Uzbekistan is opening a new chapter in its energy modernisation story, turning the Samarkand region into a long term testing ground for private sector leadership in power distribution. A presidential decree issued in mid August approves concrete measures for a public private partnership project that hands the modernisation and management of Samarkand’s electricity distribution networks to a Turkish operator.
Public private partnership reshapes regional energy landscape
Following an international tender concluded last November, Turkish company Aksa Enerji was selected as the private partner for the Samarkand distribution grid, marking one of the most ambitious foreign operated infrastructure projects in Uzbekistan’s energy sector to date. The project is structured as a public private partnership, with the state retaining ownership of the assets while delegating operational management and investment obligations to the private operator.
The partnership is designed not only to upgrade outdated networks but also to gradually reduce the role of the state in the economy. By bringing in a foreign operator under long term commitments, Uzbekistan aims to cut budget expenditures tied to network maintenance, foster competition in the electricity market and increase the quality and continuity of power supply for businesses and households in the Samarkand region.
Long term investment programme and local presence
Aksa Enerji has outlined a long horizon for its involvement in Samarkand’s power distribution system, with plans to invest around one billion dollars over three decades of network management. To implement the project on the ground, the Turkish group has already established a local company in Uzbekistan named AKSA Samarqand Electricity Distribution, which acts as the private partner and operational arm within the country.
On twenty nine January, the Ministry of Economy and Finance signed a state support agreement with the private partner, while the national operator Regional Electric Networks concluded the formal public private partnership contract. These documents lock in a detailed investment timetable and define the rights and obligations of both sides, providing clarity and predictability for long term capital deployment.
During the first twelve years of the project, Aksa Enerji and its Uzbek subsidiary must attract three hundred fifty seven million dollars in direct investment into Samarkand’s distribution infrastructure. The funds will be channelled into expanding the existing distribution system, modernising and reconstructing networks, and ensuring professional management and operation of the upgraded infrastructure. In the initial two years alone, the operator is obliged to invest at least twenty seven million dollars, signalling a rapid start to physical upgrades.
Efficiency targets and reliability gains for industry
A core objective of the Samarkand project is the systematic reduction of technical and commercial losses in the distribution networks, which today remain high by international standards. After a technical audit establishes the current level of annual losses, the operator will be required to reduce them step by step. If losses are found to be between twenty and twenty five percent, they must be cut by one point four percentage points each year during the operating period. If the starting level is between fifteen and twenty percent, annual reductions must reach zero point six percentage points.
These performance based targets tie investment obligations directly to measurable improvements in network efficiency. Lower losses mean more power ultimately reaches end users, which is critical for factories, construction sites, hospitality facilities and commercial centres that depend on predictable energy supply. By focusing on both modernisation and operational management, the project aims to secure uninterrupted electricity for the Samarkand region, reducing downtime risks for local industry and services.
Changing role of the state and improving investment climate
The decree and accompanying agreements signal Uzbekistan’s determination to move from a state dominated energy sector towards a more balanced model with strong private participation. Reducing direct government spending on distribution networks and lowering the state share in the economy are explicit goals of the project. At the same time, the authorities aim to use this partnership to build a competitive environment where independent operators can offer more efficient and higher quality services.
For the broader Samarkand region, this shift in approach has macroregional implications. Reliable and modern energy infrastructure is a key prerequisite for attracting new manufacturing plants, logistics hubs, construction developments and hospitality projects. As networks are expanded and upgraded under clear investment obligations, investors gain more confidence that future facilities will not be constrained by outdated or unreliable power distribution.
Why this matters for international furniture and construction players
For international companies in furniture production, interior and exterior solutions, construction, architecture and home appliance manufacturing, the Samarkand project offers a concrete signal that Uzbekistan is investing in the essential backbone of modern industry. Large scale improvements in power reliability and efficiency reduce operational risk for energy intensive manufacturing lines, modern retail formats, warehouse complexes and design driven hospitality projects. The presence of a long term foreign operator with clear investment and performance obligations suggests a more predictable and business friendly environment, making Samarkand and the wider region increasingly attractive for new plants, showrooms, logistics bases and cross border partnerships across the furniture, construction and interior design value chains.
