Czech investor replaces Russia in construction of Kyrgyz Upper Naryn hydropower project

Czech investor replaces Russia in construction of Kyrgyz Upper Naryn hydropower project
The construction of the Kyrgyz Upper Naryn hydropower project will help Kyrgyzstan become more self-sufficient in energy production
By bne IntelliNews July 11, 2017

The Kyrgyz government has reached a deal with Czech company Liglass Trading to construct and operate two units of the stalled Upper Naryn cascade hydropower project, the Kyrgyz president’s website announced on July 10. The company will build the Akbulun Hydropower plant (HPP) and the Naryn HPP-1.

The announcement is in line with an earlier statement by Kyrgyz President Almazbek Atambayev, which claimed that Kyrgyzstan has found a new investor for the cascade, putting the project back on the table after Kyrgyzstan officially terminated an intergovernmental agreement with Russia in August 2016 that was signed back in September 2012.

The economic crisis in Russia and Western sanctions against Moscow made credit for Russia expensive which, in turn, translated into expensive funding for the Kyrgyz project, initially estimated to cost $732mn. As a result, Kyrgyzstan decided to cancel the agreement and start looking for less expensive sources of funding. On the other hand, President Atambayev previously complained that Russia was dragging out the start of construction.

So far Liglass Trading has committed $37mn in order to buyout previous Russian investor RusHydro’s 50% stake in the Upper Naryn Cascade operating company. The company is also considering eventually investing $400mn.

The company will also be constructing 10 small hydropower units as part of a different project.

Kyrgyzstan faces recurrent energy shortages, especially during the winter. The construction of the Upper Naryn cascade, along with the stalled Kambar-Ata hydropower project, is aimed at increasing the country’s energy self-sufficiency.

Moreover, the country is participating in the CASA-1000 regional electricity transmission project, which will export electricity from Kyrgyzstan and Tajikistan to Pakistan through Afghanistan.