TASHKENT, Uzbekistan, September 19. Uzbekistan’s electricity sector is still under the thumb of the state, with the government calling all the shots on tariffs.
According to data obtained by Trend from PwC’s latest report, electricity price growth is artificially restrained to ensure stable and affordable tariffs for consumers. While this policy helps protect consumers, it places a heavy burden on the state budget, as subsidies to power producers are required to offset the gap. Over time, such subsidies undermine the financial resilience of energy companies.
At the same time, Uzbekistan’s power grid suffers from significant depreciation and requires urgent modernization. Key priorities include digitalization and improved system flexibility to ensure the efficient integration of renewable energy sources.
Artificially low retail tariffs diminish the sector’s attractiveness to private and foreign investors. Unsustainable pricing structures make it difficult to achieve returns on investment, especially in capital-intensive areas such as renewables. This slows the inflow of private capital, delays infrastructure upgrades, and restrains the development of a competitive electricity market.
According to a presidential decree, the schedule for fuel and energy price adjustments in 2024–2025 has been revised: the increase, initially planned for April 1, has been postponed to May 1. From that date, tariffs for electricity and natural gas will be indexed annually to reflect inflation but capped at a maximum of 10 percent per year.
