World Bank Supports Central Asia’s First Regional Electricity Market to Boost Energy Security and Affordability

§ 01 Executive Snapshot

• What: The World Bank approved the Regional Electricity Market Interconnectivity and Trade (REMIT) Program to establish Central Asia's first regional electricity market.
• Who: Key players include the World Bank, Kyrgyz Republic, Tajikistan, Uzbekistan, and CDC Energia.
• Why it matters: This initiative aims to enhance energy security, affordability, and sustainability in Central Asia, addressing rising electricity demand and underutilized clean energy resources.

§ 02 Key Developments

• The REMIT Program has total indicative financing of $1.018 billion across three phases over a 10-year period.
• Phase one will provide $143.2 million in grants and concessional financing, including $140 million from the World Bank’s IDA and $3.2 million from CAWEP.
• Electricity trade in Central Asia is currently only 3% of total electricity demand, with variable renewables accounting for 4% of power generation.

§ 03 Strategic Context

• Central Asia faces rapidly increasing electricity demand, projected to triple by 2050, driven by population and economic growth.
• The region possesses abundant clean energy resources that are underutilized, with significant potential for renewable energy integration.

§ 04 Strategic Implications

• The program is expected to increase electricity trade to at least 15,000 GWh annually, enhancing energy access for millions and improving economic resilience.
• A more interconnected power system could lower energy costs for households and businesses, while promoting job creation in construction and energy sectors.

§ 05 Risks & Constraints

• Limited existing electricity trade may pose challenges to achieving the ambitious trade and capacity goals outlined in the program.
• The success of the program hinges on effective coordination among national transmission companies and regional institutions.

§ 06 Watchlist / Forward Signals

• Future phases will expand the market platform and reinforce regional transmission networks, with specific rollout timelines not yet specified.
• Monitoring the establishment and operationalization of the regional electricity market will indicate the program's success or failure.