Eurasia is a heterogeneous region in energy terms, containing major fossil fuel producers and exporters, as well as countries like Georgia, Tajikistan, and Kyrgyzstan that obtain around 85% of their electricity from hydro sources. The overall share of natural gas in the energy mix is one of the highest in the world, but gas infrastructure is ageing and often poorly maintained.

The region has been hit hard by energy instability in recent years. Ukraine’s energy infrastructure has been targeted by Russian forces following the 2022 invasion. High prices have had widespread impacts on energy-importing countries and traditional energy relationships between countries have been shaken.

Levels of energy investment in Eurasia have stalled in recent years at around USD 110 and USD 120 billion per year, with around 80% of this going to fossil fuels. At around USD 20 billion, annual clean energy spending in the region is far below its potential, the result of significant obstacles that include pervasive fossil fuel subsidies and policy frameworks that are generally weak and unclear.

The global energy crisis has prompted rising interest in the potential for clean energy. Azerbaijan’s hosting of the COP29 summit in 2024 presents an opportunity to give new momentum to energy transitions through efforts to scale up clean power and to reduce emissions from fossil fuels. Five countries in the region have set net zero targets: Armenia ,Georgia and the Kyrgyz Republic aim to achieve net zero emissions by 2050. Russia and Kazakhstan have set a target of 2060. Except for Russia, all countries in the region have signed the Global Methane Pledge.

Getting on track to achieve these commitments requires a steady increase in energy investment. In the APS, energy investment is projected to reach around USD 145 billion by 2030, with the share of clean energy investment reaching more than one third.

The oil and gas investment picture is subject to a high degree of uncertainty. Russia is looking to compensate for the loss of European markets by seeking out new markets in China and South Asia. This has largely succeeded for oil but putting in place new export infrastructure for gas has proved to be much more difficult. Russia has stepped up its bilateral agreements with Eurasian countries, however, including plans for fossil fuel and nuclear plant projects. In 2023, Russia signed an agreement with Kyrgyzstan for the construction of a new coal-fired plant (660 MW). As part of its push to open up new markets, Russia has also been seeking oil and gas supply and transit arrangements with Central Asia.