Central Asia Seeks Balance Between Green and Gas Investment

Tashkent, Uzbekistan (UzDaily.uz) — International investors considering Central Asia face a contradiction that experts say has yet to be conclusively resolved: while the region has significant renewable energy potential, geopolitical shifts at the beginning of 2025 have restored fossil fuels as a strategic asset.

"Traditional energy sources should not be underestimated, at least during this decade," Angela Cheng of China Galaxy International Securities said, adding that solar power, wind energy and oil and gas assets occupy different positions within an investment portfolio.

Teze Wang, Managing Director of CCX Green Finance International, presented China's experience, saying the country's green bond issuance has exceeded 3 trillion yuan, while the total volume of sustainable finance instruments has reached 30 trillion yuan (about US$4 trillion).

She said the main drivers have been government policy, international standards, including the International Capital Market Association (ICMA) principles, and subsidies for issuers provided through regulators in Hong Kong and Singapore.

According to Wang, attracting green investment to Central Asia will first require the development of a taxonomy and transparent ESG reporting.

"Greenwashing is the key risk for investors. Taxonomy is more important than projects," she said.

Amar Ahmed, Chief Executive Officer of Dar Al Sharia, part of Dubai Islamic Bank Group, pointed to what he described as an unexpected synergy. He said projects structured in accordance with Sharia principles, including reliance on real assets and risk sharing, are naturally compatible with ESG financing criteria.

He advised issuers seeking capital from Gulf countries to structure transactions in line with Sharia principles.

"If your project complies with Sharia requirements and is environmentally sustainable, demand exists and will continue to exist," he said.

Cheng also outlined a practical route for Central Asian issuers, saying that a listing on the Hong Kong Stock Exchange provides access to global capital, including China's bond market, where borrowing costs have historically remained low at around 1.5%.

Kazakhstan has already used this route, with the Development Bank of Kazakhstan issuing securities in Hong Kong and the country's Ministry of Finance placing sovereign instruments in international markets.