Crossroads Asia | Economy | Central Asia

China’s Divergent Strategy: Modernizing vs. Stabilizing Energy Infrastructure in Central Asia

Beijing has not taken a one-size-fits-all approach to its engagement with the energy sectors in Uzbekistan and Kyrgyzstan. 

Typical winters in Bishkek and Tashkent in recent years have featured thick smog and periodic power outages. For both Kyrgyzstan and Uzbekistan, increasing investment in alternative energy development is the most logical strategy to address their rising energy needs and China stands as a top partner in doing so. 

China’s investments and policies in each country largely determines the trajectories of their “green transitions.” Consequently, legitimate questions arise about the price these countries will pay for such a rapid infusion of financial resources into this sector and how Beijing’s approach differs in this regard.

Energy Strategies and Renewables

Uzbekistan and Kyrgyzstan have each adopted their own energy strategies. They mainly differ in their resource base and development priorities, which also directly affects China’s energy engagement. 

Uzbekistan’s Strategy for the Transition to a Green Economy (2019-2030) was adopted in 2019. It aims to transform Uzbekistan into a “green” economy by improving energy sufficiency, reducing greenhouse gas emissions, the rational consumption of energy, expanding access to green energy and creating green jobs. Uzbekistan’s priorities thus encourage China to concentrate on large scale investments in renewable energy plants, grid modernization and developing solar and wind technologies, which align with China’s global leadership in this sphere. 

Meanwhile, in 2025 Kyrgyzstan’s Ministry of Energy proposed a draft resolution on developing renewable energy. The main priority is modernization of the country’s existing hydroelectric infrastructure and increasing of renewable energy resources up to 92 percent out of total output. This strategy is rooted in Kyrgyz President Sadyr Japarov’s 2023 declaration of an “emergency” in the energy sector, stemming from increasing water scarcity and electricity shortages. 

Kyrgyzstan is focused on the construction of small hydropower and solar power plants to create internal stability in case of any crashes in regional energy plants and to avoid water scarcities. With regard to its energy related investments in Kyrgyzstan, China is focused on modernization under government authority by providing loans that will allow Kyrgyzstan to save the main energy system and become a regional exporter in the area of clean energy by the end of the decade.

Common Platforms and Connectivity 

China and Uzbekistan established relations on January 2, 1992, but bilateral relations have intensified in recent years. The two reached a comprehensive strategic partnership in June 2016 and elevated that further to an “all-weather” comprehensive strategic partnership in January 2024. 

Cooperation between China and Kyrgyzstan, following the establishment of diplomatic ties on January 5, 1992, was limited for the first decade. The signing of a Treaty of Good-Neighborliness, Friendship and Cooperation in 2002 signaled a shift toward deeper engagement. In 2025, the relationship was elevated to a comprehensive strategic partnership. Notably, this is a step down from the level of relations China has with Uzbekistan at present.

There are many common platforms and projects that unite Kyrgyzstan and Uzbekistan with China. China’s cooperation with Uzbekistan and Kyrgyzstan occurs not just on the bilateral level but as a part of broader regional platforms such as the Shanghai Cooperation Organization, the Belt and Road Initiative, and the biennial China-Central Asia meetings. The three are also engaged in a grand project, the China-Kyrgyzstan-Uzbekistan railroad, which promotes regional logistics by diminishing the time of ground-level transportation of the trade linkages between China and the Central Asian markets. If Kyrgyzstan serves as an important transit corridor for China in this regard, Uzbekistan is seen as the main market and regional industrial center. 

Even though Uzbekistan and Kyrgyzstan participate in many of the same platforms, China’s approach and level of agreements significantly vary between the two, depending on each country’s economic structure, strategic role and domestic energy needs. 

Analysis of China led Projects in Renewable Projects two countries

According to the Foreign Policy Research Institute, over the past few years many Chinese companies, including China Energy International (partnering with ACWA) and Energy China (CEEC), have constructed solar power stations across a number of Uzbek provinces such as Tashkent, Navoi, Jizzakh, Fergana, Kashkadarya, Bukhara, and Samarkand.

Uzbekistan’s northwest regions, including Karakalpakstan and parts of Navoi and Bukhara have very strong and stable wind conditions, which creates a convenient environment for the construction of wind power energy plants in Uzbekistan. According to Expo 2025, the country’s theoretical wind energy potential exceeds 520,000 megawatts (MW), which surpasses Uzbekistan’s current domestic energy demand. For Chinese companies these conditions provide an opportunity to invest in specific regions of Uzbekistan to develop wind energy. 

Biomass energy is another relevant energy field for Uzbekistan given its huge agricultural sector. As one of the world’s largest cotton producers, Uzbekistan creates biomass energy mostly from cotton stalks (guzapaya) and agricultural waste. However, this sector is undeveloped and has attracted limited investment by China, due to the complexity of the process and lower-bankability compared to other renewable energy sources.

Even though China is not directly investing in biomass energy in Uzbekistan, Chinese companies still show up in relation to government initiatives. In October 2024, Uzbekistan announced plans to invest in $1.3 billion in waste-to-energy projects, by cooperating with several international companies, including with China’s CAMC Engineering and Shanghai SUS Environment. Once implemented, the plant will be producing 2.1 billion kilowatt-hours of electric power by processing 4.7 million metric tons of solid waste a year.

China is the main source of foreign direct investment (FDI) to Uzbekistan, which also includes financing energy projects. Chinese FDI has grown by $10.4 billion, while the total investment to Central Asia has reached $36 billion by mid 2025. In recent years, Chinese state-owned enterprises (SOEs) have shifted towards “invest-build-operate” models, meaning that after the completion of projects, they operate under Chinese companies for a specified time period. By the beginning of 2026 the leading position in financing energy projects is taken by huge private and “hybrid” actors like SANY Renewable Energy and CEEC, both of which apply the invest-build-operate model.

Taken together, Chinese investments in Uzbekistan are very diversified, but also clearly prioritized. For long-term planning, China focuses on solar and wind energy, while biomass remains marginal and coal is used only to stabilize the system during periods of supply stress. Uzbekistan has a massive consumer market, natural resources and is relatively stable politically, which makes it an attractive destination for long-term, profit-oriented Chinese energy investments. Due to this market logic, Uzbekistan stands out as a more attractive destination for Chinese investments and trade agreements.

If we consider Kyrgyzstan, diversification of energy resources has become more relevant since Japarov’s emergency declaration in mid-2023. By the end of 2025 the government had signed an agreement with a Chinese consortium to construct a 250 MW solar electrostation in Batken region. In December 2025, a Chinese-built waste-to-energy plant began operations. It recycles 1000 tons of wastes per day and produces over 146 million kWh per year. 

Despite these renewable energy initiatives, coal plays a huge role in providing energy security in Kyrgyzstan. Coal production has been increased up to 13 percent of total electricity generation in order to maintain energy security, and the government is planning to increase coal mining up to 3 million tons per year by 2025.  

Kyrgyzstan’s history of political upheaval – the country experienced revolutions in 2005, 2010, and 2020 – continue to generate caution on the part of Chinese companies, which consider the country’s  market  unstable and unattractive for the FDI. Thus, to compensate for the existing risks, companies receive financial support from the government agencies, especially EXIM bank of China in the early stages. 

China’s involvement has significantly changed the energy sector of Kyrgyzstan through modernization and improvement of infrastructure. Analysis shows that state-owned companies remain the primary creditors in Kyrgyzstan’s energy sector, while private firms are still cautiously studying the renewables market. The share of Chinese investment in renewables remains low compared to the situation in Uzbekistan.

Furthermore, China is hardly investing in large-scale hydropower plants, largely limiting itself to promises and memorandums. These trends are driven partly by the crisis state of the Kyrgyz energy sector and the history of political instability. Compounding these issues is the external debt, which remains relatively high compared to other Central Asian nations

China has not taken a one-size-fits-all approach to the energy sectors in Uzbekistan and Kyrgyzstan. Beijing’s divergent approaches not only reflect Chinese priorities, but also the domestic situation of each country and their role in the wider region. In Uzbekistan, the scale of Chinese engagement is larger, more long-term and diversified. In Kyrgyzstan, it is smaller and more targeted, instead of developing an energy system, China (and Bishkek) is more focused on stabilizing the existing one. In the first half of 2025, the total amount of  Chinese investments to Uzbekistan exceeded $10.7 billion, while in Kyrgyzstan they reached $2.1 billion by the end of the year. 

These differences are also evident in the energy portfolio of each country. In Uzbekistan, renewables, especially solar and wind energy, are at the center of expansion plans. China has helped Uzbekistan with its coal industry modernization, too, to meet needs during energy shortages in winter. In contrast, in Kyrgyzstan, China focuses on modernizing hydropower and combined heat and power plants, using coal as a backstop for winter reliability. Overall, Uzbekistan presents a huge market and profit hub for Chinese investments, whereas in Kyrgyzstan it primarily focuses on infrastructure stabilization and regional connectivity. 

Mehrona and Milana would like to express their sincere gratitude to Dr. Nargiza Muratalieva, a part time associate professor in the International and Comparative Department at AUCA, for her invaluable guidance and continuous support throughout the writing of this article.

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Typical winters in Bishkek and Tashkent in recent years have featured thick smog and periodic power outages. For both Kyrgyzstan and Uzbekistan, increasing investment in alternative energy development is the most logical strategy to address their rising energy needs and China stands as a top partner in doing so. 

China’s investments and policies in each country largely determines the trajectories of their “green transitions.” Consequently, legitimate questions arise about the price these countries will pay for such a rapid infusion of financial resources into this sector and how Beijing’s approach differs in this regard.

Energy Strategies and Renewables

Uzbekistan and Kyrgyzstan have each adopted their own energy strategies. They mainly differ in their resource base and development priorities, which also directly affects China’s energy engagement. 

Uzbekistan’s Strategy for the Transition to a Green Economy (2019-2030) was adopted in 2019. It aims to transform Uzbekistan into a “green” economy by improving energy sufficiency, reducing greenhouse gas emissions, the rational consumption of energy, expanding access to green energy and creating green jobs. Uzbekistan’s priorities thus encourage China to concentrate on large scale investments in renewable energy plants, grid modernization and developing solar and wind technologies, which align with China’s global leadership in this sphere. 

Meanwhile, in 2025 Kyrgyzstan’s Ministry of Energy proposed a draft resolution on developing renewable energy. The main priority is modernization of the country’s existing hydroelectric infrastructure and increasing of renewable energy resources up to 92 percent out of total output. This strategy is rooted in Kyrgyz President Sadyr Japarov’s 2023 declaration of an “emergency” in the energy sector, stemming from increasing water scarcity and electricity shortages. 

Kyrgyzstan is focused on the construction of small hydropower and solar power plants to create internal stability in case of any crashes in regional energy plants and to avoid water scarcities. With regard to its energy related investments in Kyrgyzstan, China is focused on modernization under government authority by providing loans that will allow Kyrgyzstan to save the main energy system and become a regional exporter in the area of clean energy by the end of the decade.

Common Platforms and Connectivity 

China and Uzbekistan established relations on January 2, 1992, but bilateral relations have intensified in recent years. The two reached a comprehensive strategic partnership in June 2016 and elevated that further to an “all-weather” comprehensive strategic partnership in January 2024. 

Cooperation between China and Kyrgyzstan, following the establishment of diplomatic ties on January 5, 1992, was limited for the first decade. The signing of a Treaty of Good-Neighborliness, Friendship and Cooperation in 2002 signaled a shift toward deeper engagement. In 2025, the relationship was elevated to a comprehensive strategic partnership. Notably, this is a step down from the level of relations China has with Uzbekistan at present.

There are many common platforms and projects that unite Kyrgyzstan and Uzbekistan with China. China’s cooperation with Uzbekistan and Kyrgyzstan occurs not just on the bilateral level but as a part of broader regional platforms such as the Shanghai Cooperation Organization, the Belt and Road Initiative, and the biennial China-Central Asia meetings. The three are also engaged in a grand project, the China-Kyrgyzstan-Uzbekistan railroad, which promotes regional logistics by diminishing the time of ground-level transportation of the trade linkages between China and the Central Asian markets. If Kyrgyzstan serves as an important transit corridor for China in this regard, Uzbekistan is seen as the main market and regional industrial center. 

Even though Uzbekistan and Kyrgyzstan participate in many of the same platforms, China’s approach and level of agreements significantly vary between the two, depending on each country’s economic structure, strategic role and domestic energy needs. 

Analysis of China led Projects in Renewable Projects two countries

According to the Foreign Policy Research Institute, over the past few years many Chinese companies, including China Energy International (partnering with ACWA) and Energy China (CEEC), have constructed solar power stations across a number of Uzbek provinces such as Tashkent, Navoi, Jizzakh, Fergana, Kashkadarya, Bukhara, and Samarkand.

Uzbekistan’s northwest regions, including Karakalpakstan and parts of Navoi and Bukhara have very strong and stable wind conditions, which creates a convenient environment for the construction of wind power energy plants in Uzbekistan. According to Expo 2025, the country’s theoretical wind energy potential exceeds 520,000 megawatts (MW), which surpasses Uzbekistan’s current domestic energy demand. For Chinese companies these conditions provide an opportunity to invest in specific regions of Uzbekistan to develop wind energy. 

Biomass energy is another relevant energy field for Uzbekistan given its huge agricultural sector. As one of the world’s largest cotton producers, Uzbekistan creates biomass energy mostly from cotton stalks (guzapaya) and agricultural waste. However, this sector is undeveloped and has attracted limited investment by China, due to the complexity of the process and lower-bankability compared to other renewable energy sources.

Even though China is not directly investing in biomass energy in Uzbekistan, Chinese companies still show up in relation to government initiatives. In October 2024, Uzbekistan announced plans to invest in $1.3 billion in waste-to-energy projects, by cooperating with several international companies, including with China’s CAMC Engineering and Shanghai SUS Environment. Once implemented, the plant will be producing 2.1 billion kilowatt-hours of electric power by processing 4.7 million metric tons of solid waste a year.

China is the main source of foreign direct investment (FDI) to Uzbekistan, which also includes financing energy projects. Chinese FDI has grown by $10.4 billion, while the total investment to Central Asia has reached $36 billion by mid 2025. In recent years, Chinese state-owned enterprises (SOEs) have shifted towards “invest-build-operate” models, meaning that after the completion of projects, they operate under Chinese companies for a specified time period. By the beginning of 2026 the leading position in financing energy projects is taken by huge private and “hybrid” actors like SANY Renewable Energy and CEEC, both of which apply the invest-build-operate model.

Taken together, Chinese investments in Uzbekistan are very diversified, but also clearly prioritized. For long-term planning, China focuses on solar and wind energy, while biomass remains marginal and coal is used only to stabilize the system during periods of supply stress. Uzbekistan has a massive consumer market, natural resources and is relatively stable politically, which makes it an attractive destination for long-term, profit-oriented Chinese energy investments. Due to this market logic, Uzbekistan stands out as a more attractive destination for Chinese investments and trade agreements.

If we consider Kyrgyzstan, diversification of energy resources has become more relevant since Japarov’s emergency declaration in mid-2023. By the end of 2025 the government had signed an agreement with a Chinese consortium to construct a 250 MW solar electrostation in Batken region. In December 2025, a Chinese-built waste-to-energy plant began operations. It recycles 1000 tons of wastes per day and produces over 146 million kWh per year. 

Despite these renewable energy initiatives, coal plays a huge role in providing energy security in Kyrgyzstan. Coal production has been increased up to 13 percent of total electricity generation in order to maintain energy security, and the government is planning to increase coal mining up to 3 million tons per year by 2025.  

Kyrgyzstan’s history of political upheaval – the country experienced revolutions in 2005, 2010, and 2020 – continue to generate caution on the part of Chinese companies, which consider the country’s  market  unstable and unattractive for the FDI. Thus, to compensate for the existing risks, companies receive financial support from the government agencies, especially EXIM bank of China in the early stages. 

China’s involvement has significantly changed the energy sector of Kyrgyzstan through modernization and improvement of infrastructure. Analysis shows that state-owned companies remain the primary creditors in Kyrgyzstan’s energy sector, while private firms are still cautiously studying the renewables market. The share of Chinese investment in renewables remains low compared to the situation in Uzbekistan.

Furthermore, China is hardly investing in large-scale hydropower plants, largely limiting itself to promises and memorandums. These trends are driven partly by the crisis state of the Kyrgyz energy sector and the history of political instability. Compounding these issues is the external debt, which remains relatively high compared to other Central Asian nations

China has not taken a one-size-fits-all approach to the energy sectors in Uzbekistan and Kyrgyzstan. Beijing’s divergent approaches not only reflect Chinese priorities, but also the domestic situation of each country and their role in the wider region. In Uzbekistan, the scale of Chinese engagement is larger, more long-term and diversified. In Kyrgyzstan, it is smaller and more targeted, instead of developing an energy system, China (and Bishkek) is more focused on stabilizing the existing one. In the first half of 2025, the total amount of  Chinese investments to Uzbekistan exceeded $10.7 billion, while in Kyrgyzstan they reached $2.1 billion by the end of the year. 

These differences are also evident in the energy portfolio of each country. In Uzbekistan, renewables, especially solar and wind energy, are at the center of expansion plans. China has helped Uzbekistan with its coal industry modernization, too, to meet needs during energy shortages in winter. In contrast, in Kyrgyzstan, China focuses on modernizing hydropower and combined heat and power plants, using coal as a backstop for winter reliability. Overall, Uzbekistan presents a huge market and profit hub for Chinese investments, whereas in Kyrgyzstan it primarily focuses on infrastructure stabilization and regional connectivity. 

Mehrona and Milana would like to express their sincere gratitude to Dr. Nargiza Muratalieva, a part time associate professor in the International and Comparative Department at AUCA, for her invaluable guidance and continuous support throughout the writing of this article.

Mehrona Bozorova is a third-year BA student in International and Comparative Politics at the American University of Central Asia (AUCA). She currently interns at the Istanbul Peace Research Center, where she further develops her research and writing skills. She is also an Erasmus+ exchange student at Philipps University of Marburg, studying social sciences and philosophy.

Milana Moldosheva is a third-year BA student in International and Comparative Politics at the American University of Central Asia (AUCA). She is currently an exchange student at Goethe University Frankfurt in Germany. She previously served as a teaching assistant at GHE21 (OSUN). Her academic interests include foreign policy analysis as well as Central Asian political economy.

China in Central Asia

China-Kyrgyzstan relations

China-Kyrgyzstan-Uzbekistan railway

China-Uzbekistan relations

Chinese investment in Kyrgyzstan

Chinese investments in Uzbekistan

Kyrgyzstan energy needs

Kyrgyzstan energy sector

Kyrgyzstan hydropower

Uzbekistan energy industry

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