Uzbekistan is advancing a large-scale reform of its hydropower sector, focusing on capacity expansion, investment acceleration and the introduction of national project models to strengthen domestic industrial participation.

The initiative reflects a broader strategy to enhance energy security, increase generation capacity and modernize infrastructure through coordinated investment and project execution.

Ambitious capacity expansion targets

 

The reform sets clear development targets:

• commissioning of 114 MW of new capacity and generation of 7.1 billion kWh of electricity by the end of 2026;
• construction of pumped storage power plants with total capacity of 1,400 MW by 2032;
• increase of total hydropower capacity by 2.4 times, including creation of 3,266 MW of additional capacity.

These targets position hydropower as a key component of Uzbekistan’s long-term energy mix.

Introduction of national project model

 

A notable feature of the reform is the introduction of a national project model, which:

• creates a full value chain in hydropower development;
• involves domestic companies in design, construction and manufacturing;
• promotes localization and industrial development.

Within this framework, approximately 550 MW of new capacity is planned to be developed through national projects between 2026 and 2032.

Acceleration of investment project implementation

 

To speed up project delivery, the framework introduces several procedural and operational flexibilities:

• infrastructure (roads, power grids and utilities) can be constructed using single-stage design (EPC-type approach);
• project documentation may be reviewed in stages, based on approved pre-project documentation;
• sector entities are allowed to participate in procurement processes within the system.

In addition, specialized design organizations are permitted to use drone technologies for surveys and feasibility studies in areas lacking infrastructure.

Strengthening project governance and execution

 

The reform clarifies roles within project implementation:

• designated entities act as EPC contractors (“turnkey” delivery);
• specialized organizations are responsible for monitoring safety and operational reliability of hydrotechnical facilities;
• increased coordination across government bodies ensures faster decision-making on land use and project approvals.

Land allocation procedures for hydropower projects are also streamlined to support timely implementation.

Financial and institutional support

 

Key financial measures include:

• revision of electricity tariffs to reflect investment and operational costs;
• reinvestment of retained earnings into capital expansion of sector entities;
• disposal of non-core assets to finance development projects.

In parallel, initiatives are being developed to accelerate implementation of green energy certification mechanisms.

Implications

 

The reform signals a shift toward:

• large-scale infrastructure-driven energy development;
• stronger integration of domestic industry into energy projects;
• increased use of EPC and project-based delivery models;
• enhanced focus on investment efficiency and execution speed.

For investors and contractors, this creates opportunities in infrastructure, engineering, and energy project development, while also increasing expectations on delivery and compliance.

The measures entered into force on 4 May 2026.