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Kyrgyzstan Revokes Hydropower Deal With Russia

  • Bruce Pannier

Kyrgyz President Almazbek Atambaev (right) talks with the president of the Russian company RusHydro at the opening ceremony of the capsule for a future hydropower plant on the Naryn River in October 2012.

Kyrgyz President Almazbek Atambaev (right) talks with the president of the Russian company RusHydro at the opening ceremony of the capsule for a future hydropower plant on the Naryn River in October 2012.

Energy independence appears to be a long way away for Kyrgyzstan. As expected, Kyrgyzstan's parliament has revoked an agreement with Russia to construct hydropower plants. The move officially ends a deal that in reality was going nowhere, but it leaves Kyrgyzstan with bleak prospects for harnessing the country's huge hydropower potential.

The decision was made at a January 20 session of parliament but it was clear since late December that the agreement would be canceled.

Kyrgyz Deputy Economy Minister Aybek Kaliev returned from a December 21 bilateral meeting with Russian officials in Moscow and reported that, due to the "unfavorable economic situation" in Russia, it would be impossible for Russian companies Inter RAO and RusHydro to complete their shares of Kyrgyzstan's ambitious hydropower project.

Kyrgyz President Almazbek Atambaev followed by saying on December 24 that "the reality is such that today, unfortunately, our Russian friends will not be able to implement these projects." "This is going to be the case for a long time," he said, adding that "we need to find a new partner."

Kyrgyzstan's Cabinet of Ministers on December 31 approved revoking the deal and just days later Prime Minister Temir Sariev urged parliament to quickly take the necessary steps to break the agreement.

The agreement for the hydropower projects was signed during Russian President Vladimir Putin's 2012 visit to Kyrgyzstan. Inter RAO was tasked with constructing the $3 billion Kambar-Ata-1 facility with a capacity of some 1,860 MW and RusHydro to build the four smaller hydropower plants (HPP) with a combined output of some 237.7 MW and a cost of some $727 million. Inter RAO said as early as 2013 it would not have funds to cover construction of Kambar-Ata-1.

However, the timing of all this could not be worse for Kyrgyzstan. In late December, as Kyrgyz officials were mulling the cancelation of the agreement with Russia, one of the four turbines at the massive Toktogul reservoir broke down. The Soviet-era Toktogul reservoir is the largest power plant in Kyrgyzstan with a capacity to generate some 1,200 megawatts, about 40 percent of the country's electricity needs. Shortly after the first turbine stopped operating on December 22, two more turbines failed.

Prime Minister Sariev visited Toktogul and said it was clear the hydropower facility was in need of repair and upgrades. "It should have been done 15 years ago," Sariev said. "The cables, which are damaged now, have been used for more than 40 years instead of the recommended 25 years."

Clearly, the Kambar-Ata-1 HPP and Naryn cascade are vital projects for Kyrgyzstan.

When speaking in December about Russia's inability to finance the hydropower projects, Sariev was undaunted. "We will think of attracting other investors," he said. "There are plenty of them."

Despite Sariev's optimism, however, it is unclear who these potential investors might be. China has been mentioned, but as Central Asia specialist Casey Michel mentioned in a recent article, "the likelihood of...Beijing supplanting Moscow in financing the projects, at least in the immediate future, remains low."

Very low indeed. China has invested heavily in Central Asian infrastructure projects during the last decade, but nearly all of these projects serve to export energy resources, goods, and materials to China. A domestic hydropower project meant to benefit Kyrgyzstan would not be a project high on the list of Chinese investments.

Additionally, RFE/RL's Kyrgyz Service, known locally as Azattyk, reports that another deputy economy minister, Nurlan Sadykov, has said Kyrgyzstan should repay the $37 million Russia already spent on the Kambar-Ata and Naryn cascade projects, though he didn't say where Kyrgyzstan's cash-strapped government would get that money.

Kyrgyzstan has moved in recent years to break its dependence on gas supplies from Uzbekistan, especially since those supplies were often suspended by Tashkent due to Bishkek's inability to pay on time. Instead Kyrgyzstan imports some electricity from neighboring Kazakhstan and in recent years has also imported electricity from Tajikistan. Kyrgyzstan has also increased the use of coal-based thermal power plants, but must import some coal to fill its needs.

Kyrgyzstan has been hoping to be energy independent for years, but with the cancelation of the hydropower agreement with Russia that wait might now go on for a decade or more.

RFE/RL Kyrgyz Service director Venera Djumataeva contributed to this report

About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change. Content will draw on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad. The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.

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