Artificially low electricity prices are causing a major funding crisis in Central Asia’s energy industry, according to the authors of the newly released report. While these subsidies make power affordable for residents, they prevent utility companies from earning enough money to maintain aging power plants or attract the private investment needed for modernization.
The report states that “the downside of the low tariff policy has been chronic underfunding of the industry and distortion of price signals,” and notes that “tariffs below cost recovery level remain a key barrier: low electricity tariffs undermine the sector’s investment attractiveness.”
In simple terms, the region is stuck in a trap where the price consumers pay for electricity does not cover what it actually costs to produce and deliver it. Because energy companies are often forced to sell power at a loss, they lack the cash to fix broken equipment, reduce wasteful line losses, or build modern, cleaner facilities. This creates a cycle of decaying infrastructure and frequent blackouts, even as the region’s demand for power continues to surge.
The report “Power Sector of Central Asia: Modernization and Energy Transition” was published by the Eurasian Development Bank in Almaty in 2026. Authored by a team led by Evgeny Vinokurov, it explores the region’s energy challenges through the lens of the energy trilemma. The study proposes a pragmatic “middle path” to balance energy security, affordability, and sustainability amid a rapidly growing demand and aging infrastructure.
