Central Asia 2025 The Digital Silk Road of Energy

Expert: Roman Yashin, Director of Softline Group in Central Asia

In the context of energy shortages and growing ESG requirements, investments in digital infrastructure are becoming a source of strategic advantage for Central Asia. Digital twins, drones for monitoring gas networks, and blockchain payments are forming a new digital "Silk Road", where energy technologies are the key commodity.

This is a clear signal for the global market: the region is actively diversifying its raw materials economy, striving to take its place among the technological leaders capable of shaping the energy industry of the next decade.

Why Central Asia is in the spotlight today

The region's technological leap hides a less obvious reality: the era of energy abundance is ending.

As of 2024, Kazakhstan maintains oil production at the level of 88 million tons per year, mainly due to Tengiz, Kashagan and Karachaganak. However, over 70% of the volume is exported, while there is a growing shortage of refining within the country: about one million tons of Russian petroleum products are imported annually.

The gas sector looks no less contradictory: production is growing, but it is being absorbed by domestic demand, which has grown by 9% in just the last year.

Uzbekistan is facing a sharp decline: since 2019, gas production has fallen by 15 billion cubic meters, reaching 45 billion cubic meters in 2024. The historical transition to the status of a net importer has presented the country with a difficult choice – how to allocate resources between the growing domestic deficit and previously assumed export commitments.

These multidirectional processes add up to a common picture for the region: according to official estimates, the cumulative shortage of generating capacity by 2030 may exceed 6 GW, which is about the amount produced by several large thermal power plants. The construction of power units and the modernization of networks are not keeping pace with the growth in demand. In these circumstances, technology is becoming the main tool for maintaining operating margins and a key argument for investors who no longer believe in the "raw materials fairy tale."

The new logic of the region's energy sector

Central Asia is making a strategic maneuver: it is turning its transit potential into a lever for gaining technological sovereignty. The diversification of export routes is now inseparable from the creation of a digital infrastructure that ensures transparency and manageability of energy flows. Control over this system is a resource no less important than the pipelines themselves.

Kazakhstan is increasing exports through Baku–Tbilisi–Ceyhan and across the Caspian Sea, Uzbekistan is opening a southern route through Turkmenistan and Iran, and China, in turn, is integrating a digital layer into the Belt and Road initiative – fiber-optic lines, sensors and monitoring systems. This is how the infrastructure is being formed, where energy and digital technologies are developing interconnected.

Not only the geography of supplies is changing, but also the mechanisms of cooperation. Kazakhstan and Uzbekistan, implementing the KazMunayGas–Uzbekneftegaz agreement, are moving towards the harmonization of standards and the creation of a single electronic database of manufacturers. This work is being carried out within the framework of the Industrial Cooperation Action Plan for 2025-2027.

The creation of this complex infrastructure stimulates the development of related industries. First of all, this creates a large-scale market of IT services for the energy sector itself, from grid management systems to gas processing software, with a volume of up to $3 billion.

At the same time, the demand for technologies dictated by the global agenda is growing. The key areas here are blockchain for cross-border settlements and methane emission monitoring systems.

Digitalization as a condition for energy security

While new routes diversify exports, digital technologies help compensate for the growing gap between supply and demand in the energy market. We are no longer talking about pilots, but about working solutions that increase the return on existing assets.

At Tengiz, the field’s digital twin has enabled improvements in production efficiency through more accurate reservoir modeling. At Kashagan, AI-driven drilling optimization has helped reduce operating costs and accelerate geological data interpretation.

In Uzbekistan, the priority has shifted to digital infrastructure management. The introduction of cloud-based SCADA systems and unmanned monitoring has reduced the response time to accidents, a critical parameter for compensating for falling production due to network efficiency.

These examples illustrate a general principle: when the construction of facilities requires billions of dollars in investments and many years of planning, it is the digitalization of existing assets that protects the region from energy shortages. Extensive growth is being replaced by precise management – this is the new formula for energy security in the region.

The climate challenge as a new reality

At the current stage of its development, the Central Asian energy sector is facing the challenge of global decarbonization. The countries of the region are forced to simultaneously solve two tasks at once: to maintain the profitability of the oil and gas sector and to develop clean energy markets.

Kazakhstan focuses on technological modernization of traditional assets, including through partnerships with international companies. For example, as part of joint projects with Chevron, KazMunayGas is implementing a program to reduce methane emissions by 15% by 2031 compared with 2019 levels. At the same time, the country is expanding its renewable energy capacity, aiming to increase its share in the electric power industry to 15% by 2030.

Uzbekistan is pursuing a more radical transformation through increasing the share of renewable energy sources. The national plan to reach 20 GW of capacity by 2030 may also create a basis for future renewable energy exports.

Investments and personnel

Any technological transformation is based not only on solutions and platforms, but also on people who are able to manage them. Therefore, the next frontier is to create conditions for investment and competence growth.

Uzbekistan is implementing a national digital transformation program. Priorities are shifting from increasing production to developing cloud services and creating data centers. Kazakhstan relies on an ecosystem approach: Astana Hub has become the largest startup platform in the region at the intersection of IT and energy.

The key limitation is the personnel shortage. In response to this challenge, countries are developing educational infrastructure. Tashkent IT Park and Astana Hub have training programs for engineers and specialists in artificial intelligence, and universities in Kazakhstan and Uzbekistan are launching joint courses on energy management and data analytics. These initiatives are creating an environment in which technology, investment, and education reinforce each other, creating a human and innovative foundation for the region's future energy sector.

Barriers as a new competitive advantage

The energy transformation of Central Asia is hampered by two factors – the heterogeneity of national regulatory regimes and the tightening of rules related to the course towards technological sovereignty. Their direct consequence was the postponement of the launch of the EAEU single energy market from 2025 to 2027; businesses have to adapt to a variety of inconsistent requirements and incur additional operating costs.

Similar contradictions are evident in the digital sphere. Kazakhstan requires storing critical information in national data centers, while Uzbekistan requires storing industry-specific data in the UzTransGaz cloud for at least 15 years. Because of this, data is locked up within national jurisdictions: exchange between systems is limited, and cross-border services cannot operate according to uniform rules. As a result, a mosaic of regulations is being formed, which hinders both the development of the common digital space and energy integration.

The situation is complicated by the fact that Central Asia is located at the junction of three regulatory systems – Russian technical standards, European environmental requirements and Chinese data formats. Companies have to simultaneously adapt to conflicting regulatory frameworks, which consumes significant resources and requires the highest degree of management flexibility.

At the same time, this experience makes local solutions universal, which means they are ready to scale outside the region – in Eurasia and the countries of the Global South. This is a strategic asset for companies: the ability to combine international and national practices creates a long-term competitive advantage.

Central Asia as a test site for global energy

In a few years, the region has gone from being a performer of other people's strategies to an independent participant in the energy transition. Here, the interests of states, companies, and technological ecosystems converge on one platform, and the pace of change forces the search for new management models.

The experience of Central Asia shows that new energy is born not so much from sources as from coordination mechanisms – digital and institutional solutions that allow the state, business and technology to operate in a single circuit. It is this ability to balance interests that makes the region valuable not only as an energy supplier, but also as a laboratory of management models for the global market.

This is the region's main contribution to the energy sector of the 21st century: Central Asia is no longer a periphery and is becoming a platform where the viability of the very idea of sustainable development is being tested.