BAKU, Azerbaijan, December 30. Trend provides an overview of the key events that occurred in Kyrgyzstan's energy sector in 2023.
In 2023, Kyrgyzstan's energy sector saw remarkable progress with substantial investments from global organizations like the World Bank and the European Bank for Reconstruction and Development. Initiatives such as the Kyrgyz Renewable Energy Development Project received significant funding, aiming to upgrade the country's energy infrastructure and attract private investments while reducing greenhouse gas emissions. Partnerships with institutions like the Eurasian Development Bank and collaboration with China underscored Kyrgyzstan's commitment to enhancing its energy capabilities for sustainable growth.
Support from International Financial Organizations and Funds:
The World Bank
The World Bank (WB) announced in early July 2023 its commitment to providing $67.7 million in financial aid for the Kyrgyz Renewable Energy Development Project. This initiative aims to bolster the country's power transmission systems, expand energy generation capacity, and address the surging energy demand. Moreover, it seeks to attract private sector investments.
During its initial phase, the project will receive assistance from the Green Climate Fund through the Sustainable Renewables Risk Mitigation Initiative.
Expected outcomes from this phase include a rise in hydropower generation capacity by over 20 MW, an increment in variable renewable energy capacity by at least 100 MW, and a reduction in greenhouse gas emissions by 50.3 tons of carbon dioxide equivalent throughout the project's timeline.
The Kyrgyz Renewable Energy Development Project is structured to be implemented in multiple phases, with a total funding of $125.7 million allocated over a span of 10 years. The International Development Association (IDA) will fund the project, and the Kyrgyzstan Ministry of Energy will oversee the first phase scheduled from 2024 to 2028.
On November 1, the World Bank's Board of Executive Directors approved an additional $18.3 million for the ongoing Central Asia-South Asia Electricity Transmission and Trade (CASA-1000) project in Kyrgyzstan.
Taalaibek Ibraev mentioned during a meeting of the parliamentary committee on international affairs, defense, security, and migration that the CASA-1000 energy project is set to launch in May next year. He highlighted that Tajikistan has completed 99.9 percent of the project, and Pakistan also plans to finalize its part by next year.
CASA-1000 is an infrastructure project designed to transmit 1,300 megawatts of surplus electricity from Central Asian countries (Kyrgyzstan and Tajikistan) to high-demand electricity markets in South Asian countries (Afghanistan and Pakistan) by constructing new energy infrastructure.
In November, the Ministry of Finance of Kyrgyzstan and the WB signed an agreement providing technical assistance for the construction project of the Kambarata HPP-1. The WB provided $5 million to support this project by updating and refining its existing technical and economic feasibility study.
Finally, at the end of November, the World Bank's Executive Directors approved $50 million for the Air Quality Improvement Project in Kyrgyzstan. This project aims to mitigate air pollution and its detrimental effects on people's health and the country's economy.
The European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) allocated a financial package of 13.8 million euros for the rehabilitation and modernization of the Lebedinovskaya hydropower plant.
The package consisted of an EBRD sovereign loan of 8.8 million euros and an investment grant of 5 million euros.
The funds were provided to the state-owned hydropower operator of nine small HPPs in Kyrgyzstan, Chakan HPP Company.
According to the EBRD, the Lebedinovskaya HPP, commissioned between 1943 and 1948, provides power to Bishkek, but its equipment is in need of replacement.
Moreover, the EBRD granted Kyrgyzstan's National Electric Grid (NEGK) a sovereign loan of up to 9.2 million euros and an investment grant of 5 million euros. This support aims to facilitate the installation of advanced remotely controlled electric meters in Chuy, Jalal-Abad, Osh, and Issyk-Kul regions, alongside the rehabilitation of low-voltage (0.4 kV) distribution lines nationwide. This initiative is expected to enhance NEGK's operational efficiency and result in a reduction of over 17,000 metric tons of CO2 emissions annually.
The Eurasian Development Bank (EDB) and the Russian-Kyrgyz Development Fund (RKDF)
On July 8, the RKDF signed an agreement to allocate $10 million to the Chakan HPP company, earmarked for the completion of the Bala-Saruu small hydropower plant in Kyrgyzstan's Talas region. Expected to generate 25 megawatts, this plant, situated near the Kirov reservoir on the Talas river, aims to optimize water resource utilization.
President of Kyrgyzstan Sadyr Zhaparov initiated the construction of the Bala-Saruu HPP in 2022, allocating over $22 million from the national budget. The plant aims to produce 92.8 million kilowatt-hours of electricity annually, thereby reducing Kyrgyzstan's energy deficit by 4.2 percent.
In September, the RKDF announced plans to invest $4.2 million in constructing a small hydroelectric power plant on the Gulcha river in Kyrgyzstan's Osh region. This 9-megawatt plant is expected to cover 86 percent of the electricity demand in the Alai district and will employ modern equipment.
Furthermore, the EDB allocated $44 million for the construction of the Kulanak hydroelectric power station on the Naryn River, with the total project cost amounting to $118 million. The EDB and the RKDF agreed to jointly finance this project.
By the end of 2023, Denis Ilin, the Managing Director of the EDB, summarized that the bank's primary investments in Kyrgyzstan were channeled into two key projects this year: the construction of the Kulanak HPS and the modernization of the Kant Cement-Asbestos Plant.
Moreover, NovaWind (the wind energy division of the Russian Rosatom state corporation) and the RKDF have inked an agreement to explore and execute an investment project aimed at constructing a 100-megawatt wind power station in the Issyk-Kul region of Kyrgyzstan.
The Kambar-Ata-1 Hydropower Plant (HPP) Construction
On January 6, the Energy Ministers of Kyrgyzstan, Kazakhstan, and Uzbekistan signed a roadmap for constructing the Kambar-Ata-1 Hydropower Plant (HPP) in Kyrgyzstan.
This HPP, boasting a capacity of 1,860 MW, is set to be erected on the Naryn River in Kyrgyzstan's Jalal-Abad region, generating five billion kWh of electricity annually. The primary objective of this project is to alleviate Kyrgyzstan's electricity deficit and foster enhanced energy cooperation among neighboring countries.
Additionally, the WB has allocated $5 million for the HPP construction project, as previously mentioned.
Moreover, Kyrgyzstan's government has authorized the establishment of a mining farm capable of generating up to 30 MW within the Kambarata-2 HPP premises. The construction of this mining farm is estimated to require an investment of approximately $20 million, which will be provided by an investor.
Cooperation with China
On March 24, Chakan HPP Company and China National Heavy Machinery Corporation signed a contract for the construction of the Ort-Tokoi Small HPP, with a total capacity of 21 MW in Kyrgyzstan.
In late July, a consortium of major Chinese companies announced investments and the initiation of construction for the Kazarman hydropower cascade in Kyrgyzstan's Jalal-Abad region. The contract was signed during the Issyk-Kul 2023 International Economic Forum held in Cholpon-Ata city, Kyrgyzstan. The consortium comprises PowerChina Northwest Engineering Corporation Ltd., Green Gold Energy (GGE), and China Railway 20th Bureau Group Co. Ltd.
The Kazarman hydropower cascade, expected to have a total capacity of 1,160 MW, is scheduled for construction and operation on the Naryn river by 2030. The cascade will encompass four hydropower plants: the Ala-Buga HPP with 600 MW, the Kara-Bulun-1 HPP with 149 MW, the Kara-Bulun-2 HPP with 163 MW, and the Toguz-Toro HPP with 248 MW. The overall investment cost is preliminary estimated at $2.4–3 billion, subject to precise determination following the development of a detailed project design.
Moreover, during a working trip in August to the Xinjiang Uygur Autonomous Region of China, the Minister of Energy of Kyrgyzstan, Taalaibek Ibraev, signed documents pertaining to energy cooperation.
The key signed documents include two memoranda and one memorandum project, two of which were signed with Tebian Electric Apparatus Company (TBEA).
The first is the Memorandum of Understanding for Cooperation in the Construction of the Sary-Jaz Cascade between the Ministry of Energy of Kyrgyzstan and TBEA. This memorandum entails plans for constructing six hydroelectric power stations on the Sary-Jaz and Enilchek rivers, generating a combined capacity of 1160 megawatts and an annual production of 4 billion kilowatt-hours. The project, a joint endeavor with TBEA, is projected to span 5 or 6 years.
The second is a Memorandum Project for Cooperation between the Ministry of Energy of Kyrgyzstan and TBEA for the construction of the 500 kV Kemin-Torugart power transmission line. This document outlines collaborative efforts with TBEA for constructing the 500-kilovolt Kemin-Torugart power transmission line, aimed at exporting electricity to China.
The third document is a Memorandum of Intent between the Cabinet of Ministers of Kyrgyzstan and the government of Xinjiang for the Integration of Energy Infrastructure for the Purpose of Electricity Supply. This memorandum explores the possibility of exporting electricity from Kyrgyzstan to Xinjiang. Ibraev clarified that specific volume details have not been discussed yet, but Kyrgyzstan aims to export surplus electricity.