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BWA Global Insights: Business Opportunities in Turkmenistan

Von 6. Januar 2025Februar 10th, 2025No Comments

BWA Global Insights: Business Opportunities in Turkmenistan

06. Januar 2025, Timo Bey – Senator of the Federal Association for Economic Development and Foreign Trade (BWA Global Economic Network) ©BWA, Berlin 2024

The Turkmenistan Investment Forum and Exhibition (TIF 2024) provided me an invaluable platform for engaging with local entrepreneurs, international companies active in Turkmenistan, and government officials. This unique opportunity allowed for the exchange of information and insights into the country’s evolving business landscape.

Turkmenistan is currently undergoing an exciting transformation. The nation appears to be opening up further and actively seeking collaboration and cooperation with foreign partners. This shift presents numerous opportunities for international businesses looking to expand their operations.

Interview on our international business activities in Turkmenistan at the Turkmenistan Investment Forum and Exhibition (TIF 2024).
Quelle: BWA Global Economic Network

One of the most compelling advantages Turkmenistan offers is its low energy prices and available land supported by good infrastructure. These factors make it an attractive destination for international expansion, particularly for innovative deep tech companies from Europe. Many energy-intensive business models that are challenging to sustain in Europe, especially Germany, due to high energy costs, could potentially thrive in Turkmenistan without the need for cross-subsidization. Such international establishments could yield positive effects for both economies.

For businesses looking to establish operations in Turkmenistan, a Public-Private Partnership (PPP) is generally recommended. This approach allows companies to work in collaboration with the government, offering several advantages:

  1. Enhanced cooperation: PPPs facilitate direct collaboration with government entities, streamlining processes and decision-making.
  2. Access to resources: Partnerships with the government can provide access to land, infrastructure, and other essential resources.
  3. Regulatory support: Working closely with the government can help navigate the regulatory landscape more effectively.
  4. Local knowledge: Government partners can offer valuable insights into local markets, customs, and business practices.
  5. Risk mitigation: Shared responsibilities in a PPP can help distribute risks between private and public sectors.

These factors, combined with Turkmenistan’s strategic location and abundant natural resources, make it an increasingly attractive destination for international businesses seeking new opportunities for growth and expansion.

Turkmenistan presents compelling opportunities for deep tech companies and energy-intensive enterprises, offering a unique combination of low energy costs, abundant natural resources, and a growing focus on innovation.

Among the various business models that could thrive in Turkmenistan, two particularly promising examples are Green Hydrogen Production and Advanced Materials Manufacturing.

Turkmenistan’s abundant natural gas resources make it an ideal location for large-scale green hydrogen production. Companies could leverage the country’s low-cost natural gas as feedstock, capitalizing on the growing global demand for clean hydrogen. This aligns well with Turkmenistan’s sustainability goals and could attract significant government support.

Similarly, the energy-intensive processes involved in Advanced Materials Manufacturing become more economically viable in Turkmenistan due to the low energy costs. Firms could set up facilities for producing cutting-edge materials, benefiting from both the cheap energy and access to raw materials from the local petrochemical industry. This sector also presents opportunities for integration with Turkmenistan’s existing industrial base. These are just two examples of the many potential business models that could be successfully implemented in Turkmenistan, taking advantage of its unique combination of resources and strategic location.

By establishing operations in Turkmenistan, these companies not only benefit from cost advantages but also position themselves as pioneers in an emerging tech ecosystem. This early-mover advantage could be crucial in shaping the future of technology development in Central Asia and beyond.

Recent developments signal positive prospects for stronger cooperation between the EU and Turkmenistan:

  1. German Chancellor Olaf Scholz’s recent conversation with Turkmenistan’s President Serdar Berdimuhamedow indicates growing diplomatic engagement between Europe and Turkmenistan. This high-level dialogue suggests an increasing recognition of Turkmenistan’s strategic importance.
  2. The European Green Deal presents opportunities for collaboration:
    a. It aims to achieve zero emissions by 2050, making Europe the first climate-neutral continent.
    b. This new growth model, based on a clean and circular economy, aligns with Turkmenistan’s own sustainability goals.
    c. The Green Deal policy positions Europe as a prime destination for investments that bring stable, future-proof quality jobs, which could benefit Turkmenistan through knowledge transfer and economic partnerships.
  3. EU Strategy on Central Asia
    The 2019 EU Strategy on Central Asia provides a framework for enhanced cooperation:
    a. It aims to support sustainable development based on democracy, good governance, and human rights.
    b. The strategy focuses on boosting trade and investment between the EU and Central Asia, including Turkmenistan.
    c. It has three main priorities: resilience, prosperity, and working better together.
Discussion with the United Nations about the Formation of national mechanisms for financing the Sustainable Development Goals (TIF 2024)
Quelle: BWA Global Economic Network

These developments collectively indicate a growing recognition of Turkmenistan’s importance in the EU’s strategic outlook for Central Asia, paving the way for increased economic, political, and environmental cooperation.

Turkmenistan has demonstrated a strong commitment to achieving the Sustainable Development Goals (SDGs), signaling positive steps towards a sustainable future. The country’s efforts span across multiple SDGs, including clean water and energy, economic growth and innovation, sustainable cities and communities, and responsible consumption and production. By implementing projects in renewable energy, establishing e-government systems, developing inclusive policy frameworks, and promoting science and innovation, Turkmenistan is actively aligning its economic development with sustainability principles. The 2021 law „On Renewable Energy Sources“ and the national strategy until 2030 exemplify the country’s dedication to balancing economic progress with environmental protection. These comprehensive initiatives, coupled with the establishment of specialized centers and the construction of efficient power plants, showcase Turkmenistan’s holistic approach to implementing the SDGs. As the country continues to position itself as an active participant in global sustainability efforts, these endeavors provide encouraging signs for Turkmenistan’s sustainable future and its potential to contribute positively to regional and global sustainability goals.

With our company, 8 Impact GmbH, we are currently developing a Public-Private Partnership (PPP) with the Turkmenistan Technopark (Türkmenistanyň Ylymlar akademiýasynyň Tehnologiýalar merkezi) to strengthen the innovation ecosystem. Our planned initiative is an Innovation Hub aimed at enhancing the innovation ecosystem within Central Asia through international collaboration.

The Innovation Hub initiative in Turkmenistan is designed to achieve multiple strategic outcomes while aligning closely with the country’s national priorities. By supporting Turkmenistan’s efforts to diversify its economy beyond natural resources, the project aims to enhance the local workforce’s capabilities in technology and innovation. This focus on skill development is crucial for creating a knowledge-based economy and preparing the population for future job markets. The hub is also designed to create an environment that appeals to international investors and companies, thereby attracting foreign investment and expertise. Moreover, the initiative places a strong emphasis on sustainable development, ensuring that innovation efforts are in harmony with Turkmenistan’s sustainability goals.

The Innovation Hub will serve as a central point for innovation across Central Asia, with Turkmenistan as its base. It aims to foster partnerships between local entrepreneurs, international companies, and academic institutions, facilitating the exchange of ideas, best practices, and technologies between Turkmenistan and global innovation centers. The hub will provide resources, mentorship, and funding opportunities for local startups to grow and scale, while also encouraging R&D activities that address regional challenges and leverage local strengths.

This comprehensive approach aligns seamlessly with Turkmenistan’s vision for economic development and its aspirations to integrate more closely with the global economy. By leveraging the Public-Private Partnership model, the project benefits from both public sector support and private sector expertise, creating a robust foundation for success. Ultimately, the Innovation Hub represents a significant step towards positioning Turkmenistan as a key player in the Central Asian innovation landscape, fostering economic growth, and creating valuable opportunities for international cooperation.

Signing Ceremony of the MOU between 8 Impact and Türkmenistanyň Ylymlar akademiýasynyň Tehnologiýalar merkezi on December 17, 2024
Quelle: BWA Global Economic Network

With our company 8 Impact we just started our partnership with the Turkmenistan Technopark, formalized through a Memorandum of Understanding (MOU) signed on December 17, 2024. This collaboration represents a significant milestone in our commitment to fostering innovation and technology development in Turkmenistan.

Our partnership with the Turkmenistan Technopark aims to create a robust framework for enhancing research and development initiatives within the country. We are dedicated to supporting local entrepreneurs and startups by offering mentorship and resource allocation, which are crucial for nurturing a vibrant entrepreneurial ecosystem. The MOU outlines key objectives that include facilitating knowledge transfer between local and international stakeholders, thereby positioning Turkmenistan as a competitive player in the global technology landscape.

The scope of our cooperation is comprehensive, encompassing joint projects, training programs, and the promotion of sustainable practices across various sectors. To ensure effective implementation, we will establish a joint steering committee that will oversee progress and maintain alignment with national priorities. This structure will facilitate continuous dialogue and collaboration among all stakeholders involved.

At 8 Impact, we believe that innovation is essential for economic diversification and growth. By empowering local entrepreneurs and enhancing technological capabilities, we aim to contribute significantly to Turkmenistan’s strategic goals. Our commitment to fostering a vibrant innovation ecosystem aligns with the country’s aspirations for modernization and integration into the global economy.

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Author:

Timo Bey is Senator of the Federal Association for Economic Development and Foreign Trade (BWA Global Economic Network).

This publication, including all content, has been compiled with the greatest scientific care. Nevertheless, BWA Global Economic Network and the authors assume no guarantee and no liability for the topicality, correctness, completeness and quality of the information provided. The publication reflects the personal views of the authors and not necessarily those of the publisher.
© BWA, Berlin 2024.

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