Ўзбекистон иқтисодчилари XIII форуми

Background. 
In developing countries, the electricity supply is primarily perceived as unreliable, 
inefficient, susceptible to various disruptions leading to significant losses for businesses [9]. Fakih et al. [9] 
attributes such characteristics of power supply in developing economies to poor infrastructure, ineffective 
privatisations, lack of public investments, high fuel costs, and the degree of corruption. Pless and Fell [10] 
stressed out that incidence of bribery can negatively affect both electricity supply quality and annual sales.
As reported by Fakih et al. [9], the frequency of electricity disruptions in Eastern Europe and Central 
Asia region is higher than its counterparts, such as Latin America and Caribbean as well as other high-
income countries, but less frequent compared to outages observed in South Asia, Middle East and North 
Africa, and Sub-Saharan Africa. 
Both state-regulation of Uzbekistan’s energy sector and outdated energy systems are inherited from 
the former Soviet Union—the result of persistent lack of energy sector investments, which lasted three 
decades [11]. In Uzbekistan, there are still areas deprived from electricity infrastructure [12], while others 
are suffering from unstable electricity supply and insufficient limits for household electricity consumption 
[13]–[18]. There are many cases of new production facilities unable to roll out their operations since those 
units were not provided with sufficient electricity over long period of time, increasing cost of doing business 
and discouraging investment attractiveness of Uzbekistan [19], which were exposed to the public [20]. 
The disruptions in electrical energy and natural gas throughout the country urged government 
authorities to account to citizens for outages. According to the Ministry of Energy, these electricity 
disruptions are attributed to energy system overloads resulted from growing demand depending on a season 
[18], [21]–[23], though excuses are persistent despite this issue being raised multiple times by the Prime 
Minister and Parliament [24], [25]. They furthermore pointed up emerging obstacles resulted from water 
scarcity to generate sufficient energy, which are similar to those observed in Southern African countries in 
which generation facilities severely affected by droughts reducing significantly output at hydro plants and 
outdated coal-dependent generators requiring frequent maintenance [26]. Nevertheless, to satisfy steadily 
growing demand to electricity, Ministry of Energy of Uzbekistan focused on investment projects that are 
expected to generate additional 1.25 GWh electricity with the assistance of ADB [25], [27].
Given these conditions, the President of Uzbekistan has emphasised the importance of eliminating 
the electricity outages experienced by entrepreneurs in 2021 [28]. As government measures have been 
becoming less effective due to growing demand to power supply, there is an urgent need for private 
initiatives and involvement. In this context, the Presidential Resolution PQ-4422 as of 2019-08-22 on 
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improvement of energy efficiency of economic sectors, introduction of power-saving technologies and 
development of renewable energy sources as well as the Resolution of the Cabinet of Ministers #217 on 
compensation of funds spent on purchasing energy-effective and power-saving equipment. Similarly, the 
Government programme for 2021 includes the development of a roadmap on creating a wholesale market of 
electrical energy and natural gas. 
These cases point up the existence of considerable barriers to access electricity infrastructure which 
can be a sign of energy poverty—a case when households cannot afford energy services, such as lighting, 
cooking, and heating, to satisfy primary needs and do basic daily routines [29]. A broader definition of 
energy poverty, which Uzbekistan has been possibly experiencing, is “the absence of sufficient choice in 
accessing adequate, affordable, reliable, high quality, safe and environmentally [friendly] energy services to 
support economic and human development” [30]. 
Electricity disruptions and outages not only negatively affect household living conditions, but also 
business opportunities and performance. Affected firms face output losses, which could have been produced 
or services provided. Research studies stress out electricity disruptions negatively affect firms’ productivity 
and production efficiency [6], [9], [31], [32]. Abeberese et al. [32]’s estimates suggest that reducing the 
number of days in a month with electricity outages from average to the level of developed countries (0) 
would increase productivity by roughly 10%. In Uzbekistan, some entrepreneurs claim a firm’s profits could 
have been as twice as high if there were reliable electricity supply [33]. Firms not only suffer from missed 
business opportunities, but also incur additional costs arising from electricity outages related to storage of 
items requiring special treatment [34]. 
On average, firms in Uzbekistan experience two incidents of power outage in a month (