Prospects for cooperation with Russia on nuclear power plant darken more immediate energy needs of Uzbekistan
TASHKENT (TCA) – As Uzbekistan continues to pursue plans to build a nuclear power plant in collaboration with Russia, Tashkent understands that the multibillion-dollar project could become a heavy burden on the country’s finances and fall apart. do at the expense of more urgent tasks and immediate needs. We republish the following article on the matter, written by Fozil Mashrab:
At a recent government meeting (March 24) devoted to modernizing Uzbekistan’s energy infrastructure, President Shavkat Mirziyoyev announced that in 2021 alone more than $ 1.1 billion would be allocated to modernization of the country’s inefficient and obsolete electricity grid and crumbling natural gas distribution system. Energy Minister Alisher Sultanov pointed out that the energy sector has never received such significant funding to address the crippling problems that have accumulated over many years (Gazeta.uz, March 25). .
Throughout this year, more than 15,000 kilometers of electricity transmission lines and 4,000 electrical substations will be renewed, as well as 958 kilometers of gas networks and 3,232 gas distribution points will be completely overhauled. Most of this energy infrastructure was built in the 1950s and 1960s and absolutely needs to be modernized. However, all of these government-funded upgrades will represent less than 15 percent of all of Uzbekistan’s electricity and gas infrastructure in need of repair; this level of work will therefore have to continue for years before a significant positive impact at the national level becomes easily noticeable. Millions of people in Uzbekistan face chronic blackouts and blackouts, mainly due to wasted and inefficient energy infrastructure (Kun.uz, March 24; see EDM, January 28).
As the government, apparently, finally begins to seriously tackle the long neglected problems in the energy sector – a huge task that will require billions of dollars in investment for many years to come – the question arises of Whether sufficient resources will be left for Uzbekistan to simultaneously pursue its plans to build a nuclear power plant in collaboration with the Russian Rosatom Agency. A bilateral framework agreement for the construction of a nuclear power plant was concluded in December 2017, a year after President Mirziyoyev came to power (see EDM, July 10, 2018). Since then, however, disagreements over the cost of the nuclear power plant have prevented any finalization of the deal.
It is estimated that the project will require between $ 10 billion and $ 13 billion, which would put enormous pressure on the budget of the Central Asian country. Even though the initial funding can be provided by Rosatom in the form of a loan from the Russian government, this remedy could still be extremely unpopular with the Uzbek public, already concerned by the sharp rise in foreign borrowing under the Mirziyoyev regime. (Review.uz, March 10, 2021).
From 2016, when Mirziyoyev took over the leadership of the country, until the COVID-19 pandemic hit in 2020, Uzbekistan’s foreign bonds increased from $ 14.7 billion to $ 33.8 billion, which corresponds to more than 50% of the national GDP per year. The government plans to borrow an additional $ 5 billion in 2021, further increasing the sovereign debt burden of a country that continues to face the negative consequences of the pandemic-induced economic slowdown. Despite assurances from Uzbek officials and foreign experts affiliated with various international financial institutions, concerns about the viability of these loans persist at the national level, among the general public (Spot.uz, March 26).
In addition to financial risks, concerns about the safety of the proposed nuclear power plant have only recently increased. Last year’s collapse of the government-built Sardoba dam in Uzbekistan’s Sirdarya province, which affected hundreds of thousands of people (see EDM, January 28), is likely to push public opinion to do not build a nuclear power plant. The widespread fears that the government is short-sighted naming interest groups, especially those known for their shortcuts and shoddy work, to undertake the construction of such a sensitive object could certainly materialize as the Nepotism and crony capitalism have increased in Uzbekistan in recent years. (Regnum, May 1, 2020).
In contrast, neighboring Kazakhstan has so far resisted persistent offers from Russia to build a nuclear power plant on its territory. In Kazakhstan, as in Uzbekistan, the general public is also concerned that building a nuclear power plant with a loan from the Russian government could lead to a debt trap. At the same time, the Kazakhstanis fear that the acceptance of the construction of this project could give Russia another strong reason to consolidate its footprint in the country by opening a new military installation under the pretext of ensuring the security of the plant. nuclear. All of these technological and security dependencies would surely strengthen Russia’s influence over these resource-rich Central Asian republics for years to come (Azattyq-ruhy.kz, February 26).
The Kremlin has reportedly delayed President Mirziyoyev’s planned official visit to Russia since the summer of 2020 due to lack of progress in negotiations over the nuclear power plant. As a result, various other issues on the bilateral agenda which are of great importance to Uzbekistan remain unresolved. One of these outstanding issues is Tashkent’s desire to reduce the number of scheduled direct flights between the two countries to pre-pandemic levels and, therefore, to allow Uzbek citizens to travel freely to the United States again. Russia for work and study (Vesti, February 27).
Uzbekistan’s Foreign Minister Abdulaziz Kamilov visited Moscow from March 1-2, 2021. And during the visit, both sides announced that President Mirziyoyev’s long-delayed trip to Moscow will take place on an unspecified date before the end of the year. The Russian Foreign Ministry, in its statement on the subject, said more than 30 bilateral agreements are expected to be signed during the visit; and in particular these will include an agreement on the construction of a nuclear power plant in Uzbekistan (Podrobno.uz, March 2). Kamilov, in turn, informed that the Moscow summit will likely take place after the presidential elections in Uzbekistan, scheduled for October 24 (Gazeta.uz, March 2). Mirziyoyev is expected to easily win another term as he currently faces no real opposition.
For the time being, the Uzbek government remains discreet and discreet about its plans for a nuclear power plant. It is quite possible that President Mirziyoyev does not want this deeply contentious and divisive issue to feature prominently during the election campaign. Yet various media leaks indicate that the immediate reason for the procrastination to reach a final deal on the nuclear power plant has to do with the inability of the two parties to agree on mutually acceptable terms and conditions as well as the cost. end of the project rather than that of Uzbekistan. government having doubts (Vesti, February 27).
By pursuing plans to build a nuclear power plant, Tashkent’s priorities are arguably deviating from the most pressing concerns facing the country. Intuitively, the modernization of Uzbekistan’s decaying energy infrastructure network should be tackled first. Grandiose plans to build a nuclear power plant with Russian loans can, on the other hand, become a heavy burden on the country’s finances and come at the expense of more urgent tasks and immediate needs.
This article was originally published by Eurasia Daily Monitor of the Jamestown Foundation