Central Asia moves toward regional energy market after historic conference



Energy ministers and other officials from Central and West Asian countries, officials from development partners, and ADB delegates are shown September 20 in Tashkent at the CAREC Energy Ministers' Dialogue. [ADB]

TASHKENT -- Nine countries in Central and West Asia on Friday (September 20) signed a historic declaration aimed at accelerating cross-border co-operation on energy and boosting the creation of a regional energy market, the Asian Development Bank (ADB) said in a statement.

Energy ministers and leaders from Afghanistan, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan and Uzbekistan signed a 10-point declaration at the end of the Central Asia Regional Economic Co-operation (CAREC) Energy Ministers' Dialogue in Tashkent.

The dialogue marked the first time Central and West Asian energy ministers had convened to discuss regional energy challenges.

The participants' declaration accelerates reforms leading to more-liberal energy markets, according to the ADB. They include "greater private sector participation and investment, increased power connections and exchanges between countries, and a strong commitment to tap renewable energy sources and clean technologies".

The participants endorsed a 10-year CAREC Energy Strategy aimed at providing the region a secure energy future.

The event comes as CAREC draws up an energy future that could free its ex-Soviet members from dependence on Russia. Relevant considerations include "strategic transit opportunities for oil and gas through Turkey and Georgia", according to the ADB.

Precisely in that direction, Turkmenistan is proposing an undersea trans-Caspian pipeline. If built, the pipeline would enable Turkmenistan and Kazakhstan to export natural gas to southern Europe without having to use the pipeline network of Russia, the two countries' former coloniser.

At the same time, construction is proceeding on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline, which is meant to supply energy-starved Pakistan and India.

That project depends on Afghanistan's ability to secure TAPI's route through its territory against Iranian-ordered Taliban sabotage. If the war-torn country succeeds, TAPI would mean a steady stream of badly needed gas, jobs and transit revenues for it.

Multiple challenges

The region's energy sector faces a number of challenges. They include the uneven distribution of natural resources, inadequate infrastructure and inefficient government-owned utilities, according to the ADB. As a result, some countries -- notably Pakistan -- face chronic power shortages.

The region will have to double power system capacity by 2030 to keep up with demand, predicts the ADB. The necessary investments will cost an estimated $400 billion.

Regional co-operation, modern energy markets and a boost in private investment can create enough power to serve the countries' own needs as well as foreign markets.

"The region cannot achieve the level of investment needed without large private investments," said ADB Director General for Central and West Asia Werner Liepach. "I am deeply impressed by the CAREC countries' strong commitments to reforms."

"This is a historic achievement and an important commitment," said Diwakar Gupta, an ADB vice president. "The energy sector drives economic growth in the region, so this unprecedented gathering of energy leaders is very important."

ADB is the secretariat of the CAREC programme, which since 2001 has financed 196 regional projects worth $34.5 billion in transport, energy and trade in the CAREC member countries.

The 11 members of CAREC are Afghanistan, Azerbaijan, China, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan.

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