Sustainable development of the Uzbek and Tajik power sectors offers attractive opportunities for both countries, i.e. in terms of improved security of electricity supply and increased use of renewable energy sources, along with reduced greenhouse gas emissions and air pollution. Moreover, potential economic benefits arise from enhanced bilateral electricity trade. This report summarises the critical factors, affecting the envisaged development. The present status of the power sectors is discussed, including generation and consumption characteristics, and legal frameworks. Technical deficiencies are addressed, together with anticipating legislation, fostering modernisation of power system assets. Renewable energy potential in both countries is considered, with focus on hydro, solar and wind energy. Policies towards increased use of this potential are presented. Emphasis is given to ongoing and planned investments in electricity generation and transmission infrastructures, towards efficient and clean power systems, and enhanced electricity trade between both countries.