Europe Finances BRI 2.0 Development in Uzbekistan, Propelled by China-Saudi Collaboration

The European Bank for Reconstruction and Development (EBRD) is taking steps to reform public procurement, with a focus on reviewing procurement policies and rules in 2025. This move is part of a broader effort to promote transparency and efficiency in the region.

One of the flagship projects driving this change is the Bash-Dzhankeldy wind power project, Central Asia's largest with a capacity of one Gigawatt. The project, which came online earlier this year, is not only a significant milestone for Uzbekistan's renewable energy sector but also a symbol of Saudi Vision 2030 and China's infrastructure-building ambitions.

The Bash-Dzhankeldy project is dominated by two Gulf firms, ACWA Power and the UAE's Masdar, with state-owned China Southern Power Grid owning a 35 percent stake. The project was packaged by Saudi developer ACWA Power and bankrolled with European debt, with the European Union and cooperating local or regional partners serving as direct financiers, although specific entities are not publicly detailed.

Chinese firms have been heavily involved in the project, winning 14 of the 18 Engineering, Procurement, and Construction (EPC) contracts announced to date. Nine of these projects were awarded through transparent auctions, but the government has since pivoted towards direct negotiations with power producers.

This trend is not unique to the Bash-Dzhankeldy project. Chinese firms have won over EUR 1 billion worth of contracts for EIB-funded projects in countries outside the EU, with eleven of these involving European public finance - mostly through the EBRD, but also the EIB and state funds from Germany, France, and the Netherlands.

The success of the Bash-Dzhankeldy project has set a precedent for future renewable energy projects in the region. For instance, a 1.1 GW wind project is being developed in Egypt by ACWA Power and minority partner HAU Energy, with Chinese-made turbines and backing from the EBRD.

Beijing's new model for the Belt and Road Initiative (BRI) includes more equity from Chinese firms and more international collaboration. This is evident in the Silk Road Fund's 49 percent ownership of ACWA Power's RenewCo platform, giving it exposure to all post-2019 Saudi solar and wind assets. Clean energy is a cornerstone of deepening China-Saudi cooperation.

Since 2019, Uzbekistan has signed 26 power-purchase agreements for solar and wind projects, aiming for a 40 percent renewables share in electricity generation by 2030. In this endeavour, ACWA Power and Masdar have been the frontrunners, winning 19 of the 26 projects.

This renewable energy revolution is a testament to the growing collaboration between European institutions, Chinese firms, and Gulf partners in promoting sustainable development and combating climate change. As these partnerships continue to evolve, we can expect to see more groundbreaking projects like the Bash-Dzhankeldy wind power project in the years to come.

Europe Finances BRI 2.0 Development in Uzbekistan, Propelled by China-Saudi Collaboration