Energy as a New Growth Constraint: Can Central Asia Sustain Economic Expansion?

Tashkent, Uzbekistan (UzDaily.com) — In Central Asia, issues of power generation, grid modernization, and cross-border electricity trade are moving to the forefront of the agenda. However, behind this sectoral discussion lies a more fundamental macroeconomic question: can the region’s energy system sustain GDP growth of 6–7% amid accelerating urbanization, population growth, and industrial expansion?

For the region, this question is becoming increasingly relevant against the backdrop of strong economic growth. According to the European Bank for Reconstruction and Development, Central Asian economies grew on average by 6.1% in 2025. Growth is projected at 5.2% in 2026, with country-specific forecasts of 6.8% for Uzbekistan, 9.3% for Kyrgyzstan, and 5.5% for Kazakhstan. Against this backdrop, energy is no longer merely an infrastructure issue but a key factor determining the region’s future economic potential.

Demographics, Urbanization, and Industry as Drivers of Future Energy Deficit

The fundamental source of rising electricity demand lies in structural economic and demographic changes. The region’s population has already exceeded 80 million, with the fastest growth observed in Uzbekistan and Kyrgyzstan.

Population growth directly translates into an increase in households, new housing, commercial real estate, and urban infrastructure. Additional pressure comes from expanding industrial production, including metallurgy, construction materials, chemicals, and digital infrastructure such as data centers.

According to the Eurasian Development Bank, electricity consumption in Central Asia is expected to grow by 40% by 2030, reaching approximately 370 billion kWh, while current demand is already increasing at an annual rate of 3–6%. Uzbekistan illustrates this trend clearly: demand is projected to rise from 81 TWh in 2023 to 137 TWh by 2035—an increase of nearly 70%.

Energy Deficit as a Structural Constraint on GDP Growth

A key conclusion is that Central Asia is entering a phase where capacity shortages are becoming a structural constraint on GDP growth.

According to the Eurasian Development Bank, more than 50% of power grids and plants require modernization, with infrastructure wear reaching up to 70% in some segments. This suggests that maintaining economic growth at 6–7% could be hindered by existing infrastructure limitations, affecting industrial development, construction, and investment inflows.

An additional indicator comes from the World Bank, which expects electricity demand to triple by 2050 if current trends persist.

Investment Needs to Sustain Economic Growth

Another key issue is the scale of required investment. According to the Eurasian Development Bank, the region will need to commission 62.8 GW of new capacity by 2035.

For Uzbekistan alone, total capital expenditures are estimated at US$74 billion by 2030. At the regional level, requirements are even higher: achieving carbon neutrality by 2050 could require up to US$1.4 trillion in investment, including generation, storage, grid upgrades, and cross-border infrastructure.

Conclusion

The next phase of Central Asia’s growth will depend not only on investment in industry and infrastructure but also on the ability of its energy system to support that growth. Energy is no longer just a sectoral issue—it has become a macroeconomic factor: each additional kilowatt-hour increasingly translates into GDP growth, while capacity shortages pose a tangible risk of slowing the region’s economic trajectory.

Forvis Mazars is an international, independent, and integrated professional services firm providing audit, accounting, tax, and consulting services. The company possesses deep expertise in analyzing economic and geopolitical developments across Central Asian nations, including Kazakhstan, Uzbekistan, and Kyrgyzstan.

This report and analysis have been prepared by the Forvis Mazars Central Asia team based on comprehensive research of macroeconomic trends, investment flows, trade patterns, and geopolitical factors shaping regional development.

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