The Ministry of Economy and Finance of Uzbekistan has announced plans to introduce a new methodology for calculating tariffs for electricity and natural gas. This involves the Regulatory Asset Base (RAB) methodology, where tariffs are set not only based on current costs but also considering the value of regulated assets such as networks, equipment, substations, and gas pipelines.
According to the ministry, the introduction of RAB should be part of energy sector reforms aimed at strengthening energy security, improving operational efficiency, and attracting long-term investments. Against the backdrop of growing demand and the need to develop infrastructure, creating a transparent regulatory framework for pricing is becoming increasingly important.
The RAB methodology is expected to make pricing more transparent for consumers and regulated enterprises, as well as increase the predictability of tariff policy. It is believed to improve the financial condition of fuel and energy complex enterprises, raise their credit ratings, and encourage financial reporting in accordance with international standards.
Modernization and expansion of energy systems require significant capital investments. A transparent regulatory base is expected to boost investor confidence and create opportunities for attracting local and international financing. The next stage involves the gradual introduction of long-term regulation tools: initially, the tariff regulation period will be one year, later gradually extended to five years.
According to preliminary data, the regulatory asset base will include fixed assets, intangible assets, and working capital. Assets will be determined based on financial statements prepared under IFRS. However, assets received free of charge, construction in progress, and equipment not commissioned on time will not be included in the RAB base.
Operating expenses will be reviewed by the regulator as part of tariff applications, taking into account inflation. The weighted average cost of capital (WACC) will be 14-16% after taxes, depending on the enterprise. After the revision of tariffs for 2024-2025, prices are expected to approach the level of self-sufficiency.
Following the introduction of the new methodology, the cost of electricity generation is forecast to rise by about 9%, transmission services by 30%, electricity distribution by about 10%, and natural gas distribution by about 23%. These forecasts apply to individual chain links, not directly to final consumer tariffs.
The excess of costs over final tariffs is planned to be compensated from the state budget. For the company that has taken over the management of regional power grids, RAB-based regulation could become a mechanism for recovering investments. Igor Alekseev, Managing Director and Partner at Boston Consulting Group, stated in October 2025 that the introduction of tariffs under the RAB methodology is scheduled for 2027-2028.
Source: www.gazeta.uz