A region of sweeping river valleys, snow-capped mountains and arid steppes, Central Asia captivates the imagination with tales of nomadic tribes and Silk Road traders.
Made up of Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan and Kyrgyzstan, the region’s 76.7 million inhabitants occupy a vast expanse of land sandwiched between the Caspian Sea, Russia and China.
Its strategic location between Asia and Europe has long made it a major crossroads of international trade, with ancient cities such as Samarkand in Uzbekistan and Khujand in Tajikistan growing rich from the profits of the trading caravans that threaded through the region.
And, although these countries faced decades of isolation under the Soviet regime, since independence the region is returning to its historical roots as a hugely promising market.
The area boasts some of the most extraordinary natural wealth in the world, from bountiful supplies of oil and natural gas to rare minerals and precious metal reserves.
But the region also has great promise in sustainable energy, opening up exciting opportunities for British businesses specialising in the sector and, with the need for extensive modernisation of Soviet-era electrical infrastructure, there is also strong demand for battery storage and more efficient grid systems.
In particular, both Kyrgyzstan and Tajikistan are forging ahead with ambitious plans for hydropower, with the potential in the latter estimated to be around 527 billion kWh per year.
Tajikistan’s government has planned 50 small to medium-sized hydroelectric power stations, opening up the market for businesses specialising in construction, civil engineering and sustainable energy technology.
Uzbekistan also has tremendous potential for energy development, particularly in solar power. The country sees more than 310 sunny days a year, giving it an estimated potential of 2 trillion kWh per year.
The country’s government has earmarked at least $15 billion to hit a target of 12GW+ of renewable energy by 2030, creating a high demand for British businesses specialising in engineering and procurement, and renewable energy solutions supplies.
Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan all have a high volume of the minerals required for clean energy technologies, creating demand for sustainable mining solutions, technologies and services to reduce emissions throughout the production process.
The region is undergoing a radical shift in its banking and financial sector in an effort to fully modernise and adopt the latest technologies, creating an increasingly attractive environment for international businesses and foreign investors.
Uzbekistan has committed to privatising 75 per cent of state assets and 50 per cent of state banks by the end of 2025, and is set to conduct an initial public offering of the 15 largest state-owned enterprises by the end of 2024.
As such, there is high demand for professional financial services providers, from financial advisers to management consulting firms, auditors and law firms.
There is also a recognition that business practices must align with internationally recognised rules and regulations, particularly with the use of English common law in many commercial contracts. Real progress is being made to create an increasingly attractive and familiar environment that British businesses are uniquely placed to take advantage of.
Businesses establishing in the region can turn to the Astana International Finance Centre (AIFC), launched in Kazakhstan’s capital in 2018, which is a huge asset to de-risk entry into the market.
The AIFC’s court is based around the practices and principles of English Common Law. While independent of the country’s judicial system, its judgements are legally-enforceable and it has handled over 1,200 cases, including against the government.
Following Russia’s invasion of Ukraine and the resulting impact of international sanctions, Central Asia is once again finding itself as a corridor for the supply trains and trade routes linking Europe to Asia through the Caspian and Black Seas.
With trade steadily increasing across the region, the opportunities are plentiful for UK businesses to provide technology, services and material handling equipment to the major railway hubs, airports, seaports and border crossings.
While there is progress to be made, particularly in the region’s rural and traditional areas, the region’s strong economic outlook and ambitious path of business reform means there has never been a better time to do business.
Source : Telegraph