How to transition the energy sector of the four Central Asian Republics (Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan) from inefficient state energy bureaucracies (inherited from the former Asian Central Asian Soviet) towards a customer-focused, Central Asian Power Market. The focus of the transition was to achieve financially sound entities funding the rehabilitation of the dilapidated electricity systems, improve customer service, quality, reliability, and lowest cost of energy delivery, and improve efficiencies through regional power sharing/trading. A successful transition would reduce electricity costs for customers, enhance the security of energy supply, and promote economic growth across the region and in Central Asian countries.
The strategy adopted was individual ‘in-country’ diagnostic assessments of (i) electricity generators and providers, (ii) electricity markets institutional arrangements, (iii) regulatory and legal environments in each country including any cross border legal and regulatory issues, (iv) business reviews for each country’s operating entities, including review of management and governance arrangements, review of key performance indicators (KPIs) for management, and the linking of KPIs to individual functional elements/plans of the strategic business plans. Following this diagnostic assessment options and recommendation would be developed for practical steps towards the development of efficient and sustainable trading, and ultimately market-led and responsive power sectors.
While a decision was deferred on establishing a Central Asian Regional Electricity Market, the participating countries agreed to start with implementing a functional separation model within their electricity businesses, separating generation, transmission, and retail.