The prospect of cooperation with Russia on nuclear power plants is clouding Uzbekistan’s more immediate energy needs

TASHKENT (TCA) – With Uzbekistan continuing to pursue plans to build a nuclear power plant in partnership with Russia, Tashkent recognizes that this billion dollar project can place a heavy drain on the country’s finances, at the expense of more pressing tasks and immediate needs . We publish the following article on the subject, written by Fozil Mashrab:

During a government meeting (March 24) devoted to upgrading Uzbekistan’s energy infrastructure, President Shavkat Mirziyoyev announced that in 2021 alone, over $ 1.1 billion would be spent on upgrading the ineffective and outdated power grid and crumbling natural gas distribution system of the Provided in the country. Energy Minister Alisher Sultanov stressed that the energy sector had never received such a large amount of funding to address the crippling problems that had been accumulating over many years (Gazeta.uz, March 25).

This year, more than 15,000 kilometers of power transmission lines and 4,000 substations will be renewed, and 958 kilometers of gas networks and 3,232 gas distribution points will be completely overhauled. Most of this energy infrastructure was built in the 1950s and 1960s and is in dire need of modernization. However, all of these government-funded upgrades will make up less than 15 percent of total Uzbek electricity and gas infrastructure that needs to be repaired. Therefore, this level of work must be continued for years before a significant nationwide positive impact can be felt immediately. Millions of people in Uzbekistan are facing chronic power outages and blackouts, mainly due to wasteful and ineffective energy infrastructure (Kun.uz, ​​March 24; see EDM, January 28).

As the government appears to finally begin to seriously address the long-neglected problems in the energy sector – an enormous task that will require billions of dollars in investment in the years to come – the question arises whether there will be enough resources left his plans to build a nuclear power plant in collaboration with the Russian Rosatom Agency. A bilateral framework agreement for the construction of a nuclear power plant was signed in December 2017, one year after President Mirziyoyev came to power (see EDM, July 10, 2018). However, since then disagreements over the cost of the nuclear power plant have prevented the deal from being closed.

The project is expected to require between $ 10 billion and $ 13 billion, which would put enormous pressure on the Central Asian country’s budget. Even if initial funding for Rosatom can be provided in the form of a Russian state loan, the funding could be extremely unpopular with the Uzbek public, already concerned about the sharp rise in external debt under Mirziyoyev’s rule (Review.uz, March 10, 2021) .

From 2016, when Mirziyoyev took over the country, to the COVID-19 pandemic in 2020, Uzbekistan’s overseas obligations rose from $ 14.7 billion to $ 33.8 billion, which is more than 50 percent of the national GDP per year. The government plans to borrow an additional $ 5 billion through 2021 to further increase the national debt of a country that continues to grapple with the negative effects of the economic slowdown sparked by the pandemic. Despite assurances from Uzbek officials and foreign experts associated with various international financial institutions, concerns about the sustainability of such loans domestically persist among the general public (Spot.uz, March 26).

In addition to the financial risks, concerns about the safety of the planned nuclear power plant have only recently grown. The collapse of the government-built Sardoba Dam in Uzbekistan’s Sirdarya Province last year, which affected hundreds of thousands of people (see EDM, Jan. 28), is likely to change public opinion against building a nuclear power plant. The widespread fear that the government will appoint short-sighted interest groups, especially those notorious for cutting corners and doing poor jobs, may well arise in the face of increasing nepotism and crony capitalism in Uzbekistan in recent years (Regnum , May 1, 2020).

In contrast, neighboring Kazakhstan has so far resisted Russia’s ongoing offers to build a nuclear power plant on its territory. In Kazakhstan, like in Uzbekistan, the general public fears that building a nuclear power plant with a Russian state loan could lead to a debt trap. At the same time, Kazakhstan fears that approving the construction of this project could give Russia another strong reason to consolidate its presence in the country by opening a new military facility under the pretext of keeping the nuclear power plant safe. All of these technological and security dependencies would certainly strengthen Russia’s leverage effect on these resource-rich Central Asian republics for the coming years (Azattyq-ruhy.kz, February 26).

The Kremlin has reportedly delayed President Mirziyoyev’s planned official visit to Russia since the summer of 2020 due to no progress in negotiations on the nuclear power plant. As a result, various other issues on the bilateral agenda that are of great concern to Uzbekistan remain unresolved. One such prominent problem is Tashkent’s desire to bring the number of regular direct flights between the two countries back to pre-pandemic levels and to allow Uzbek citizens to travel freely to Russia again to work and study there ( Vesti, February 27).

Uzbekistan’s Foreign Minister Abdulaziz Kamilov traveled to Moscow on March 1 and 2, 2021. During that visit, both sides announced that President Mirziyoyev’s long delayed trip to Moscow would take place at an unspecified time before the end of the year. The Russian Foreign Ministry said in its statement on the matter that more than 30 bilateral agreements are expected to be signed during the visit. This includes, in particular, an agreement to build a nuclear power plant in Uzbekistan (Podrobno.uz, March 2). In turn, Kamilov announced that the Moscow summit is expected to take place after the presidential elections in Uzbekistan scheduled for October 24 (Gazeta.uz, March 2). Mirziyoyev is likely to easily win another term as he currently faces no real opposition.

The Uzbek government remains tense and cautious about its nuclear power plant plans for the time being. President Mirziyoyev may not want this deeply controversial and controversial issue to feature prominently in the election campaign. However, various media leaks suggest that the immediate reason for the delay in reaching a final settlement on the nuclear power plant is the inability of both parties to mutually agree on mutually acceptable terms and the final cost of the project, rather than the Uzbek government’s concerns (Vesti, February 27).

With the continuation of plans to build a nuclear power plant, Tashkent’s priorities arguably diverge from the country’s most pressing concerns. First of all, the modernization of the decaying energy infrastructure network of Uzbekistan should be tackled intuitively. Grandiose plans to build a nuclear power plant with Russian loans, on the other hand, can put a heavy burden on the country’s finances, at the expense of more pressing tasks and immediate needs.

This article was originally published by The Jamestown Foundation’s Eurasia Daily Monitor