Uzbekistan's electricity demand to surge with economic growth, AI adoption: Franklin Templeton

Uzbekistan's energy infrastructure faces a significant surge in demand driven by economic growth, increasing digitalization, and the rapid development of Artificial Intelligence, according to Marius Dan, CEO for Central Asia at Franklin Templeton. He emphasized that all these advancements ultimately rely on electricity.

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Ultimately, all of this will run on electricity.

Franklin Templeton, through its management of Uzbekistan’s National Investment Fund (UzNIF), holds stakes in several key energy companies. Dan stated that the fund's priority is to prepare these companies to access international markets for the substantial capital required for investments in distribution networks, generation, transmission, and transport infrastructure.

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As the National Investment Fund, we have assets in the energy sector and want to make sure our companies are ready for this. That means significant capital investment in distribution networks, generation, transmission and transport infrastructure.

Dan stressed the necessity of regulatory reforms within the energy sector. These include liberalizing electricity tariffs and fully implementing the Regulated Asset Base (RAB) methodology for transmission and distribution networks. He believes these measures will provide energy companies with adequate incentives to sustain infrastructure investments.

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regulatory reforms in the energy sector are also necessary, including electricity tariff liberalization and the full implementation of the RAB methodology for transmission and distribution networks.

He noted that the need for investment is becoming more urgent due to ongoing economic and population growth, coupled with continued digitalization efforts. Dan indicated that the speed at which the government advances legislative reforms will be critical in determining the energy system's ability to adapt to rising demand while simultaneously undertaking necessary investments and regulatory changes. He expressed hope for greater clarity on the RAB mechanism by the end of the year, which would significantly influence the capital these companies can raise.

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There is a lot to be done, and much also depends on the government’s willingness to accelerate the adoption of the necessary legislative framework that will create incentives for these companies.