Monochrome by Centil: Ripples

This week there were a few space-time ripples that led to significant impacts for the region.

Kazakhstan is preparing to ship 20,000 tonnes of crude to Germany. In a filing to Russia’s Transneft, KazTransOil declared that the shipment of oil will take place via the Druzhba pipeline to the Adamova Zastava delivery port. Still, London-based Fitch rates sees potential risks rippling for oil exports over Russia’s part of the CPC pipeline, as there are no viable alternatives to ship the Kazakh crude to the EU, a sentiment that is shared by Exxon, according to its latest securities filings.

Mr Usmanov’s consolidation causes continuous ripple effects in Uzbekistan. First, the oligarch’s USM Holding took control of a joint venture that was initially set up together with Megafon and the Uzbek government to control Ucell, the telecom company that TeliaSoneira sold to the state in 2018, the digital marking company CRPT Turon and ICS Holding, working in the energy sector. Now, the ambitious Uzum project that is gearing to become a neobank and marketplace in one, is taking one of the largest Uzbek private banks into its holding structure.

Egypt and Uzbekistan are cosying up to one another. Preceding President Mirziyoyev’s official visit to Cairo, 7 MoUs exceeding $1.6 bn in value were signed during the Egyptian-Uzbek Business Forum touching a variety of sectors, including energy, healthcare and pharma. In particular, Egypt’s Orascom stepped forward with intentions of taking part in the construction of an industrial park for the production of chemicals and construction materials, as well as developing a 100 MW PV station.

Meanwhile, the biggest deal came from China’s $2 bn move on Uzbekistan renewables sector. Following the decision by China Energy Engineering Corp to develop three PV projects in the Bukhara, Samarkand and Kashkadarya regions with a 2 GW capacity, an additional 2 GW green project is set to be developed by a consortium of Huaneng Renewables Corporation and Poly Technologies in Jizzakh and Tashkent regions. A cherry on this pie was Uzbekistan’s request to buy 700 busses from two Chinese producers.

An unusual decision sent ripples in Kyrgyzstan, as President Japarov convened a meeting with his predecessors in Dubai. Those familiar with Bishkek’s past will remember the names of Akayev, Bakiyev, Otunbayeva, Atambayev, released from prison earlier in Feb, and Jeenbekov, as leaders of a country that went through many a change, some quelled with bloodshed, which culminated in the current leader taking office. The move, considered populist, was decried by Japarov as a way to pave the way to a peace and unity in the country.

Speaking of unusual, Uzbekistan’s state asset privatisation plans are in full swing. This week saw the sale of the Angren Pipe plant for $19.2m, but the newsworthy aspect came from the unorthodox buyer consortium – the country’s leading private insurance company Gross JSC and juice producer Nature Juice LLC. UzSAMA, the state asset management company, received five EoIs, and the final bidder was selected on the basis of the highest price offered for the state’s 100% stake. The company’s net profit for 2021 stood at $16.1m.

The ripple effect Turkey’s tragic path, the region felt the shockwave as dangerous earthquakes were felt in Tajikistan and Kazakhstan. The quake occurred in the early hours on Thursday, with the epicentre near the Gorno-Badakhshan region with a reported magnitude of 7.2, which was also felt in China’s Xinjiang region. Another, milder 4.1-magnitude quake was felt in southern Kazakhstan. No casualties were reported by the governments of either state.

Like ripples on water, murmurs of Russia’s strategy to subvert the region’s energy sector were exacerbated following a visit by Gazprom CEO to Turkmenistan. The opaque announcements afterwards led to speculations that Russia might be attempting to control natural gas flows to protect its political interests. In no way did the picture become clearer, therefore, after Asghabat’s decision to send a batch of 2,000 tonnes of liquified natural gas to Uzbekistan, free of charge.

To balance Chinese and Russian influences, US Secretary of State Anthony Blinken announced plans to visit Kazakhstan and Uzbekistan before heading to the G-20 summit in India. News came after China’s rare attempt at geopolitical intervention with a Russia-Ukraine ceasefire plan. It also ties to US’s wider strategy to counter Russia’s influence on energy in Central Asia, and USAID’s Deputy Admin’s earlier visit to Central Asia to affirm support follows said logic.

In a delicate balancing act, Russia sends a friendly warning, deploying fearmongering to solidify its influence. Cautionary tales of the West’s good intentions producing sour results, are juxtaposed with local security concerns like Afghanistan. An alternative is offered in the form of a stable, tightly knit and regionally unified allegiance, relying on existing security structures like the CSTO. Our outro is intentionally vague, to showcase the murky and confusing landscape that the Stans are having to navigate lately.

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