INVESTMENT IN THE ENERGY SECTOR AND GDP ENERGY INTENSITY IN UZBEKISTAN: AN ECONOMETRIC ANALYSIS, 2011–2023

This study investigates the relationship between investment in the energy sector and GDP energy intensity (EI) in Uzbekistan over 2011–2023, combining descriptive analysis of investment dynamics with OLS log-linear regression. Total fixed capital investment grew 14.4-fold and foreign investment 26.6-fold over the period; the energy sector's share of total investment rose from 79.2% to 88.0%, reflecting the strategic prioritisation of energy infrastructure. In levels, investment in the energy sector exhibits near-perfect negative correlation with EI (r = −0.997), suggesting a strong long-run co-movement. However, OLS estimation in first differences — required to eliminate non-stationarity confirmed by Dickey–Fuller tests — reveals that the investment elasticity of EI (β = −0.024) is statistically insignificant (p = 0.65), while the GDP elasticity (γ = −0.832) remains highly significant (p < 0.001). This finding implies that investment and EI share a common long-run trend driven primarily by GDP growth, but that investment does not constitute an independent short-run determinant of energy intensity once GDP dynamics are controlled for. A scenario analysis to 2030 shows that EI targets consistent with SDG 7.3 (≥3.4%/year reduction) are achievable under moderate and intensive scenarios, but their realisation depends principally on sustaining GDP growth and restraining energy consumption rather than on the volume of energy investment per se.