in high-carbon pathways and stranded assets.
Looking ahead, Uzbekistan can build on its strong reform momentum and international partnerships to make its infrastructure transition greener, more resilient and inclusive. Accelerating the finalisation of the LT-LEDS and embedding it across sectors will be critical for long-term policy coherence. Strengthening project appraisal systems, scaling up blended finance and broadening local capacity for implementation will help translate national ambitions into tangible results. Modernising the power grid, integrating climate and gender criteria into investment planning, and mainstreaming resilience into transport and water systems will further enhance the country’s competitiveness and sustainability.
This chapter assesses Uzbekistan’s national policy framework for sustainable infrastructure planning, delivery and financing. It consolidates analytical work undertaken by the OECD and its partners under the SIPA programme, complemented by literature review and desk research. The chapter begins with an overview of the country’s key sustainable infrastructure challenges, followed by an assessment structured around SIPA’s three analytical pillars: (i) the national strategic and planning framework; (ii) sectoral conditions for sustainable infrastructure project development; and (iii) sustainable finance mobilisation. The priority actions below draw on the analysis presented in these sections, outlining key steps to strengthen the resilience, inclusiveness, and sustainability of Uzbekistan’s infrastructure systems.
Advance long-term decarbonisation strategies. Finalise the LT-LEDS and sectoral pathways, ensure coherence with the NDC and Green Economy Strategy, and integrate just transition measures for fossil fuel-dependent regions and industries.
Strengthen governance and assessment frameworks. Align infrastructure development with climate goals through improved inter-ministerial co-ordination, systematic use of Strategic Environmental Assessments (SEAs) and Environmental Impact Assessments (EIAs), as well as integrated cost-benefit tools such as IISD’s Sustainable Asset Valuation (SAVi) that capture social and environmental value.
Promote inclusive and gender-responsive infrastructure. Embed gender and social criteria in project selection, procurement and monitoring, and strengthen mandates of gender councils and the State Committee for Women and Family Affairs to ensure equitable access and participation.
Reform fossil fuel subsidies and modernise the power grid. Gradually phase out subsidies while protecting vulnerable consumers, redirect fiscal savings toward renewables, energy efficiency and grid upgrades, and support the introduction of cost-reflective tariffs.
Enhance sustainable urban and freight transport systems. Strengthen implementation of the Sustainable Urban Mobility Plan (SUMP) for Tashkent and replicate it in secondary cities to reduce congestion, air pollution, and GHG emissions. Modernise the national freight network by improving intermodal connections, upgrading road and rail corridors, and expanding logistics hubs to lower transport costs and improve resilience to climate risks.
Scale up green finance and capital market reforms. Build on the momentum of the country’s recently adopted national green taxonomy and uptick in green bond issuance by enabling sub-sovereign issuers and consolidating capital market legislation and institutions to expand liquidity and investor confidence.
Promote Responsible Business Conduct (RBC) in infrastructure. Implement the National Action Plan on RBC, strengthen awareness of OECD Guidelines among SOEs and private developers, and require disclosure of environmental, social and governance (ESG) practices in PPPs and public procurement.
Uzbekistan’s economic reform, launched in 2017, has elevated infrastructure to a central role in the country’s development strategy. Market-opening reforms, improvements to the business climate, and new strategies for energy, transport and urban development have created a strong foundation for investment. The country has prioritised upgrading energy systems, modernising transport networks and improving urban services, which are seen not only as enablers of economic growth but also as foundations for stronger regional integration, positioning Uzbekistan as a key trade and connectivity hub in Central Asia. Responding to interlinked global and domestic environmental challenges, including climate change, water scarcity and the desertification of the Aral Sea basin, Uzbekistan has begun charting a course towards infrastructure that is more resource efficient, climate resilient and sustainable. This is reflected in the government’s growing emphasis on renewable energy projects and cleaner and more efficient transport solutions, which can allow the country to gradually pivot away from fossil-fuel dependence.
Despite this progress, Uzbekistan faces significant barriers to realising its sustainable infrastructure ambitions. A central challenge is the high energy intensity of the economy and the emissions-intensity of the power sector. This dependence both heightens vulnerability to price and supply shocks and makes decarbonisation more costly, while aging assets and entrenched subsidies further lock in inefficiency. Progress is also constrained by gaps in enabling frameworks: Uzbekistan has yet to fully establish the long-term low-emission strategies and robust sectoral decarbonisation plans needed to channel finance effectively into sustainable infrastructure. In addition, capacity limitations remain acute, with infrastructure-related state bodies and local financial institutions lacking the technical expertise and institutional experience to design, evaluate and deliver bankable green projects.
Like many other emerging and developing economies (EMDEs), Uzbekistan faces a pressing need to expand and upgrade its infrastructure to foster inclusive and sustainable growth. Against this backdrop, the following section explores Uzbekistan’s sustainable infrastructure agenda, focusing on investment requirements, key environmental and economic constraints, and the ways these factors influence national infrastructure priorities.
Since late 2025, Uzbekistan has entered a new phase of reform focused on implementation and delivery. This shift is underpinned by Presidential Decree No. PR-201 of 30 October 2025, which introduced a unified national system of strategic planning and development. The system formalises the full policy cycle from strategy formulation to implementation, monitoring, evaluation and financing.
4.1.1. Meeting Uzbekistan’s infrastructure requirements for economic and sustainability goals requires diversifying sources of financing and prioritising sustainable projects
Uzbekistan’s double-landlocked situation and rapid population growth contribute to shaping its infrastructure priorities. The country is the most populous in Central Asia, with 36.7 million inhabitants in 2024 (World Bank, 2024[1]). A double-landlocked country, its strategic location at the heart of Eurasian trade corridors highlights the importance of transport connectivity, while rapid population growth and urbanisation place mounting pressure on energy, transport, water and housing infrastructure. Uzbekistan’s infrastructure gaps are particularly acute in energy, transport and municipal services, where outdated assets constrain productivity and create environmental challenges (OECD, 2025[2]).
Despite progress on socioeconomic development, the infrastructure investment requirements for Uzbekistan to achieve its development and climate goals are vast. The World Bank estimates the total investment needs across the power sector, buildings, industry and transport to be nearly 14% of GDP annually to 2060, without taking into account Uzbekistan’s carbon neutrality goal. Incorporating the goal raises the figure to nearly 17%, particularly due to additional investment requirements in the power sector. The assessment assumes that the private sector covers the bulk of investment needs (Table 4.1). While these are large, such investment requirement figures are not unprecedented for fast-growing economies. The UNDP’s Development Finance Assessment takes a wider scope, estimating the annual financing gap to achieve the SDGs primarily but not exclusively through infrastructure investment. According to their assessment, Uzbekistan’s investment shortfall is USD 6-7 billion annually to 2030, or roughly 7-8% of GDP (UNDP, 2021[3]). The investment needs estimates vary widely in their scope and projected spending requirements, and each provides only partial picture of the scale of financing required. Moreover, there is no assessment of the investments required for Uzbekistan to achieve the targets in its development strategies.
Note: Estimated share of private sector is based on international and country specific sub-sector trends (historic and projected).
Given the size of the infrastructure investment gap, public finance alone will be insufficient. Current financing patterns show that most infrastructure investment continues to be funded through international support (multilateral development banks and bilateral donors) and public sources (World Bank, 2023[6]). From 2014 to 2024, Uzbekistan’s government spent USD 53.6 billion on fixed assets in total, i.e. an annual USD 4.9 billion, or 6% of national GDP on average over the period (Figure 4.1). However, public-private partnerships (PPPs) are swiftly emerging as a key instrument, with more than 400 projects under development across energy, transport and healthcare by 2024 compared to none prior to 2018 (Schloemer, 2024[7]). Clean energy has begun to attract international investors: According to the World Bank’s data on Private Participation in Infrastructure (PPI), starting in 2019 until 2024, private firms in collaboration with international finance institutions invested USD 3.7 billion in wind and solar energy projects. According to the OECD DAC database on climate-related development finance, in 2014-2023 Uzbekistan received a committed USD 0.16 billion per year on average for financing projects mostly in energy and transport but also WSS, industry, mining and construction. Almost two thirds of this financing came from multilateral development banks, while the rest mainly came from OECD DAC members.
Note: Capital expenditure refers to the National Statistics Committee of the Republic of Uzbekistan (UzStat)’s category “Share of the state budget of investments in fixed assets”.
Source: Author calculations based on UzStat and the World Bank Sustainable Development Indicators.
Uzbekistan’s state-owned enterprises (SOEs) play a central role in financing infrastructure, particularly in the energy, transport and water sectors. In Uzbekistan as in other countries of Central Asia, SOEs play a key role in the economy, particularly so in utilities and transport sectors, where substantial resources are required for both maintenance and expansion. In Uzbekistan, comprehensive data on total SOE investment are not publicly available, but existing studies indicate that SOEs face chronic under-investment: much of their capital stock has passed its normal service life and significant quasi-fiscal deficits and maintenance backlogs limit the resources available for new investment projects (World Bank, 2023[8]). Given backlogs financing constraints, environmental or climate considerations are not generally taken into account. The Uzbekistan Fund for Reconstruction and Development provides debt financing for SOE modernisation and technical upgrades, but there remains significant scope to align such resources more closely with sustainability objectives, integrating green investment criteria and risk assessments while diversifying financing sources beyond public budgets and international partners.
An assessment of SDG-aligned investment opportunities in Uzbekistan carried out by UNDP in 2022-2023 identified areas with strong potential for private sector engagement across high-priority sectors (Table 4.2). These opportunities were identified based on government commitment, regulatory frameworks and the presence of viable business models. The assessment also highlighted “white spaces” – areas with high potential but limited private sector momentum or insufficient enabling policies. Among the sectors reviewed, energy and transport infrastructure emerged as the most significant white spaces, reflecting both the magnitude of investment needs and the challenges in mobilising private financing.
The UNDP analysis as well as the data presented above highlight the need for developing national policies that can better enable the attraction of private financing for critical infrastructure development, particularly in energy and transport. These sectors stand out as opportunities, where investment demand is high but private sector engagement remains constrained by incomplete liberalisation, weak policy frameworks and underdeveloped financing instruments. Expanding renewable energy generation, modernising grid and distribution systems and creating competitive electricity and gas markets require stronger enabling regulations and incentives. Similarly, rail and road infrastructure face large investment needs, yet the mechanisms for mobilising private capital remain limited. International efforts are ongoing to accelerate sustainable financing flows into such critical sectors, but innovative models, such as blended finance, green bonds, and risk-sharing PPPs, are needed to bridge the gap.
4.1.2. Sustainable infrastructure investments offer an opportunity for Uzbekistan’s long-term economic diversification and competitiveness
Uzbekistan’s economy has undergone rapid growth since 2017 when the government started an ambitious programme of reforms, bringing notable gains in living standards. The country has maintained strong economic performance, with real GDP expanding at an average of 5.7% annually between 2017 and 2023, well above the global average of 2.9% (World Bank, 2025[10]). These gains have translated into tangible welfare benefits: poverty, as defined by the upper-middle income poverty line, fell from 36% in 2015 to around 17% in 2022 (Knight, Rimhidzai and Uochi, 2024[11]), while life expectancy has risen steadily to about 71 years, accompanied by notable gains in maternal and child health indicators, reflecting improvements in healthcare access and social development outcomes (UNDP, 2025[12]).
However, the pattern of growth has left the economy vulnerable to external pressures. Unlike many service-led economies in East Asia, the country’s expansion remains strongly tied to commodity exports such as natural gas, gold, copper and cotton, which make up the majority of Uzbekistan’s export basket (Figure 4.2). Trade is also highly concentrated, with Russia and China absorbing the largest share of exports and imports (Observatory of Economic Complexity, 2024[13]). This dependence on a limited set of commodities and partners makes Uzbekistan particularly exposed to external shocks and global price volatility. To reduce these risks and secure more resilient growth, the diversification of output, employment and exports, underpinned by investment in modern infrastructure, will be critical for unlocking sustainable development pathways (World Bank Group, 2023[5]).
Export revenue in USD billion (left axis) and exports from non-resource sectors as a percentage of total exports (also left axis), 2018-2023
Energy infrastructure will be central to enabling the transition. Uzbekistan’s power system suffers from decades of underinvestment, with 40% of installed capacity exceeding its design life (World Bank, 2023[6]). Chronic electricity shortages and frequent outages affect both households and industry, while rising demand, driven by industrial expansion and population growth, puts further pressure on the system (Mork, Saparova and Bilek, 2024[14]). Uzbekistan’s electricity demand has grown by over 50% since 2010 (IEA, 2025[15]), and projections based on a business-as-usual scenario suggest demand could double by as early as 2035, with industry accounting for the largest share of additional demand (Mork, Saparova and Bilek, 2024[14]). Despite historically producing enough natural gas for domestic consumption and export, Uzbekistan has become a net importer of natural gas and periodically imports electricity to meet peak demand (Eurasianet, 2024[16]). This trajectory underscores the urgency of expanding renewable energy generation capacity. Improving efficiency through modernisation of transmission and distribution networks will also be key to prevent widening supply-demand gaps.
4.1.3. A significant transformation of Uzbekistan’s current infrastructure base is needed to make it sustainable in the face of climate and environmental challenges
Uzbekistan has taken significant steps to align its national development trajectory with global sustainability and climate objectives. The government has demonstrated commitment to the Sustainable Development Goals (SDGs) by integrating them into national planning and monitoring systems, establishing an SDG Co-ordination Council, developing an SDG Roadmap, and launching a public web platform to track progress (UNDP, 2024[17]). Under the Paris Agreement, Uzbekistan strengthened its climate ambitions through its updated Nationally Determined Contribution (NDC) in November 2025, pledging to reduce greenhouse gas (GHG) emissions per unit of GDP by 50% by 2035 compared to 2010 levels—up from its 35% target by 2030, submitted in its first update in 2017 (Government of Uzbekistan, 2025[18]).
Achieving Uzbekistan’s growth objectives while remaining aligned with sustainability commitments will require a profound transformation of the country’s infrastructure base, driven by stronger planning, investment mobilisation and institutional capacity. Uzbekistan’s greenhouse gas (GHG) intensity of GDP remains high compared to international benchmarks, even though it has been on a gradual downward trajectory in recent years (Figure 4.3). The energy sector is the main driver of this carbon profile: despite contributing only around 0.3% of global emissions, Uzbekistan’s economy is still highly carbon-intensive due to its reliance on fossil fuels. In 2022, natural gas accounted for about 76% of electricity generation, while renewables supplied less than 2%, primarily from long-operating hydroelectric stations (IEA, 2025[19]).
Uzbekistan’s energy sector offers the greatest opportunity to reduce greenhouse gas emissions. The energy sector dominates the country’s emissions profile, accounting for over 60% of total GHG output (Figure 4.4), and relies on inefficient transmission networks and outdated gas-fired power plants, with around 40% of installed capacity already past its service life (OECD, 2025[2]). Much of the existing infrastructure, especially in power generation, district heating and transport, was built with a focus on expanding capacity rather than efficiency or sustainability. Inefficient heating systems, combined with low levels of electrified transport and limited public transit, further constrain Uzbekistan’s ability to shift towards lower-emission pathways (UNECE, 2024[20]).
Kiloton of CO2e per USD 1 million of GDP, 1990-2022
GHG emissions in megatons of CO2e
Note: Excludes land use, land-use change and forestry (LULUCF). IPPU = industrial processes and product use.
Uzbekistan is already experiencing the effects of climate change, which pose growing risks to its infrastructure, economy and society. On average, the country’s average maximum temperature has increased annually by approximately 1.6°C since 1950, a rate that exceeds the global average warming trend (World Bank Group and ADB, 2021[23]). Climate projections indicate that droughts, heatwaves, and extreme precipitation events are expected to increase in frequency and severity, further exacerbating pressures on natural resources and infrastructure (World Bank Group and ADB, 2021[23]). Water scarcity and desertification, for instance, are emerging as some of Uzbekistan’s largest challenges (Box 4.1). These climate-related hazards particularly affect rural regions, where critical infrastructure, such as roads, irrigation networks, and energy supply systems, is frequently damaged or disrupted, undermining access to essential services and threatening agricultural productivity and rural livelihoods (World Bank, 2024[4]).
Uzbekistan faces mounting environmental pressures that threaten its long-term sustainability and infrastructure resilience.
Water scarcity is among the most acute, driven by climate change, population growth and economic expansion. Reliance on the Amu Darya and Syr Darya river basins has become increasingly precarious as per-capita water availability has fallen by more than half since 1960. Inefficient irrigation, limited wastewater treatment and rising pollution further strain supplies. Droughts have already reduced crop yields, lowered groundwater levels and disrupted energy production, with ripple effects on food security and industry. Water stress also affects key export sectors such as mining, metallurgy and cotton-based textiles, underscoring the need for integrated, cross-sectoral water and climate governance.
Land degradation and desertification add to these risks. Nearly one-third of agricultural land has lost productivity, while desert and riparian ecosystems continue to deteriorate. The Aral Sea’s collapse, leaving barely 10 % of its former area, has exposed a toxic seabed that fuels dust storms and accelerates desertification across Karakalpakstan and beyond. These environmental trends undermine agricultural output, ecosystem services and the resilience of critical infrastructure, calling for co-ordinated adaptation, land restoration and resource management efforts.
Urbanisation adds a further layer of pressure to infrastructure systems. Uzbekistan’s urban population has gradually grown from 42% in 1991 to over 50% in 2023 (World Bank, 2024), straining local infrastructure capacity. In major urban centres such as Tashkent and Samarkand, this rapid expansion has outpaced infrastructure upgrades, resulting in traffic congestion, deteriorating air quality and rising wastewater pollution (World Bank, 2024[4]).
Infrastructure plays a pivotal role in shaping public health outcomes in Uzbekistan. Annual health damages from ambient fine particulate matter (PM2.5) air pollution, caused in part by a reliance on informal coal and biomass heating in urban and peri-urban areas, amount to an estimated 6.5 percent of GDP, disproportionately affecting women, children and vulnerable populations (World Bank Group, 2023[5]). In Uzbekistan, and in Tashkent in particular, average concentrations of PM2.5 exceed the WHO’s annual average guideline by a factor of six, leading to an estimated 3,000 premature deaths annually and annual welfare losses of USD 488.5 million (World Bank, 2024[25]).
The transition to an infrastructure approach aligned on environmental and sustainable goals offers a strong opportunity for enhanced gender outcomes. OECD research finds strong interlinkages between the energy transition and the advancement of gender equality, if proper policies are in place, by reducing energy access inequalities and enhanced economic and job opportunities (OECD, 2024[26]). Equal access to transport services is also a pillar of gender equality (World Bank, 2025[27]). Despite national commitments to gender equality, reflected in the adoption of gender equality laws, the gender agenda remains disconnected from infrastructure planning and sectoral strategies (see section 4.2.6). Embedding gender into Uzbekistan’s infrastructure reforms, notably in energy and transport, can help ensure strong alignment with the principles of a just and inclusive transition. It will, however, require specific tools and approaches.
Aligning infrastructure investments with economic, social and environmental sustainability outcomes requires that the national strategic framework provides clear qualitative and quantitative objectives for sustainable infrastructure development. The national strategic planning framework includes (i) governance and strategic policy frameworks, i.e., the processes, systems, and practices through which infrastructure decisions are made, as well as strategic plans, policies and programmes driving infrastructure planning; (ii) long-term planning tools backed by robust modelling, scenario-building and foresight capabilities; (iii) credible national sustainability and climate commitments; (iv) specific tools, methods and capabilities for mainstreaming sustainability into infrastructure planning and project-level appraisals.
Uzbekistan has strengthened the strategic foundations for sustainable infrastructure planning. Institutional reforms have improved policy co-ordination and investment oversight, and sustainability objectives are now embedded in major development strategies. The forthcoming Long-Term Low-Emission Development Strategy (LT-LEDS), together with new legislation on Strategic Environmental Assessment (SEA) and adoption of the national Green Taxonomy, further enhances the policy framework for aligning infrastructure development with climate and sustainability goals. To build on this progress, Uzbekistan could:
Advance the LT-LEDS process as a central policy planning tool. Use it to set more ambitious climate targets, monitor and assess policies against decarbonisation targets, and ensure alignment of other national strategic documents, including NDC plans, with LT-LEDS objectives. Build on the LT-LEDS to build sectoral decarbonisation pathways.
Facilitate national dialogue on fossil-fuel transition. Use the LT-LEDS process to model scenarios for reducing reliance on gas and coal in power and heating, engage industry and regional stakeholders to assess socio-economic impacts, and define just transition measures aligned with 2030 and 2060 climate targets.
Strengthen infrastructure governance for sustainability. Build on recent institutional reforms by applying the OECD Infrastructure Governance Indicators (IGIs) to assess planning, appraisal and procurement practices, and integrate climate, resilience and gender criteria into investment selection and monitoring across ministries.
Enhance environmental and economic appraisal. Adhere to international EIA and SEA obligations, render assessments mandatory for high-impact projects, and create clear channels for them to inform decision making. Expand the use of integrated cost-benefit analysis, such as SAVi, in priority projects across energy, transport and industry.
4.2.1. National governance and strategic framework for sustainable infrastructure development
Uzbekistan’s governance system for infrastructure planning and budgeting
Uzbekistan’s system for sustainable infrastructure planning is anchored in recent institutional reforms that strengthen policy co-ordination and investment management. Wide-ranging reforms beginning in 2022 simplified the structure of Uzbekistan’s government, reducing the number of independent government bodies from 61 to 28 and the number of cabinet-level ministries from 25 to 21 (Government of Uzbekistan, 2022[28]). Following these reforms, the now-unified Ministry of Economy and Finance continues to play the central role, overseeing economic strategy, infrastructure programming and financing frameworks in line with national development priorities (Government of Uzbekistan, 2022[29]). Meanwhile, the Ministry of Investments, Industry and Trade (MIIT) consolidates investment proposals, including those funded by foreign direct investment and donors, and drafts investment programmes. Alongside these, the Agency for Strategic Development and Reforms (ASDR), reorganised and institutionally strengthened under Presidential Decree No. PR-201 of 30 October 2025, acts as the authorised state body for organising and regulating the national system of strategic planning and development. ASR also serves as the working body of the Co-ordination Council on strategic planning and development. These agencies channel final approval through the Cabinet of Ministers and Presidential Office based on strategic alignment and budget availability (World Bank, 2023[6]). These institutions collectively form the backbone of Uzbekistan’s governance framework for aligning infrastructure development with sustainability and long-term growth objectives.
Infrastructure projects are selected based on a combination of economic efficiency, strategic fit, and readiness, though funding availability can overshadow these criteria. Project proposals originate from line ministries and are filtered through MIIT and the Ministry of Economy and Finance before being approved in rolling three-year investment programs publicly disclosed, including timelines, financing sources, and project descriptions (World Bank, 2023[6]). Project implementation and follow-up are supported by an increasingly formalised monitoring and evaluation framework. Monitoring and evaluation have been institutionalised through a national digital monitoring platform introduced under Presidential Resolution No. PD-394 of 29 December 2025, which requires budgetary programmes seeking public financing to be justified and tracked through a centralised system.
Institutional fragmentation has been reduced by recent reforms but continues to persist. Historically, infrastructure investment has suffered from fragmentation across funding sources (e.g. state budgets, donor funding, IFIs, FDI and PPPs), leading to duplication and weak scrutiny. Recent administrative reforms, including merging the economy and finance ministries and forming the ADSR, aimed to streamline decision-making and consolidate public investment functions (World Bank, 2023[6]). However, co-ordination challenges remain between the Ministry of Economy and Finance and the Ministry of Ecology, Environmental Protection and Climate Change, both of which hold overlapping climate-related mandates. The lack of co-ordination prevents systematic integration of climate priorities into investment planning and budget processes. Additionally, alignment between budget-financed projects and those financed externally remains incomplete, and formal selection requires better clarity and consistency (World Bank, 2023[6]).
Capacity constraints remain a major barrier to sustainable infrastructure development, particularly at the sectoral levels. Line ministries such as the Ministry of Energy or Ministry of Transport prepare investment proposals and technical justifications, which are then reviewed by the Ministry of Economy and Finance for budget integration and, in some cases, by the ADSR for alignment with broader reform priorities and governance standards. Subnational governments also play a role by submitting local investment needs to the relevant sectoral ministries, which act as intermediaries in consolidating proposals before they reach the Ministry of Economy and Finance. This bottom-up process is further formalised under Presidential Resolution No. PD-394, which reinforces ADSR’s co-ordinating role in regional development through local Reform Headquarters and structured engagement with local authorities, business entities and civil society. However, feasibility studies and environmental assessments are inconsistently applied, and local authorities often lack the expertise and resources to prepare robust project documentation decisions (World Bank, 2023[6]). For instance, while the Ministry of Ecology, Environmental Protection and Climate Change and its subnational units are responsible for EIAs, there is no clear mechanism to ensure EIA results influence investment decisions (World Bank, 2023[6]). This creates a dependency on central agencies to filter and prioritise projects, while climate resilience and sustainability considerations are only partially incorporated into appraisal and selection processes decisions (World Bank, 2023[6]).
Applying the OECD’s Infrastructure Governance Indicators (IGIs) would enable Uzbekistan to benchmark practices and identify solutions for strengthening its infrastructure governance. This diagnostic framework evaluates infrastructure governance along dimensions such as planning and prioritisation, value-for-money, fiscal sustainability, procurement, transparency, and climate resilience, offering a structured path to bridge policy and institutional gaps (Box 4.3).
The OECD Infrastructure Governance Indicators (IGIs) provide a comprehensive framework to assess and compare how countries plan, fund, deliver and monitor infrastructure. Organised around key governance dimensions such as strategic planning, project appraisal, sustainability, procurement and transparency, the IGIs support evidence-based policy dialogue and institutional reform.
By using the IGIs, emerging economies can:
Conduct structured diagnostics to identify governance gaps.
Benchmark their infrastructure governance against regional and OECD peers.
Prioritise reforms that enhance transparency, resilience, and long-term value for money.
Strengthen policy credibility with investors and development partners.
Under SIPA, the OECD held a series of consultations and capacity-building sessions with national planning agencies in Indonesia, the Philippines, and Thailand, who responded to a pilot survey. Findings from the survey highlight strong foundations in long-term planning and sustainability commitments across the three SIPA countries as well as identify areas for improvement.
Indonesia has strong long-term planning frameworks and integrates climate considerations but lacks project-specific benchmarks and independent project review.
The Philippines systematically assesses affordability and uses detailed benchmarks and climate data but lacks a framework to evaluate procurement against green and social objectives.
Thailand promotes green procurement and environmental standards but does not require early-stage stakeholder consultation or independent review of major projects.
Source: (OECD, 2025[30]; OECD, 2023[31]).
The national strategic framework for sustainable infrastructure development
Infrastructure is a key feature of Uzbekistan’s strategic national development framework. Uzbekistan’s strategic planning framework is governed by a unified national system of strategic planning and development introduced under Presidential Decree No. PR-201 of 30 October 2025. The system establishes a clear hierarchy of strategic documents and regulates their preparation, implementation, monitoring and evaluation based on a ‘goal–action–result’ chain, with defined institutional responsibilities, measurable indicators and identified financing sources. Key policy documents, including the Strategy “Uzbekistan 2030”, the Development Strategy of the New Uzbekistan 2022–2026 and the annual State Programmes, frame infrastructure as a driver of growth, connectivity, and inclusion, focused on modernising transport, energy and industry, expanding water and sanitation access, advancing digitalisation and enabling economic diversification. Uzbekistan 2030 aims to transform the country into an upper-middle-income state, with infrastructure being a core pillar. The strategy sets a goal of attracting USD 250 billion in total investment into the country and targets the implementation of over 500 strategically important technological and infrastructure projects with a total value of USD 150 billion (Government of Uzbekistan, 2023[32]). While high-level strategies indicate only general funding priorities without itemised lists of priority projects, priority project lists are included in rolling three-year investment plans, the most recent of which covers 2023-2025.
Uzbekistan’s strategic development framework places infrastructure at the centre of its green transition and climate ambitions. The Nationally Determined Contribution 3.0 (NDC 3.0) commits to reducing GHG emissions per unit of GDP by 50% by 2035 (relative to 2010), and highlights infrastructure improvements in energy, transport and urban systems as critical drivers of mitigation and resilience. Unlike the other programme countries, Uzbekistan anchored their reduction goal to GDP, making it dependent on both GHG emission reductions as well as GDP growth. An intensity-based target considers the economic feasibility, especially for a transition economy like Uzbekistan, but exhibits lower climate ambition compared to an absolute emission reduction target.
In 2019, Uzbekistan introduced its first legal instrument to boost economic growth and combat climate change through the Strategy for the transition of the Republic of Uzbekistan to a “Green” Economy for the Period 2019-2030. This comprehensive strategy, complemented by several other strategy documents and detailed action plans, provides a clear roadmap for the nation’s green transition. The strategy outlines six priority themes, including promoting renewable energy sources like solar and wind, implement widespread energy efficiency measures, establish a national waste management system, preserve natural ecosystems and attract investments in green technologies and infrastructure. Several other recently adopted strategic plans and policies for infrastructure development incorporate a strong sustainability dimension (Table 4.3).
Climate considerations are increasingly reflected in Uzbekistan’s national development strategies, but integration into infrastructure planning remains partial and uneven. The Uzbekistan-2030 Strategy, revised in a new edition prepared in late 2025, introduces strictly measurable indicators, annual targets through 2030, clearly assigned institutional responsibilities and identified financing sources. It acknowledges climate change and positions environmental sustainability as a priority, while the 2023–2025 Investment Programme sets out a pipeline for renewable energy projects and other priority infrastructure projects. The State Programme for 2025, designed to operationalise Uzbekistan–2030, goes further by emphasising a “green economy,” prioritising green infrastructure, the development of NDC 3.0, a long-term carbon-neutrality strategy, and the use of PPPs to scale up renewable energy. The Green Economy Strategy to 2030 also provides an enabling framework for low-carbon investment. Yet inconsistencies persist: Uzbekistan’s updated NDC 3.0 (2025) commits to cutting emissions intensity by 50% from 2010 levels by 2035 and achieving net-zero by 2060, but sectoral energy policy still foresees a doubling of coal use in power generation, undermining these goals. Moreover, climate objectives are not systematically embedded into investment planning, budgeting or procurement, making progress heavily dependent on external support and heightening the risk of carbon lock-in and stranded assets, particularly in the power sector.
Transforming Uzbekistan’s energy infrastructure is central to achieving its climate goals, but closing the gap will require a credible decarbonisation strategy, coherent policies and clear investment frameworks. The power system is still dominated by natural gas and coal, which account for over 85% of electricity generation. To expand renewables, the government adopted the Law on the Use of Renewable Energy Sources and follow-up decrees on grid connection (Government of Uzbekistan, 2019[33]), supporting the Uzbekistan–2030 Strategy target of 25 GW renewable capacity by 2030. Yet there is still no national strategy for decarbonising heating, even though district heating and household coal burning are among the largest contributors to emissions and urban air pollution (World Bank Group, 2023[5]). Current frameworks mention clean heating only in general terms, without a roadmap for technology adoption, investment, or governance reform, while sectoral energy plans continue to foresee expanded coal-based generation. These inconsistencies risk undermining Uzbekistan’s climate efforts, locking in fossil-fuel dependence and creating stranded asset risks in the power and heating sectors.
Sustainable transport is emerging as a priority in Uzbekistan’s long-term planning, but key strategies remain fragmented and inconsistent with climate goals. The Uzbekistan–2030 Strategy and the 2025 State Programme include commitments to expand urban public transport, improve fuel quality and modernise logistics corridors, while the 2023–2025 Investment Programme sets out major rail, road, and airport modernisation projects (Box 4.4). However, the Transport Strategy to 2030 frames rail electrification, road construction and logistics development mainly in terms of economic growth and regional connectivity, with limited emphasis on emissions reduction or low-carbon mobility. There is still no dedicated sustainable transport strategy with sector-specific emission reduction targets, binding timelines, or an integrated investment framework.
Uzbekistan lacks a comprehensive industrial decarbonisation roadmap, even though mining and manufacturing infrastructure are central to both growth and emissions. The Industrial Development Strategy 2030 emphasises value-added mineral processing, regional industrial hubs and diversification, enshrined in the "Uzbekistan-2030" Strategy, but provides scant direction on emissions reduction, energy efficiency or clean technologies, instead focusing on industrial value chain expansion. The broader Green Economy Strategy for 2019-2030 does propose energy efficiency improvements and green investment incentives within industry, including public–private partnerships and international collaboration, but these remain high-level and lack binding standards or enforcement for emissions performance in mining and metallurgy. Without clear regulatory incentives, emissions monitoring, or performance metrics, industry infrastructure development risks diverging from Uzbekistan’s climate goals and locking in carbon-intensive pathways.
The Uzbekistan-2030 Strategy sets a goal of carrying out over 500 strategically important technological and infrastructure projects with a total value of USD 150 billion, operationalised through the costed Investment Programme 2023-2025 and uncosted 2025 State Programme. The Investment Programme lists approximately USD 95 billion worth of projects, including a rapid expansion of renewable energy (23 facilities, 5 GW of new capacity) as well as the expansion and modernisation of rail and urban transport. However, the Investment Programme also plans the construction of 3 thermal power plants with a combined capacity of 4.6 GW and an expansion of Uzbekistan’s gas production, counteracting progress on greening Uzbekistan’s grid.
Several capital-intensive megaprojects are also planned or under development, often driven by international partners. The energy sector accounts for some of the most capital-intensive megaprojects. In 2024, the government announced waste-to-energy plants capable of processing 4.7 million tonnes of solid waste annually into 2.1 billion kWh of electricity by 2027, with international partners from China, the UAE and South Korea (Fergana News, 2025[34]). Nuclear energy has also been prioritised: the construction of six small modular reactor units (55 MW each) in Jizzakh Region is planned, with the first unit scheduled to come online by 2029, while feasibility work for a large-capacity nuclear plant is under discussion with Rosatom (World Nuclear News, 2025[35]).
Uzbekistan’s transport megaprojects focus on regional connectivity. The China–Kyrgyzstan–Uzbekistan (CKU) Railway, a new 523‑km international rail line from Kashgar (China) through Kyrgyzstan to Andijan (Uzbekistan) is under development, with the route expected to reduce transit times to Europe by 7–10 days and bypass existing congestion in Kazakhstan (Fazl-e-Haider, 2025[36]). The Uzbekistan–Afghanistan–Pakistan (UAP) Railway Corridor, also known as the Trans‑Afghan Railway, will link Tashkent to Peshawar via Afghanistan, cutting freight transit times by about 5 days and reduce transport costs by roughly 40% (SpecialEurasia, 2025[37]).
Despite the scale and potential environmental impacts of these megaprojects, Environmental Impact Assessments (EIAs) and Strategic Environmental Assessments (SEAs) have not yet been applied systematically. While projects supported by international partners, such as renewable energy plants financed by the IFC or ADB, are typically subject to full EIA procedures consistent with international safeguards, many large-scale infrastructure and energy projects listed under the Investment Programme have proceeded without published environmental assessments or with assessments conducted late in the project cycle, despite recent legislative advances intended to make both processes mandatory (World Bank Group, 2023[5]).
4.2.2. Long-term planning tools: modelling, scenario-building and foresight capabilities
Planning the transition to a net-zero, climate-resilient economy by mid-century requires new tools that look beyond traditional short-term horizons, account for greater uncertainty and allow flexibility across multiple scenarios. Such approaches are essential for aligning infrastructure investment with national climate commitments on greenhouse gas (GHG) reduction, while also supporting broader sustainability objectives such as pollution control, resilience and ecosystem protection. In this context, integrating climate adaptation and risk considerations into strategic infrastructure planning is critical. Key enabling instruments include long-term low-emission development strategies, disaster- and resilience-focused risk assessment tools and foresight methodologies to guide mitigation and adaptation pathways.
Developing and implementing Uzbekistan’s LT-LEDS
Work is advancing to prepare a Long-Term Low-Emission Development Strategy (LT-LEDS) for Uzbekistan. Since 2023, the Government, through the Ministry of Economy and Finance and line agencies, has been collaborating with the World Bank to develop a long-term decarbonisation strategy that identifies low-carbon pathways and integrates them into policy and investment processes1. Complementary World Bank support (including through climate support facilities and guidance on a national green taxonomy) is helping to map sequencing, analytical needs and enabling regulations for implementation (World Bank, 2023[38]). Uzbekistan aims to finalise its LT-LEDS in 2026, aligning the strategy with the 2060 target and the Uzbekistan-2030 policy framework.
Building knowledge and capabilities on modelling and scenario-building tools supporting LT-LEDS development was an important feature of SIPA. This support to national think tanks and national experts was based on the experience of the Deep Decarbonisation Pathway (DDP) initiative of IDDRI (Box 4.5).
The DDP Calculator is an open-source modelling tool designed to quantify long-term emission-reduction scenarios and assess the socio-economic implications of energy transitions. Developed by the Institute for Sustainable Development and International Relations (IDDRI), the Calculator enables governments and research teams to construct consistent, transparent scenarios to 2050-2070 that are aligned with national development objectives and Paris Agreement targets.
The Calculator integrates sectoral data on energy supply and demand, technology costs, fuel use and efficiency measures to simulate alternative decarbonisation pathways. It links energy system trajectories (e.g. generation mix, fuel switching, electrification rates) with emission outcomes and macroeconomic indicators, allowing users to explore trade-offs between affordability, security and environmental ambition. Thanks to its transparent, spreadsheet-based structure, the Calculator can be applied in contexts with limited data or modelling capacity while remaining compatible with more advanced tools.
Under SIPA, a local project partner in Uzbekistan, the Centre for Economic Research and Reforms (CERR) under the Presidential Office, applied the DDP Calculator to analyse infrastructure-related sectors, including power and heat generation, transport, buildings and high-impact industries. Two key scenarios were considered: 1) current business-as-usual policy scenario (extrapolated to 2050) and 2) ambitious decarbonisation scenarios. The Calculator’s application served as a practical entry point for quantitative assessment of the potential and feasibility of GHG emission reduction under the forthcoming LT-LEDS and allowed policy makers to test combinations of renewable energy deployment, grid modernisation, fossil-fuel phase-out and efficiency improvements, and to visualise their impacts on national emissions. Used jointly by national experts and international experts from IDDRI, the tool supported evidence-based dialogue on feasible decarbonisation pathways, enabling the integration of sectoral modelling results into strategic planning and the energy investment plans.
While the government develops its LT-LEDS, the OECD suggests an approach to foster Policy Coherence for Sustainable Development (PCSD). This approach aims to “systematically integrate economic, social and environmental dimensions of sustainable development at all stages of domestic and international policy making”, adjusted and applicable to the development and implementation of LT-LEDS (Aguilar Jaber et al., 2020[39]). This approach revolves around eight building blocks against which can be assessed the quality of the process leading to the strategy, the document itself, and the strategy implementation (Table 4.4).
Building blocks of the approach and corresponding enabling factors at each stage of the LT-LEDS
Source: Author’s elaboration based on Aguilar Jaber et al. (2020[39]).
Uzbekistan could also draw constructive lessons from the recent experiences of other countries undertaking similar long-term transition processes, particularly Kazakhstan, which provides relevant insights for shaping Uzbekistan’s own LT-LEDS. Both countries share structural challenges, including heavy reliance on fossil fuels, especially coal and natural gas, although Uzbekistan differs on its dependence on imports to meet its coal and, increasingly, gas needs. The countries also share geographical and climatic constraints that complicate rapid diversification of the energy mix. Kazakhstan’s experience illustrates the risks of insufficient stakeholder engagement early in the process, particularly among groups likely to resist ambitious decarbonisation objectives, such as coal-producing regions and industry representatives. Failure to build consensus with these constituencies has, in Kazakhstan’s case, limited the credibility and traction of its long-term climate strategy. Likewise, the absence of clear interim milestones and binding targets can undermine confidence in the feasibility of achieving net-zero by 2060,2 reducing the LT-LEDS’ effectiveness in guiding low-carbon investment and infrastructure planning. For Uzbekistan, establishing early dialogue with affected stakeholders and adopting unambiguous long-term signals will be essential to ensure its LT-LEDS is viewed as both credible and actionable, providing the incentives necessary for private and public actors to align with the low-carbon transition.
In an increasingly uncertain and interconnected world, evidence-based policymaking must account for shocks that cut across economic, environmental and social systems. Strategic foresight provides governments with tools to navigate this uncertainty by stress-testing policies against multiple possible futures.
4.2.3. Credible national sustainability and climate commitments
Uzbekistan’s credibility in meeting its climate and sustainability commitments will hinge on sustaining recent progress in renewables and efficiency while carefully managing the continued dominance of natural gas to ensure that energy sector expansion remains consistent with long-term decarbonisation goals. Despite the targets outlined in Uzbekistan’s updated NDC and the long-term objectives under the Strategy for Transition to a Green Economy 2019–2030, natural gas continues to account for more than 80% of electricity generation, while coal use has been rising in recent years to meet growing demand for power and heat (Figure 4.5). A recent OECD report finds that, while the share of coal, oil and gas almost halved between 2019 and 2023, it still accounted for 21.8% of total greenfield FDI (OECD/ADB, 2025[40]). Nonetheless, Uzbekistan outperformed is regional peers in attracting private investments to large-scale renewable projects and is taking important first steps towards aligning its policies with a low-carbon transition. Managing a just and gradual transition away from fossil fuels will therefore be essential if Uzbekistan is to achieve its emission reduction targets, enhance energy security, and address pressing air quality issues in urban areas such as Tashkent and Navoi.
GWh, 2000-2022
Source: (IEA, 2025[19]).
Natural gas currently fuels the majority of Uzbekistan’s power generation, complemented by coal and a relatively small share of hydropower and renewables. In 2022, 73.8 TWh of electricity was generated, of which nearly four-fifths came from gas-fired power plants. The government’s pledge to scale up renewable energy to 25 GW of installed capacity by 2030 represents one of the most ambitious clean energy targets in the region, yet the reliance on gas and coal to meet rapidly growing demand risks locking in a carbon-intensive trajectory. If the bulk of future electricity needs are covered through new fossil-fuel capacity, Uzbekistan’s power sector emissions will continue to rise, undermining the credibility of its decarbonisation pathway and complicating efforts to meet both its NDC commitments and its emerging long-term low-emissions development strategy (LT-LEDS). This reliance on fossil fuels also has direct implications for Scope 2 emissions in industry, given the heavy use of electricity and heat in energy-intensive sectors such as mining, chemicals and metallurgy, which continue to receive substantial amounts of investment (OECD/ADB, 2025[40]).
Uzbekistan faces a critical challenge in balancing its energy security needs with climate and sustainability objectives. The country has substantial plans to expand gas-fired generation, while renewable energy development, though growing, remains a small fraction of total capacity. According to the Investment Programme 2023-2025, Uzbekistan aims to add roughly 4.6 GW of new thermal power plants, just slightly less than the 5 GW of new planned renewable capacity. If these projections materialise, progress on diversifying Uzbekistan’s electricity mix will be slowed considerably and the country’s carbon-intensive energy pathway will be further entrenched.
The government’s climate and renewable energy commitments, including targets under its NDC 3.0 and Green Economy Strategy, currently contrast with this expansion trajectory. Progress is evident in recent renewable tenders, foreign investment partnerships, and pilot projects on carbon pricing, but the absence of a credible natural gas transition plan could constrain the pace and scale of decarbonisation, and risks locking the electricity system into high-carbon pathways.
Uzbekistan shares with other emerging economies the challenge of managing a just and inclusive energy transition. Its heavy reliance on natural gas, coupled with the rapid expansion of electricity demand driven by industrialisation, necessitates robust planning and dialogue at national and regional levels. Experience from other countries, including lessons from coal-intensive economies like Mongolia and Kazakhstan, underscores the importance of engaging stakeholders, particularly those in regions or sectors dependent on fossil fuels, in developing credible decarbonisation strategies. The ongoing LT-LEDS development process can serve as a critical platform for scenario modelling, socio-economic impact assessment, and the co-ordination of policies across energy, industrial and climate domains. Complementary measures, such as detailed planning for renewable energy deployment and integration into regional development objectives, will be essential to ensure that Uzbekistan’s energy transition is both economically and environmentally sustainable.
Carbon pricing presents an emerging opportunity to reinforce Uzbekistan’s transition. In mid-2025, Uzbekistan approved legislation to establish a domestic emissions trading system (ETS), effective January 2026, allowing companies to generate and trade emissions reductions domestically and internationally (Enerdata, 2025[41]). As a precursor to this, the World Bank’s iCRAFT initiative provided a USD 7.5 million result-based climate finance payment in June 2024 to Uzbekistan in recognition of 500 000 tonnes of verified emission reductions, linked to energy efficiency and fossil fuel subsidy reform (World Bank, 2024[42]).
To enhance the credibility of its climate action, Uzbekistan should:
Adopt a comprehensive long-term low-emissions development strategy that builds on its NDC and outlines a pathway to net-zero, supported by sectoral emissions modelling and infrastructure lifecycle assessments.
Lay the groundwork for effective carbon pricing implementation by ensuring the new proposed emissions trading framework is gradually integrated into broader fiscal, social, and energy market reforms. In parallel, Uzbekistan should develop institutional capacity for emissions monitoring, reporting and verification (MRV), and establish mechanisms to reinvest eventual carbon revenues in renewable energy, energy efficiency and equitable energy access, particularly for vulnerable groups.
4.2.4. Policy-level and asset-level sustainability evaluation tools integrating environmental and social considerations
Evaluation tools play a critical role at both the policy and asset levels in promoting more sustainable and cost-effective infrastructure. At the policy level, instruments such as Strategic Environmental Assessments (SEAs) help integrate environmental and social considerations into high-level planning and decision-making frameworks. At the asset level, tools that build on classic cost-benefit analysis and include environmental sustainability criteria, such as Sustainable Asset Valuation (SAVi) Assessments, along with Environmental Impact Assessments (EIAs) and approaches developed by international partners such as the UNECE’s PPP and Infrastructure Evaluation and Rating System (PIERS), help evaluate the specific impacts of individual infrastructure projects.
These tools improve decision-making in infrastructure development both when establishing policy directions and during the implementation of specific projects. They support a more comprehensive evaluation of cost-effectiveness by incorporating indirect and often neglected economic, environmental and social costs as well as benefits across all stages of the infrastructure lifecycle. In addition, these tools assist project developers and stakeholders in securing sustainable financing by demonstrating the integration of sustainability consideration from the outset and throughout the planning and development process.
Uzbekistan is not yet a party to the Espoo Convention Environmental Impact Assessment in a Transboundary Context or the Protocol on Strategic Environmental Assessment but it has developed and recently improved upon a legal framework for environmental assessments. In Uzbekistan, Environmental Impact Assessments (EIAs) were first introduced in 1992 through the Law on Nature Protection and further formalised in 2000 in the Law on Ecological Expertise. In August 2025, Uzbekistan strengthened and modernised the EIA process in line with international standards through the Law on Environmental Expertise, Environmental Impact Assessment and Strategic Environmental Assessment (Government of Uzbekistan, 2025[43]). The Law also mandates SEA application to strategic documents as well as national and regional development plans.
Uzbekistan has recently taken an important step by adopting legislation mandating the use of Strategic Environmental Assessments (SEAs). Wider application of SEAs can deliver multiple benefits: they help ensure that development policies and programmes are environmentally sound and aligned with sustainability objectives, while also improving the quality and coherence of planning processes. By identifying environmental and social risks at an early stage, SEAs reduce the likelihood of costly mistakes and delays, ultimately saving time and resources. They also enhance transparency, strengthen governance, and build public trust in decision-making. In addition, given Uzbekistan’s reliance on shared water and energy resources, SEAs can play a valuable role in fostering co-operation and alignment in transboundary contexts (UNECE, n.d.[44]).
The effective implementation of Strategic Environmental Assessment (SEA) requires both supportive framework conditions and practical measures for execution. At the institutional level, this involves clear government commitment, sufficient financial resources, and the integration of SEA provisions into sectoral planning rules. A well-designed system of incentives within the regulatory and administrative framework is also key to promoting compliance and consistent application. Equally critical is the active involvement of stakeholders and the sharing of knowledge, which ensure that the process remains transparent, inclusive, and trusted (OECD, 2006[45]).
At the operational level, EIA and SEA should be applied at the earliest stages of the planning cycle to help shape strategic decisions from the outset. Flexibility in methods is important, especially where data gaps exist, and drawing on external expertise can strengthen both the quality and credibility of assessments. For SEAs to deliver real impact, their findings must be systematically incorporated into the revision of plans and programmes. In addition, strong monitoring and long-term evaluation systems are needed to measure effectiveness and enable adaptive management over time (OECD, 2006[45]). Early integration of EIA processes is particularly critical in Uzbekistan, where historically assessments have often been conducted only after project design, limiting their ability to influence key investment and location decisions (World Bank Group, 2023[5]).
Integrated cost-benefit analysis: the example of SAVi and its application in the Uzbekistani context
Cost-benefit analysis remains the most common tool for evaluating the economic viability of infrastructure projects in Uzbekistan. It estimates the monetary value of costs and benefits within a given geography and timeframe, often expressed as a benefit-cost ratio (OECD, 2018[46]). Advances in valuation methodologies make it possible to account for environmental and social factors such as ecosystem services or pollution costs (OECD, 2018[46]). However, in practice, these dimensions are only partially reflected in infrastructure appraisals in Uzbekistan, which risks presenting an incomplete picture of a project’s long-term value or risk exposure.
Under SIPA, the Sustainable Asset Valuation (SAVi) methodology was applied to a pilot project to demonstrate the benefits of integrating environmental and social costs in conventional cost-benefit analysis (Box 4.6). SAVi combines system dynamics with project finance modelling to capture the full economic, social, environmental, and governance risks of infrastructure projects and to quantify externalities in monetary terms. By providing a life-cycle assessment of costs and benefits, it helps policymakers and investors identify trade-offs and build stronger cases for sustainable infrastructure investment. In Uzbekistan, further applying tools like SAVi would enable decision makers to align investment choices not only with financial returns but also with the country’s broader priorities (e.g. achieving carbon neutrality by 2060, meeting NDC commitments, and advancing the UN SDGs). In this way, capital can be steered toward infrastructure that supports long-term resilience and low-carbon development.
The Uchkuduk–Kazakhstan Border Highway, running through Karakalpakstan, Navoi and on to the Kazakh border, forms part of Uzbekistan’s wider programme to modernise its transport network and boost freight volumes. With projected investment costs of UZS 6 278 billion (USD 599 million), the project aims to expand road capacity, cut vehicle operating costs, reduce travel times, and strengthen both domestic and regional connectivity, thereby supporting trade and economic growth.
Under SIPA, the SAVi methodology was applied to assess the project’s broader economic, social and environmental impacts. While a conventional benefit-cost ratio (BCR) was just 0.18, suggesting the highway would not be viable by narrow financial standards, the sustainable BCR (S-BCR) ranged from 1.38 to 1.95, depending on assumptions related to the avoided costs of car accidents. This demonstrates that conventional appraisal methods systematically undervalue projects where safety improvements and other avoided costs constitute a large share of total benefits. This reflects cumulative discounted net benefits of UZS 2.4-5.9 trillion (USD 230-567 million) over 30 years, demonstrating that once avoided costs and wider societal gains are factored in, the project could deliver strong net value in terms of safety, efficiency and regional development.
Values of benefit-cost ratio (BCR)
Source: (IISD, 2024[47]).
4.2.5. Mainstreaming resilience into infrastructure development
In Uzbekistan, the impacts of climate change are becoming evident with unprecedented speed and intensity, posing a significant challenge to sustainable development. Uzbekistan’s extreme vulnerability to drought, particularly in arid regions such as Karakalpakstan, Bukhara and Khorezm, underscores the urgency of placing adaptation and resilience at the core of strategic planning under uncertainty. The country faces some of the highest climate and disaster risks in Central Asia, with recurrent exposure to flooding, drought, extreme heat, earthquakes and landslides. Each year, natural disasters affect around 1.4 million people and cause economic losses equivalent to about 5% of GDP (World Bank, 2024[4]).
Climate risks are already undermining critical infrastructure systems. Rising temperatures, projected to increase by up to 2.5°C by mid-century, are accelerating degradation of asphalt roads, rail lines, and energy grids. The combined impacts of heat damage, freeze-thaw cycles, and erosion have created a USD 1 billion annual road-maintenance backlog, with adaptation needs in the transport sector alone potentially reaching USD 60 billion by 2050. In cities such as Tashkent and Samarkand, rapid urbanisation and poor drainage have heightened flood risks, while ageing wastewater and water supply networks are increasingly unable to cope with more intense rainfall and heat stress. These vulnerabilities are compounded by insufficient resilience standards in public construction, leaving key assets at risk of climate-related damage (World Bank, 2024[4]).
The government’s efforts to develop a National Adaptation Plan (NAP), with support from the Green Climate Fund, mark an important step toward integrating climate resilience into national and regional development planning. This process, focused on priority sectors such as agriculture, water, health, housing and emergency management, can serve as a critical foundation for long-term strategic foresight processes (UNDP, 2024[48]). To build on this experience, Uzbekistan could look to the recent experiences of Indonesia and the Philippines under SIPA, summarised in Box 4.7, for ways to continue mainstreaming climate resilience into infrastructure planning and evaluation.
Mainstreaming climate resilience into infrastructure planning is essential to protect long-lived assets, avoid costly disruptions, and ensure sustainable development. However, many countries still lack the institutional frameworks, planning tools, and technical capacity needed to systematically address climate risks across infrastructure lifecycles.
OECD analyses in Indonesia and the Philippines, conducted under SIPA, highlight that while climate risks are growing, resilience remains weakly integrated into project planning, appraisal and investment decisions. Co-ordination across institutions is limited, the use of climate risk data is inconsistent and nature-based solutions remain underutilised.
To address these gaps, governments could consider the following policy directions:
Develop and apply resilience standards and certification for infrastructure planning and investment.
Embed climate risk criteria into project appraisal and approval processes.
Strengthen cross-ministerial co-ordination and integrate resilience into national development and infrastructure strategies.
Scale up the use of nature-based solutions, particularly in vulnerable urban, coastal and river basin areas.
Build capacity for strategic foresight and risk-informed planning through training, tools and pilot applications.
By embedding resilience into infrastructure governance and decision-making, countries can better safeguard infrastructure systems against a changing climate while maximising long-term value for people and the environment.
Source: (OECD, 2024[49]; OECD, 2024[50]).
4.2.6. Mainstreaming gender in national strategic planning frameworks
Gender equality is an essential dimension of sustainable infrastructure development in Uzbekistan. Infrastructure shapes access to energy, transport, water and digital connectivity, and influences outcomes in health, education, employment and safety. Better integrating gender considerations into infrastructure policy would help Uzbekistan address persistent gender gaps, including women’s lower participation in the national economy, which has detrimental consequences on inclusiveness and prospects for economic growth (World Bank, 2024[51]).
Uzbekistan has established a strong legal foundation for gender equality through measures such as the Law on Guarantees of Equal Rights and Opportunities for Men and Women (Government of Uzbekistan, 2019[52]) and the Strategy for Achieving Gender Equality in the Republic of Uzbekistan until 2030 (Government of Uzbekistan, 2021[53]). However, these commitments are not yet systematically integrated into the country’s sustainable infrastructure, climate and investment frameworks. While high-level strategies such as Uzbekistan-2030 (Government of Uzbekistan, 2023[32]) emphasise infrastructure as central to national development and include broader commitments to women’s empowerment, including the goal of raising women’s representation in leadership roles to 30%, they contain few explicit or measurable gender-related objectives for infrastructure sectors such as transport, energy and water. This policy disconnect limits the integration of gender perspectives into programmes such as the 2023-2025 National Investment Programme and may undermine the inclusiveness and resilience of green transition efforts. Addressing this gap will require embedding gender criteria directly into infrastructure planning, budgeting, appraisal and evaluation; introducing sector-specific gender targets in revised national strategies; ensuring future NDCs and Green Economy Strategy updates account for differentiated climate impacts on women and men; and strengthening the mandates of the State Committee for Women and Family Affairs and ministry-level gender equality councils to support oversight, accountability and gender-responsive project appraisal.3
Evaluation systems currently do not capture gendered outcomes. National investment programmes, including the 2023-2025 Investment Programme, use standard cost-benefit analyses that rarely assess differentiated impacts on women and men. Data on access to services, employment created or time savings by gender is not systematically collected, making it difficult to judge whether projects advance inclusion. Moreover, independent evaluations often rely on donor-driven methodologies rather than national standards, resulting in fragmented practices and limited comparability across sectors. Integrating gender-specific indicators into cost–benefit analysis and requiring sex-disaggregated data in monitoring systems would provide a clearer picture of the distributional impacts of infrastructure.4
Stronger accountability mechanisms are needed to embed gender in appraisal and oversight. Current institutional mandates, such as those of the State Committee for Women and Family Affairs, are too limited to ensure gender-responsive evaluation across powerful line ministries. Gender Equality Councils exist but lack authority to influence appraisal criteria, procurement guidelines, or post-project audits. To bridge this gap, Uzbekistan could institutionalise gender audits, require gender impact assessments as part of project evaluation, and make reporting on gendered infrastructure outcomes mandatory in the Oliy Majlis, Uzbekistan’s parliament, and State Programme reviews. These steps would not only improve accountability but also help steer investment toward infrastructure that is both sustainable and inclusive.5
While Uzbekistan has established an increasingly robust national framework for sustainable infrastructure planning, sector-specific policies and regulations will determine whether its transition to a low-carbon, resilient economy can be achieved. These frameworks set the rules that shape investor decisions, establish incentives for clean technologies and define the conditions under which viable low-carbon business models can emerge. Ensuring that sectoral frameworks are fully aligned with national sustainability objectives is essential for turning long-term climate and development goals into practical outcomes across the economy.
Integrating sustainability into sectoral frameworks for energy, transport, and industry is critical to achieving this shift. Sustainable infrastructure can unlock green finance, attract foreign investment and deliver long-term economic and social benefits, but only if underpinned by coherent regulations and decarbonisation plans. Uzbekistan faces pressing infrastructure needs making it vital that new investments are compatible with climate and environmental goals. This section examines the enabling conditions for sustainable energy, transport and industrial infrastructure, focusing on sectoral governance, financial frameworks and the integration of climate and environmental criteria.
Uzbekistan has made significant progress in strengthening sectoral frameworks for sustainable infrastructure. The government has set ambitious targets to expand renewable capacity, electrify transport and improve energy efficiency across industries. Reforms in tariffs and fossil-fuel subsidies are advancing market-based energy pricing, while public-private partnerships are rapidly scaling in the energy and transport sectors. Adoption of the Law on Renewable Energy, growing green bond activity, and the integration of sustainability objectives into the Uzbekistan-2030 Strategy all underscore the country’s commitment to a low-carbon transition and more resilient infrastructure systems. To continue building on this progress, Uzbekistan should:
Align sectoral frameworks with national climate goals. As a first step, codify clear decarbonisation targets for the energy, transport and industry sectors within existing strategies, ensuring consistency between the NDC, the forthcoming LT-LEDS and sectoral investment plans.
Advance fossil-fuel subsidy reform based on existing evidence. Build on the IISD-led fossil-fuel subsidy inventory, which identified significant fiscal inefficiencies and social impacts, to design a phased reform plan combining gradual tariff adjustments with targeted social protection and reallocation of savings to clean energy and efficiency programmes.
Strengthen regulatory and policy frameworks to modernise the power system. Develop clear grid connection rules, renewable dispatch and storage standards, and incentive mechanisms for utilities to reduce losses and integrate variable renewables, drawing on recommendations from the OECD Roadmap for Sustainable Investment Policy Reforms in Uzbekistan chapter on green investment (OECD/ADB, 2025[40]).
Improve framework conditions to stimulate investments in the low-carbon technologies needed to tackle hard-to-abate emissions from energy-intensive industries, building on the experience of the UKS-ACWA renewable hydrogen project currently under development.
Accelerate sustainable transport policy alignment. Define sector-specific GHG reduction targets and develop policies to promote modal shift to rail, vehicle efficiency standards and integrated multimodal corridors, ensuring transport development supports Uzbekistan’s 2030 climate and regional connectivity goals.
4.3.1. Framework conditions for sustainable energy infrastructure development
Uzbekistan possesses vast renewable energy potential that could transform its power system and underpin a more sustainable growth model. Abundant solar resources and significant wind corridors provide opportunities far exceeding current electricity consumption, while hydropower and biomass offer complementary contributions. Harnessing this potential is central to the government’s strategy to diversify the energy mix, reduce reliance on natural gas, and meet its commitments to cut emissions intensity by 35% by 2030 and achieve carbon neutrality by 2060.
Uzbekistan’s solar energy potential far exceeds its current levels of electricity demand. Average solar irradiance ranges from 1 600 to 2 000 kWh/m² per year, and technical solar potential is estimated at over 2 000 TWh annually, compared to the country’s current electricity consumption of roughly 74 TWh in 2021 (IEA, 2022[54]). Central and southern Uzbekistan have the highest potential, near major population centres like Samarkand and Bukhara (World Bank/Global Solar Atlas, 2023[55]). Installed solar capacity, while still small compared to Uzbekistan’s fossil fuel-fired capacity, has expanded rapidly from under 0.5 GW in 2023 to 2.3 GW in 2024 (IRENA, 2025[56]), but much of the country’s potential remains untapped.
Wind energy also offers significant untapped potential to diversify Uzbekistan’s power mix. According to IRENA and the World Bank, the country’s theoretical wind potential exceeds 520 GW, with the highest potential concentrated in Karakalpakstan, Navoi and Bukhara regions (Expo2025, 2025[57]). To date, only pilot projects and feasibility studies have been completed, but several large-scale wind farms are advancing through international partnerships. The most prominent is the 500 MW Zarafshan project in Navoi expected to be the country’s first utility-scale wind farm (Expo2025, 2025[57]), while further projects are in the pipeline to achieve the government’s target of 3 GW of wind capacity by 2030.
Hydropower has long been a modest but non-negligeable part of Uzbekistan’s power mix, accounting for the majority of renewable-generated power to date. Currently, the country has approximately 2.4 GW of installed hydropower capacity (UzStat, 2025[58]) and plans to construct an additional 500 MW of capacity under its current Investment Programme. However, with an estimated potential of 7.5 GW (ADB, 2019[59]), further development of hydropower in Uzbekistan could be considered. Given Uzbekistan’s water stress and competing demands on limited water resources, additional capacity development must be accompanied by strict environmental oversight.
Modernising Uzbekistan’s electricity grid is a critical prerequisite for integrating variable renewable energy at scale. The country’s transmission and distribution networks are heavily reliant on ageing Soviet-era infrastructure, with over 60% of assets have been in operation for over 30 years and, as a result, distribution losses exceed 12% (World Bank, 2023[6]). As large-scale solar and wind projects come online, balancing intermittent generation will require grid reinforcement, advanced dispatch systems and investments in digital monitoring technologies. The government’s 2030 energy strategy includes measures to reduce technical losses and expand cross-border interconnections. Without comprehensive grid upgrades, however, the rapid expansion of renewables risks being constrained by inefficiencies and reliability concerns.
In addition to physical infrastructure constraints, fossil fuel subsidies remain a barrier to renewable energy development at scale. These subsidies, provided through below-cost pricing, direct budget transfers, tax exemptions and state guarantees, undermine the financial sustainability of the energy sector while distorting investment signals. In 2022 alone, total subsidies for fossil fuel consumption and production were estimated at over UZS 250 trillion, a six-fold increase from 2020, driven primarily by consumer price support for natural gas and electricity. Major recipients included UzGasTrade, the state gas trading company, reflecting the gap between international and regulated domestic prices. These subsidies divert scarce public resources away from urgently needed infrastructure upgrades, particularly in energy efficiency, renewables and basic public services. In addition, fossil-fuel subsidies reduce the attractiveness and competitiveness of renewable energy sources (IISD, forthcoming[60]).
The reform of fossil fuel subsidies is not only fiscally prudent but also central to achieving Uzbekistan’s green economy objectives and climate targets. Artificially low energy prices reduce incentives to invest in modern, efficient infrastructure and constrain the operational viability of energy utilities. At the same time, they exacerbate environmental degradation, air pollution, and greenhouse gas emissions. Phasing out subsidies in a well-sequenced and socially sensitive manner can unlock public funds for social protection for vulnerable users, sustainable infrastructure investment, emissions reductions, and the creation of conditions conducive to a cleaner, more reliable energy system (IISD, forthcoming[60]).
Encouragingly, Uzbekistan has taken recent steps to address these challenges. In 2023-2025, the government initiated long-postponed tariff reforms, significantly raising gas and electricity prices for businesses and households. A roadmap has been adopted to achieve full cost recovery in the electricity and gas sectors by 2028, supported by social protection measures and the introduction of lifeline tariffs. These reforms represent an important political and economic commitment and signal readiness to move towards market-based energy pricing. However, sustained momentum and careful implementation will be essential to ensure a just transition (IISD, forthcoming[60]).
To advance further, Uzbekistan should consider redirecting revenues toward improving the efficiency and resilience of energy, water, transport and urban infrastructure systems, especially in underserved regions. It should also strengthen regulatory frameworks and improve the financial performance of state-owned utilities to attract private and international investment into low-carbon infrastructure. These efforts will also enhance the credibility of Uzbekistan’s climate strategy and its eligibility for green finance, including through mechanisms such as carbon markets and sustainable development bonds.
Ultimately, fossil fuel subsidy reform should be seen not as an isolated fiscal adjustment but as a strategic enabler of sustainable infrastructure development. By aligning energy pricing with environmental, economic and social priorities, Uzbekistan can create the budgetary space and policy coherence needed to deliver long-term infrastructure investments that are financially viable, socially inclusive and environmentally sustainable.
4.3.2. Framework conditions for sustainable transport infrastructure development
Transport infrastructure plays a critical role in advancing Uzbekistan’s climate goals, regional integration and economic diversification. As in other Central Asian economies, a large share of planned infrastructure investment is directed toward improving domestic and regional connectivity through road, rail and logistics corridors. The government’s connectivity agenda – anchored in the Uzbekistan-2030 Strategy and the 2023–2025 Investment Programme – seeks to transform the country into a key regional transit hub. However, while sustainability is increasingly embedded in the energy sector, transport policies and projects have yet to fully integrate climate and environmental considerations, even though transport already accounts for around 8.6% of national GHG emissions and this share is projected to rise (Figure 4.7). A massive expansion of the road infrastructure capacity of nearly 500% by 2030 and over 1 300% by 2050 to meet projected freight traffic suggests transport’s role in Uzbekistan’s GHG profile will continue to grow (ITF, 2019[61]).
As a landlocked nation with increasing trade flows and significant infrastructure demands, it is essential that Uzbekistan align its transport infrastructure with long-term climate and development objectives. Sustainable transport, both in freight and passenger, is a key opportunity to reduce GHG emissions, lower energy dependence and strengthen resilience against climate-related disruptions. To seize this opportunity, Uzbekistan must undertake comprehensive, cross-cutting reforms that integrate transport development with emission reductions and economic competitiveness. Yet unlike in the energy sector, where sustainability is increasingly embedded into investment planning, progress in transport has lagged, even though the sector’s share of emissions is already significant and projected to rise further. Uzbekistan’s 2030 Strategy and the Strategy for the Development of the Transport System until 2035 set ambitious goals to cut rail transport times by 40%, electrify 65% of the rail network, and construct 56 000 km of new roads, while also quadrupling the number of flights, underscoring the scale of investment needs (Republic of Uzbekistan, 2023[62]).
Total GHG emissions in kilotonne (kt) CO2 equivalent from transport by year and sub-subsector, 1990 to 2022
Improving transport infrastructure is essential to sustaining productivity gains and expanding trade. Uzbekistan has the largest road network in Central Asia and the second largest rail network, yet the quality of infrastructure remains uneven. Around 5.8 million people lack year-round road access (ADB, 2023[63]), and the country ranks 89th in the 2023 World Bank Logistics Performance Index (World Bank, 2023[64]). Transport costs in Uzbekistan are among the highest in the region, a result of the country’s double-landlocked position, chronic underinvestment in maintenance and inefficiencies across logistics chain (World Bank, 2020[65]). More than 90% of cargo is still transported by road, reflecting both the flexibility of trucking and the limited competitiveness of the rail system, which struggles with ageing wagons, fragmented standards across borders and deferred maintenance (OECD, 2025[66]).
Uzbekistan has a comprehensive policy framework with 26 documents focused on transport infrastructure, of which 4 are climate-specific documents and a further 20 have integrated climate mitigation and/or adaptation measures (Asian Transport Outlook, 2024[67]). While the NDC 2.0 includes a long-term national GHG emission target, there is no net-zero or specific climate target for the transport sector. The NDC 2.0 mentions transport-related items such as e-mobility, alternative fuels and renewables, but it lacks a clear alignment with sectoral transport policies. Only 9% of existing transport-related climate measures originate from the NDCs, highlighting a disconnect between national climate ambitions and implementation at the sector level (Asian Transport Outlook, 2024[67]). To decarbonise the transport sector, Uzbekistan should set ambitious GHG emission reduction targets for the transport sector and develop a clear and comprehensive long-term strategy to decarbonise the transport sector (Asian Transport Outlook, 2024[67]). Given the heavy reliance on roads and the projected growth of freight, electrification of priority rail links such as the China–Kyrgyzstan–Uzbekistan railway, the Pap–Namangan–Andijan line, and the Bukhara–Miskin corridor will be essential to reducing emissions intensity and improving regional connectivity (OECD, 2025[66]).
Freight transport represents both a major opportunity and a major vulnerability for Uzbekistan’s economic model. As a landlocked country with ambitions to become a regional trade and transit hub, the projected expansion of freight flows could drive economic diversification, but only if supported by modern, low-carbon infrastructure. Through its policy documents, the government has prioritised the modernisation and expansion of Uzbekistan’s road and rail system, but the current state of the national transport system poses a significant challenge. For instance, deferred road maintenance already amounts to USD 1 billion annually, undermining competitiveness and increasing transport costs (World Bank, 2024[4]). At the same time, climate risks are already impacting road performance, with rising temperatures, freeze–thaw cycles and water runoff creating costly vulnerabilities that could require up to USD 60 billion in adaptation investments by mid-century (OECD, 2025[66]).
To improve freight competitiveness, the Government of Uzbekistan has prioritised large-scale upgrades of its transport corridors under the 2023-2025 Investment Programme and Uzbekistan-2030 Strategy, including expansion of highways, modernisation of rail links and the development of international logistics centres. These plans are being supported by growing use of PPPs in the road sector, including toll highways such as the Tashkent–Samarkand and Samarkand–Bukhara routes, as well as the Takhtakaracha tunnel (OECD, 2025[66]). Under SIPA, the International Transport Forum (ITF) assessed freight transport in Central Asia and highlighted specific measures for Uzbekistan to strengthen connectivity, resilience and sustainability (Box 4.9).
Uzbekistan plays a central role in Central Asia’s regional connectivity agenda, serving as a key transit corridor between China, Europe and South Asia. Rapid growth in trade volumes and new infrastructure projects offer major opportunities to strengthen regional integration and competitiveness. However, Uzbekistan’s freight system remains heavily road-dependent, energy-intensive and vulnerable to climate and infrastructure shocks. Modernising freight transport will therefore be essential for reducing logistics costs, cutting emissions and enhancing long-term resilience.
A more integrated approach can unlock synergies across connectivity, sustainability and resilience, by combining corridor expansion with rail electrification, digital logistics, modal shift and stronger climate risk management (see section 1.4.2). Modelling shows that scenarios combining connectivity and decarbonisation outperforms both the connectivity-only scenario and the disrupted business-as-usual scenario in Uzbekistan. Disruption costs under the combined scenario amount to USD 69 per tonne, compared with USD 90 under the connectivity-only scenario and USD 78 under the disrupted business-as-usual scenario. This suggests that combining connectivity upgrades with efficiency measures, such as high-capacity vehicles, digital co-ordination, and reduced border delays, can make the system more resilient by creating more flexible routing options and lower-cost alternatives during disruptions.
To achieve these goals, the report identifies several priority policy measures for Uzbekistan:
Promote cleaner and more efficient freight transport by enforcing fuel efficiency standards, rolling out Euro-5/6 norms, and incentivising the adoption of CNG and electric vehicles.
Develop sustainable multimodal corridors that integrate rail and road links with green infrastructure, while embedding climate risk and sustainability criteria into national transport plans.
Strengthen resilience and reliability through targeted upgrades of roads and rail, improved maintenance systems, and enhanced disaster preparedness at key logistics hubs.
Shift to low-cost, low-carbon modes by prioritising rail expansion and electrification, reducing reliance on road freight, and improving intermodal connectivity via integrated logistics centres.
Harness digitalisation and regional integration by advancing customs automation, digital freight planning and e-commerce logistics, while positioning Uzbekistan as a regional hub linking China, Europe and South Asia.
Source: (ITF, 2025[68]).
Using appraisal methodologies that integrate environmental and social costs could help Uzbekistan’s freight network become more sustainable. Under SIPA, the International Institute for Sustainable Development (IISD) applied the Sustainable Asset Valuation (SAVi) methodology to the Uchkuduk-Kazakhstan Border Highway – a key link in Uzbekistan’s west-north transport corridor – to test how broader sustainability factors affect investment outcomes. The analysis found that a conventional cost–benefit assessment would have deemed the project non-viable, with a benefit-cost ratio (BCR) of just 0.18. When additional economic, social and environmental added benefits and avoided costs such as improved road safety, reduced emissions, and time savings were included, the sustainable BCR rose sharply to between 1.38 and 1.95, with net benefits estimated at USD 230–567 million over 30 years (IISD, 2023[69]).
The SAVi assessment highlights the importance of integrating sustainability early in project design and appraisal. It showed that factoring in avoided car accident costs, lower vehicle emissions and regional development benefits can fundamentally alter investment decisions. Such integration can help policymakers prioritise projects that deliver long-term economic, social and environmental returns. The exercise also revealed areas for improvement, notably data gaps and limited co-ordination between transport and environmental authorities, which currently constrain the systematic use of such tools. Embedding sustainability-based valuation methods like SAVi into Uzbekistan’s transport planning framework could therefore enable more climate-aligned investment, ensure freight expansion supports trade competitiveness, and reinforce national decarbonisation objectives (IISD, 2023[70]).
Urban transport infrastructure also faces mounting pressure, with congestion, air pollution, and service gaps threatening sustainable growth. Vehicle ownership is rising quickly in Tashkent and other major cities, worsening congestion and increasing dependence on fossil fuels. At the same time, access to reliable public transport remains uneven, particularly in peripheral areas. While government strategies reference e-mobility, alternative fuels and smart city concepts, these measures remain fragmented and lack binding sectoral emission reduction targets. The absence of a comprehensive sustainable urban mobility strategy risks locking in high-emission, inefficient systems and missing opportunities to improve quality of life in urban centres. In an effort to address gaps in urban transport frameworks, the International Transport Forum carried out a 2023 study under SIPA to provide a roadmap for the decarbonisation of public urban passenger transport systems in Tashkent (Box 4.10).
Urban transport is a critical pillar of Uzbekistan’s decarbonisation agenda, particularly in fast-growing cities such as Tashkent. Rising demand for travel, coupled with outdated and fragmented infrastructure, risks locking in higher per capita GHG emissions, given the dominance of private vehicles and other high-emission modes. Despite policy gaps, urban areas also present significant opportunities to deliver integrated and scalable solutions that advance both mitigation and adaptation. To support this agenda, the ITF, under SIPA, conducted a study with Uzbek partners on decarbonisation pathways for urban mobility.
While current policies, focused mainly on strengthening public transport, help slow the emissions trajectory, they are insufficient to achieve Tashkent’s climate targets. Under current policies, CO₂ emissions would fall by 24% by 2050 compared to a baseline, but the share of sustainable modes would only rise to 59%. By contrast, a climate ambition scenario combining cleaner vehicles, shared and active mobility, and integrated land-use planning would cut emissions by 68% and raise the share of sustainable modes to 87%, while also delivering co-benefits such as reduced congestion, improved safety, health gains and stronger economic activity.
Achieving this transformation requires governance and financing reforms as well as inclusive mobility strategies. Key priorities include establishing a Metropolitan Transport Authority, adopting a Sustainable Urban Mobility Plan, and modernising procurement and fare structures. Public transport should be restructured into a hierarchical, intermodal network, with informal services integrated to boost supply and connectivity. At the same time, inclusive mobility can be advanced through taxi market reform, regulated private mobility, and promotion of micromobility, shared modes, and digital tools for seamless travel.
Note: Sustainable modes of transport include walking, cycling, public transport and shared mobility.
Source: (ITF, 2023[71]).
Overall, Uzbekistan’s connectivity ambitions could deliver major economic and regional gains, but without systematic integration of sustainability criteria, the rapid expansion of road and logistics infrastructure risks locking in high-carbon pathways. Strengthening the policy and regulatory framework for low-emission transport, similar to recent progress in the energy sector, will be essential to align the transport agenda with national decarbonisation goals.
4.3.3. Framework conditions for sustainable industrial infrastructure development
Decarbonising “hard-to-abate” sectors is essential to enable Uzbekistan’s industrial development while ensuring alignment with its climate ambitions. Although the power generation dominates national emissions, the chemicals, steel and heavy industries sectors are major end-users of energy and therefore critical for achieving long-term decarbonisation. Projections by the World Bank indicate that hard-to-abate sectors are likely to rely on carbon removal technologies to achieve decarbonisation even in 2060, and therefore green hydrogen (i.e., hydrogen produced using renewable energy sources) is emerging as a potential solution in this context, particularly for substituting fossil fuels as feedstock and heat in these sectors (World Bank, 2022[72]). Even though industrial exports’ exposure to the European Union’s Carbon Border Adjustment Mechanism (CBAM) in the short-term is limited (Maliszewska et al., 2025[73]), Uzbekistan’s policymakers are anticipating a need to adjust to its requirements as they hope to expand trade co-operation with the EU.
Chemical industries, especially methanol and ammonia production, offer near-term opportunities for hydrogen-based decarbonisation. Demand for green hydrogen in Uzbekistan is projected to expand rapidly in these sectors, driven by the replacement of fossil-based feedstocks with renewable hydrogen. Methanol production alone could require around 200 kt of hydrogen annually by 2030—assuming an initial 10–15 % substitution of conventional hydrogen—and up to 760 kt by 2050 as green methanol technologies become commercially viable (World Bank, 2022[72]). Similarly, ammonia production is expected to shift progressively from natural gas-based hydrogen to low-carbon alternatives, reaching a 25% share by 2030 and 75% by 2050. This implies an increase in hydrogen demand from approximately 80 kt to 371 kt per year over the same period, under a moderate transition scenario that assumes declining electrolyser costs and increased renewable electricity availability (World Bank, 2022[72]).
The steel sector also presents strong decarbonisation potential through green hydrogen-enabled technologies. Projections indicate that low-carbon crude steel produced using direct reduced iron (DRI) processes with electric arc furnaces (EAF) powered by renewable electricity and green hydrogen instead of coal or natural gas could account for 25% of production in 2030 and 75% by 2050, These shares represent scenario-based estimates of technology adoption under Uzbekistan’s net-zero-aligned industrial transition, assuming a phased build-out of renewable capacity and gradual cost competitiveness of hydrogen-based DRI (World Bank, 2022[72]).
Uzbekistan is home to the first renewable hydrogen project having reached the stage of Final Investment Decision (FID) in Central Asia. The project is a joint venture between Uzbekistan’s state-owned chemical company Uzkimyosanoat (UKS) and Saudi Arabia’s ACWA Power, and it is backed by financing from several international financial institutions, including the EBRD. The project structure is currently unique in the region: ACWA Power has secured a power purchase agreement (PPA) with the national grid to supply renewable energy and a hydrogen purchase agreement (HPA) with UKS for green hydrogen delivery. This green hydrogen will be used as a substitute to grey hydrogen in UKS’s ammonia production process, enabling the production of approximately 3 000 tonnes of green ammonia. UKS intends to export this green ammonia to the European Union, leveraging emerging low-carbon market opportunities created by the EU’s CBAM.
To build on this experience and accelerate the decarbonisation of domestic hard-to-abate industrial sectors, the policy and regulatory framework must be strengthened. Clear government strategies for industry decarbonisation are needed to support the development of low-carbon innovations such as hydrogen, including targeted technology adoption plans, regulatory incentives and practical enforcement mechanisms (World Bank, 2022[72]). Directing firm-level investment into low-carbon technologies also requires strong and consistent policy signals to demonstrate that solutions such as green hydrogen are part of the government’s strategic vision for industrial competitiveness. National strategic documents, clear investment frameworks and co-ordination across ministries can help align public and private efforts in advancing these technologies (OECD/ADB, 2025[40]).
Equally important are enabling conditions for investment. Uzbekistan will need to clarify the scope of fiscal incentives for low-carbon projects and shift from broad tax breaks toward expenditure-based incentives that lower costs and risks for early investors. De-risking measures such as predictable off-take agreements, purchase obligations and credit guarantees can also improve the bankability of projects, while effective carbon pricing would help raise the cost of carbon-intensive alternatives and increase the attractiveness of low-carbon industrial investment (OECD/ADB, 2025[40]).
Framework conditions extend beyond finance: secure land access, efficient permitting, and alignment with international certification standards will be critical for scaling hydrogen and related decarbonisation projects. Strengthening technical capacities within industry, expanding applied research, and leveraging institutions such as the National Scientific Research Institute for Renewable Energy Sources can ensure that firms have the knowledge to adopt hydrogen-enabled technologies (OECD/ADB, 2025[40]).
Mobilising private sector financing is critical for closing Uzbekistan’s infrastructure investment gap while ensuring alignment with the country’s sustainability and climate objectives. As private sector participation expands, it is increasingly important to guarantee that investments deliver positive environmental and social outcomes alongside economic growth.
Uzbekistan has taken major steps to build an enabling environment for sustainable and green finance. The adoption of the national green taxonomy, rapid growth in green and sustainability bond issuance, and reforms to capital market and privatisation frameworks have strengthened investor confidence and expanded access to climate-aligned financing. State-owned banks are beginning to integrate green lending instruments, while new blended-finance and de-risking partnerships with international institutions are helping crowd in private capital for renewable energy and infrastructure. These advances position Uzbekistan as an emerging leader in sustainable finance in Central Asia. To continue building on this progress, Uzbekistan should:
Strengthen the green taxonomy. Harmonise the taxonomy with sectoral strategies and procurement rules; reinforce monitoring, reporting and verification (MRV) requirements; and embed it in national financing frameworks to guide sustainable investment.
Deepen and diversify sustainable finance instruments. Expand the issuance of sovereign and corporate green bonds, enable municipal debt under strict fiscal oversight, and establish the legal framework for green sukuks and other Shariah-compliant products to tap wider pools of capital.
Strengthen capital market governance and privatisation frameworks. Adopt a consolidated capital markets law, integrate exchange platforms, and improve transparency in SOE and bank privatisation to reduce barriers, enhance liquidity and attract sustainable private investment.
Scale up demand-side policies and de-risking tools. Introduce mandatory disclosure and green public procurement to create market pull, while expanding blended finance, credit guarantees and risk-sharing instruments with international partners to lower investment risks.
Mainstream Responsible Business Conduct (RBC) in infrastructure. Finalise and implement the NAP on Business and Human Rights, embed RBC standards into PPP and procurement frameworks, strengthen labour inspection and gender safeguards, and enhance stakeholder participation to ensure social and environmental integrity of projects.
4.4.1. Green taxonomies
Green taxonomies are a critical tool for aligning financial flows with sustainability and climate goals. By providing a transparent and credible classification system, they help reduce greenwashing, improve the integrity of sustainability claims, and guide both public and private investors toward projects that deliver genuine environmental benefits. Taxonomies also create a stronger enabling environment for financial institutions to integrate environmental, social and governance (ESG) criteria into their lending and investment practices, while supporting the growth of green bonds, sustainable investment funds and other climate finance instruments. In doing so, they help countries attract international investment by demonstrating consistency with global standards and frameworks, strengthening confidence among domestic and foreign investors alike.
The adoption of Uzbekistan’s Green Taxonomy in December 2023 is an important milestone in the government’s efforts to direct capital flows toward sustainable infrastructure and the green economy. Its design closely aligns with recommendations set out in guidance provided by the World Bank, which highlighted the importance of anchoring the taxonomy in international best practice (including the EU Taxonomy and the Common Ground Taxonomy), tailoring categories to national development priorities, and ensuring inter-agency co-ordination in its development (World Bank, 2023[74]). These elements were integrated into Uzbekistan’s taxonomy: it adopts a structure based on six environmental objectives—climate change mitigation, climate change adaptation, sustainable use of resources, pollution prevention, protection of ecosystems, and circular economy—while also prioritising sectors with high domestic relevance, such as renewable power generation and water management (Government of Uzbekistan, 2023[75]). The process was overseen by the Ministry of Economy and Finance in collaboration with the Central Bank, as recommended by the World Bank, strengthening institutional ownership.
Future iterations of the taxonomy would benefit integrating unaddressed recommendations in the World Bank’s guidance. For example, the World Bank emphasised the need for strong monitoring, reporting, and verification (MRV) requirements to ensure the environmental integrity of financed projects (World Bank, 2023[74]), yet Uzbekistan’s taxonomy is voluntary in most cases (except for state-supported investments, for which it is mandatory) does not currently include binding MRV provisions or technical screening criteria at the project level (Government of Uzbekistan, 2023[75]). Similarly, while the guidance stressed the importance of harmonising the taxonomy with sustainable finance roadmaps, public procurement rules and concessional lending frameworks (World Bank, 2023[74]), Uzbekistan’s taxonomy has so far been introduced mainly as a standalone reference tool (Government of Uzbekistan, 2023[75]). This limits its immediate applicability in public investment planning or private lending decisions and risks slowing uptake by financial institutions.
To build on this foundation, Uzbekistan should focus on strengthening regulatory integration, capacity building and operational guidance. As the World Bank guidance suggested, incorporating taxonomy criteria into green public procurement, state investment programmes, and the appraisal of public–private partnerships (PPPs) would help anchor sustainability in infrastructure planning. Financial institutions will require training and technical assistance to apply taxonomy criteria consistently in portfolio management, while regulators may need to introduce incentives or disclosure requirements to encourage adoption (World Bank, 2023[74]). Uzbekistan could also consider developing complementary instruments, such as an SDG finance taxonomy for private lenders, similar to Mongolia, to broaden market alignment with sustainability goals.
Ensuring coherence across frameworks and sectors will be essential for maximising the taxonomy’s impact on sustainable infrastructure. Without clear links to sectoral investment pipelines and climate commitments, there is a risk of fragmentation and inconsistent application. Uzbekistan now has an opportunity to finalise a harmonised approach, backed by regulatory guidance and measurable targets, to ensure the taxonomy becomes an effective tool for scaling up sustainable finance. By embedding it into national financing strategies, public procurement and concessional lending programmes, the taxonomy could play a central role in aligning Uzbekistan’s infrastructure investment with its 2030 sustainability goals and 2060 carbon-neutrality objective.
4.4.2. Sustainable and green finance instruments
Mobilising financing for Uzbekistan’s infrastructure and development priorities while aligning with its sustainability objectives will require diversifying financing sources and leveraging private capital. Green and sustainable finance instruments such as green bonds, sustainability bonds, and potentially sukuks (Shariah-compliant bond-like debt instruments) can significantly improve access to capital for projects in clean energy, sustainable transport and low-carbon infrastructure. To achieve this, Uzbekistan must not only align infrastructure planning with green criteria but also continue strengthening its regulatory framework and build institutional capacity to expand the use of the capital market financial instruments. Recent financial sector reforms further reinforce this trajectory. Uzbekistan has announced plans to establish an international financial centre to strengthen its position as a regional hub for investment and capital markets, alongside broader efforts to attract up to USD 50 billion in investment through financial liberalisation and institutional reforms (President of the Republic of Uzbekistan, 2026[76]; The Times of Central Asia, 2026[77]). In parallel, the government has signalled renewed commitment to developing Islamic finance, including the introduction of Shariah-compliant instruments and regulatory frameworks, which could play a key role in mobilising additional pools of capital for sustainable infrastructure, particularly through instruments such as green sukuks. From the perspective of financiers, green bonds offer a natural match for infrastructure projects with high upfront capital costs and stable, long-term returns. Large-scale wind and solar power projects already underway in Uzbekistan, including those developed with foreign partners such as ACWA Power and Masdar, could be refinanced through green bonds to lower financing costs and free up resources for new investments (OECD, 2023[78]).
Uzbekistan has witnessed a remarkable acceleration in green bond activity in recent years, transitioning from its early thematic issuances into a more structured and impactful engagement with sustainable finance. Uzbekistan’s initial foray into thematic bonds began in 2019 and accelerated with the sovereign SDG (sustainability) bond in 2021, followed by the country’s first sovereign green bond and the inaugural corporate green bond issued by SanoatQurilishBank (SQB) in August 2023 (OECD, 2023[78]). This wave of issuances was further bolstered by growing investor confidence: the 2023 sovereign green Eurobond drew participation from over 30 international investors across regions, underscoring global appetite for Uzbekistan’s sustainable transition (UNDP, 2024[79]). In the corporate sphere, Uzbekistan’s Mortgage Refinancing Company launched the country’s first domestic green corporate bond, aligned with newly established green bond standards, signalling growing maturity of the domestic green market (AIFC, 2024[80]). Most recently, in July 2024, SQB issued a verified sustainability bond (USD 400 million and UZS 2.25 trillion) on the London Stock Exchange with technical assistance from GGGI. By mid‑2025, its allocation report highlighted tangible impacts, including over 121 GWh in energy savings and 16 kt of CO2 reductions (GGGI, 2025[81]). Together, these developments mark a rapid shift from experimental issuances to demonstrably effective green finance instruments, positioning Uzbekistan as an emerging leader in sustainable bond markets in the Central Asia region.
Despite Uzbekistan’s establishment of a green taxonomy and recent green bond activity, the capital finance market continues to face significant legal, institutional and regulatory barriers. It is governed by a patchwork of laws, decrees, and regulations, which creates opacity, contradictions, and unnecessary complexity for potential investors. A consolidated capital markets law, already identified as a government priority, would improve coherence, reduce barriers to entry for domestic and international participants, and strengthen overall market functioning. Similarly, Uzbekistan’s securities market remains fragmented across two exchange platforms, raising transaction costs and limiting liquidity. Integrating these platforms and aligning practices with recognised international exchanges would lower barriers, increase participation, and improve investor confidence (OECD, 2023[78]).
Privatisation also plays a critical role in mobilising private green finance but remains uneven. While the government has pledged to reduce the state’s role in the economy, external shocks have slowed progress in privatising SOEs and state-owned banks. Without stronger corporate governance, transparency in auctions, and improved domestic capacity in capital markets, these institutions will struggle to attract sustainable investment and diversify funding beyond government subsidies (OECD, 2023[78]).
Uzbekistan should seek to broaden both the range of issuers and the types of financial instruments for sustainable infrastructure investment. The Budget Code currently prohibits subnational governments from issuing debt instruments, preventing cities such as Tashkent from financing green infrastructure through municipal green bonds. Kazakhstan has shown that allowing select municipalities to issue debt under strict supervision can successfully expand green financing opportunities while maintaining fiscal oversight. Uzbekistan could consider a similar phased approach. Similarly, there is no legal framework in place to define Islamic finance instruments (e.g. sukuks and other debt instruments that do not make use of interest), blocking the development of green sukuks despite clear signs of domestic demand for Shariah-compliant products. Drawing on experiences from Indonesia, Malaysia and the Gulf Cooperation Council, Uzbekistan could establish the enabling framework for green sukuks, tapping new pools of domestic and international capital (OECD, 2023[78]). Beyond government bonds, Uzbekistan’s state-owned banks and enterprises (SOEs), many of which are slated for privatisation, are well positioned to issue corporate green bonds to support their own transition strategies. For example, UzAuto Motors, which has previously issued conventional corporate bonds, could tap green bonds to finance domestic electric vehicle production, a government priority for the transport sector (OECD, 2023[78]).
While green bonds have captured much of the early attention, Uzbekistan is also developing a broader suite of green finance instruments to channel investment into sustainable infrastructure. Uzbekistan’s green taxonomy is now being applied not only to bonds but also to green loans offered through Uzbekistan’s large state-owned banks. Given that state-owned banks account for around 70% of total lending in the country, their alignment with the taxonomy is critical. Green loans are being extended to finance renewable energy generation, energy efficiency retrofits in housing and industry and water-saving irrigation systems in agriculture (World Bank, 2025[82]).
In parallel, Uzbekistan is reforming its state financial institutions to play a stronger role in mobilising sustainable finance for infrastructure. State financial institutions have historically provided concessional finance and co-investment for strategic sectors, and they are now being encouraged to integrate green lending instruments, concessional credit lines for renewables, and blended finance models that crowd in private capital. Such instruments can lower the cost of capital for large-scale solar and wind power plants, grid modernisation, and energy-efficient transport infrastructure. By combining their financial firepower with private sector participation, these state-backed instruments are well-positioned to accelerate the pipeline of bankable projects essential for Uzbekistan’s sustainable infrastructure transition (World Bank, 2025[82]).
4.4.3. Responsible business conduct framework
Infrastructure development in energy, industry and transport is associated with increased risks related to human rights, labour rights, environmental impacts and business integrity. As governments involve the private sector across the entire infrastructure lifecycle – from planning and financing to delivery, operation, maintenance and decommissioning – Responsible Business Conduct (RBC) plays an increasingly prominent role in the infrastructure sector. With private actors playing a growing role in financing and delivering sustainable infrastructure, attention is shifting to the broader social and environmental impacts of business activities. RBC provides a set of principles to help both public and private stakeholders steer infrastructure development in a more sustainable and responsible manner.
RBC helps improve the sustainability performance of infrastructure investments. By applying RBC principles and standards – particularly risk-based due diligence – companies and investors are better able to identify, prevent and address potential adverse impacts of their infrastructure activities on people, planet and society. Infrastructure projects and their related supply chains can have impacts related to human and labour rights, the environment and climate change, as well as anti-corruption. In this context, the OECD Guidelines for Multinational Enterprises on RBC, together with the Due Diligence Guidance, provide key international standards (OECD, 2018[83]).
Creating the right policy and regulatory environment is essential for governments to promote and enable RBC. The OECD Recommendation on the Role of Government in Promoting RBC underlines that governments should not only develop and implement laws and policies that encourage RBC but also exemplify RBC in their economic and commercial activities. In the infrastructure context, this involves establishing legal frameworks covering human rights, labour rights, environment and anti-corruption as well as implementing state policies on investment promotion and facilitation, public procurement, finance and the governance of state-owned enterprises, as well as efforts to promote meaningful stakeholder engagement and access to remedy (OECD, 2022[84]). Such an enabling environment, in turn, helps countries “keep and attract high quality and responsible investors”.
Under SIPA, the OECD conducted a review of RBC policies in Uzbekistan as they relate to infrastructure development. As Uzbekistan mobilises greater private sector involvement in sustainable infrastructure, RBC is becoming increasingly important to ensure investments generate broad social and environmental benefits. Uzbekistan is already party to most major international conventions relevant to RBC, including 7 of 9 core UN Human Rights Conventions, all fundamental ILO Conventions, and the Paris Agreement (OECD, 2025[2]). The Uzbekistan 2030 strategy explicitly acknowledges the need to mitigate adverse impacts of business operations on natural resources, climate, and corruption (Government of Uzbekistan, 2023[32]). However, while private sector development is central to national strategies, there is not yet a comprehensive government objective to promote RBC in infrastructure. Recent progress, including the establishment of an RBC working group, promotion of ESG practices in state-owned enterprises, and SME strategies incorporating RBC, signal growing momentum, but integration remains fragmented (OECD, 2025[2]).
Uzbekistan is also making strides in integrating human rights into business practice, though implementation remains incomplete. A National Action Plan on Business and Human Rights (NAP BHR) is under development, which would mark an important milestone in formalising RBC expectations (OECD, 2025[2]). Awareness-raising efforts led by government institutions, development partners, and the chambers of commerce have started to shift corporate culture, especially among SOEs and internationally active firms. Development finance institutions have also reinforced higher environmental and social standards in infrastructure, strengthening the government’s pledge to promote the UN Guiding Principles on Business and Human Rights. Yet, efforts lack strong central co-ordination and systematic integration into infrastructure policies (OECD, 2025[2]).
Critical gaps remain in the protection of land, labour, and community rights, particularly in large-scale infrastructure projects. Despite recent legal reforms on landowner compensation, urban development projects have highlighted shortcomings in protecting vulnerable communities, including those in sensitive regions such as Karakalpakstan. Similarly, enforcement of labour rights remains weak: while Uzbekistan has ratified core ILO conventions, the labour inspectorate faces resource and authority constraints, limiting its ability to conduct unannounced inspections and address risks such as unsafe conditions or forced labour. Strengthening labour inspection capacity, enabling independent trade unions, and mandating social impact assessments for high-risk projects would significantly improve alignment with international RBC standards (OECD, 2025[2]).
Strengthening governance frameworks and anti-corruption measures is essential to advance RBC in infrastructure. Uzbekistan has introduced reforms such as the creation of an Anti-Corruption Agency, new procurement digitalisation rules, and laws on conflict-of-interest prevention. However, effective enforcement lags behind legal reforms, particularly as infrastructure expansion intersects with extractive industries, where corruption risks are high. Mainstreaming RBC principles into PPP regulations and strengthening the environmental and social criteria of feasibility studies would better embed these standards into practice. Likewise, adopting international transparency frameworks such as the Extractive Industries Transparency Initiative (EITI) would help build public trust (OECD, 2025[2]).
Uzbekistan’s emerging RBC agenda remains gender-blind in practice. While national legislation on gender equality is broadly aligned with international standards, there are no binding requirements for infrastructure investors or state-owned enterprises to integrate gender safeguards. This leaves risks unaddressed in areas such as labour rights, workplace safety and community consultation, where women are often underrepresented or disproportionately affected by displacement and service disruption. Embedding gender-responsive standards into RBC policies – through mandatory gender impact assessments, targeted labour protections and mechanisms to promote women’s participation in infrastructure decision-making – would strengthen the inclusiveness and accountability of Uzbekistan’s RBC framework.
To build an enabling environment for RBC in infrastructure, Uzbekistan should focus on co-ordination, procurement, and stakeholder engagement. The finalisation and implementation of the NAP BHR and SME strategy provide an opportunity to integrate RBC into sectoral planning. Expanding green public procurement, with mandatory social and environmental criteria and lifecycle costing, would ensure sustainability standards are applied consistently. SOEs should lead by example by embedding ESG strategies that go beyond compliance and strengthen stakeholder engagement. Finally, Uzbekistan could enhance participatory monitoring of infrastructure projects, improve consultation practices in sectors like mining, and accede to the UNECE Aarhus Convention to institutionalise access to information and participation (OECD, 2025[2]).
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← 1. Some earlier, in 2019, the EBRD ‘Low-Carbon Road Map for the Power Sector’ project served as the modelling-core for Uzbekistan’s sectoral decarbonisation agenda, providing a first scenario-based pathway towards carbon-neutral electricity by 2050.
← 2. During the project, different time horizons for carbon neutrality were discussed: 2050, 2055 and 2060. It was not clear which target year the Government would choose.
← 3. Policy note prepared by international consultant Dildora Tadjibaeva, 2025.
← 4. Policy note prepared by international consultant Dildora Tadjibaeva, 2025.
← 5. Policy note prepared by international consultant Dildora Tadjibaeva, 2025.