 Presentation |
Kyrgyz Republic is rich in power resources. This
is especially true for the hydro energy resources,
which potential is estimated to be 142 billion kWh
per annum by experts, of which only 10 % are used
now.
High reserves of energy resources have created favorable
preconditions for fast development of a power complex
of the Republic, which from the beginning of 1980's
became a huge producer of hydro electricity in the
Central-Asian region. Up to 50% of the cheap and
clean electric power generated here has been delivered
to the United Energy System of Central Asia.
Kyrgyzstan's electric power industry is capable
of meeting the country's domestic electricity needs
while providing surplus electricity for export.
Kyrgyzstan has two major electric power plants -
a 1.2-gigawatt (GW) hydropower plant at Toktogul,
and a 0.76-GW thermal plant at Bishkek, with plans
for a major 6.8-GW hydropower station to be built
by 2010. In 2000, Kyrgyzstan generated 14.7 billion
kilowatt-hours (Bkwh) of electricity, up from 13.0
Bkwh in 1999, while the country consumed only 9.8
Bkwh in 2000.
Kyrgyzstan's abundant water resources give it significant
hydroelectric potential. The energy potential of
Kyrgyzstan's mountain rivers is estimated at 163
Bkwh per year. Hydroelectric energy meets approximately
20% of Kyrgyzstan's primary energy requirements
and accounts for nearly 20% of its total exports.
With rapidly growing energy demand in neighboring
countries, Kyrgyzstan's hydroelectric power potential
is becoming more attractive to foreign investors.
The long-delayed 450-megawatt (MW) Tash Kumyr Hydroelectric
Plant was put into full operation in 2001, and Kyrgyzstan
is working to secure financial resources to construct
two power-generating units at the Kambar-Ata Hydroelectric
Plant.
The Kyrgyz Republic has a real prospect for development
of hydropower construction. On the Naryn River alone,
the existing cascade of hydropower plants consists
of 5 power plants with a total installed capacity
of 2870 MW. It is also possible to construct another
7 cascades including 33 hydropower plants with a
total installed capacity of 6450 MW and annual generation
of more than 22 billion kWh.
Although Kyrgyzstan has excess electricity generation,
up to one-third of the power that the country generates
is lost due to Kyrgyzstan's deteriorating power
infrastructure. Lacks of transmission-related equipment
and inadequate pricing and cost recovery have contributed
to problems in the power sector. The Kyrgyz government
allowed Kyrgyzenergo to raise electricity tariffs
in March 2002 in an effort to recoup generation
costs, but already more than half of residents in
the Kyrgyz capital are not able to pay because of
previous rate increases.
Since the country's major hydroelectric power stations
are located in the south, the north of the country
typically depends on supplies of Kazakh electricity
in the winter. After Kazakhstan withdrew from the
Central Asian power grid in early 2002, northern
Kyrgyz districts were left with insufficient electricity,
prompting Kyrgyz government official to ask residents
in the north to conserve electricity.
Besides the irregular natural gas supplies from
Uzbekistan, Kazakhstan's decision to leave the regional
power grid has given Kyrgyzstan additional incentive
to shore up its power system. Kyrgyzstan already
has embarked on a program to make the country self-sufficient
in energy by 2005, seeking to increase its electric
installed capacity and to modernize its distribution
system. Kyrgyzstan has borrowed money from international
development banks to build substations, the Alai-Batken,
Kemin-Naryn, and Naryn-Torugart power lines, to
rehabilitate/reconstruct heat and power grids and
the Bishkek heat and power plant, and to buy equipment.
In 2001, Kyrgyzstan embarked on a restructuring
of Kyrgyzenergo, splitting off the company's distribution
networks and leaving the former monopoly as just
an electricity generating company. However, the
new companies are still saddled by their own debts
to Kyrgyzenergo and by consumers' failure to pay
their electricity bills. Kyrgyzstan plans to privatize
these regional electricity distribution companies
as the next step in the reform process.
In July 2001, the Kyrgyz parliament approved a government
restructuring plan for Kyrgyzenergo, the state electricity
company, which is aimed at preparing the company
for privatization this year. The plan calls for
the company to be divided into eight independent
divisions. Nowadays, the energy sector is divided
into three function-wise divisions. The first division
consists of structures, which generate electricity
and thermal energy. To be more detailed, these are
Toktogul, At-Bashy, Kurpsai, Shamaldy-Sai, Tash-Kumyr,
Uch-Kurgan Hydro Electric Power Stations and two
thermal stations in Bishkek and Osh. The second
division includes transmitting companies, which
control the high-voltage electricity transmission
lines for electricity supply to the regions of the
Republic. The third division consists of the switching
companies: "National electric grid", and
four switching companies: "Sever Elektro"
(Chuy and Talas provinces and Bishkek), "Vostok
Elektro" (Issyk-kul and Naryn provinces), "Osh
Elektro", and "Jalal-abad Elektro".
In order to reduce commercial losses, electric energy
market is now restructuring to switch controllers
to per feeder energy supply registration system
that is being continuously upgraded.
| History
of "Electrical Power Plants" |
Brief description of the structure of Electric
Power Plants Company
Nowadays the Kyrgyz energy system includes 21 power
plants with a total installed capacity 3 591 MW,
including 19 hydro power plants (2953 MW) and 2
thermal power plants (638 MW).
The hydro power plants are the basic source
of electricity in the Kyrgyz Republic. The five
most important existing hydro power plants are Toktogul
(1200 MW), Kurpsai (800 MW), Tash Kumyr (450 MW),
Uch-Kurgan (180 MW), and Shamaldysai (240 MW), which
are located in the lower Naryn River and form the
Toktogul cascade of hydroelectric plants. Some hydropower
plants with smaller capacity are located outside
of the Toktogul cascade.
The thermal power plants are located in Bishkek
and in Osh and they provide both electric power
supply and district heating services for these cities.
Other thermal plants (Karakol, Kyzyl-Kia) generate
only thermal energy. Bishkek thermal power plant
# 1 has installed electrical capacity of 588 MW
and uses coal, Osh thermal power plant uses black
oil and natural gas capacity of 50 MW. Fuel for
these thermal plants is imported from the neighboring
countries. The Republic power plants generate annually
around 12-14 TWh of electricity out of which approximately
2 TWh is exported to the neighboring countries (main
importers - Kazakhstan and Uzbekistan). 13,12 TWh
was generated in 1999 including 12,14 TWh generated
by hydropower plants and 0,98 TB-ra by thermal power
plants. Electricity export was 2'01 1 GWh (Kazakhstan,
892 GWh; Uzbekistan, 970 GWh; Tadjikistan, 149 GWh).
Power engineering is Kyrgyzstan's strategic sector.
Every year a great number of project proposals come
from foreign investors. Given the current economic
situation of the republic and the company proposals
containing the most privileged credit terms and
conditions are selected.
However further foreign investment in power engineering
is becoming more and more problematic due to the
following reasons:
· for a range of reasons, Kyrgyzenergo economic
situation worsened in 1999;
· loan payback began in 2000.
To obtain loans for building new hydro power stations
and high voltage power transmission grids to export
electric energy, long-term electricity export agreements
with adjacent countries are necessary - but they
do not exist so far.
Since 1999, Kyrgyzenergo began to intensively develop
technical cooperation programs with international
organizations. The company specialists have undergone
training and practical training in western energy
companies within the frameworks of various cooperation
programs.
During the last 5 years the Kyrgyz Republic has
become a key member of the Central Asian power system
due to the availability of high power capacities
of the hydropower plants. This allows the Republic
to export electricity to the neighboring countries
and to provide frequency regulating services in
the united energy system of Central Asia.
| Partners
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Legal basis for investment
The energy sector has been determined as one of
the priority branches of the Kyrgyz economy. Therefore
for the attraction of investments the creation of
required legal basis of which a major part is already
provided by existing laws including a law on foreign
investments, a law on energy sector, a law on electric
energy, and a law on energy conservation, is continued.
In accordance with current legislation of the Kyrgyz
Republic the foreign investors may build, operate
and own new power plants, they also may sell generated
electricity both inside the country and abroad.
Law on foreign investments
For the purpose of creation of maximum favorable
conditions for the attraction of the foreign investments
"The Law on Foreign Investments in the Kyrgyz
Republic" has been put into force.
This law provides to foreign investors the guarantees
of national treatment of economic activity applied
to legal entities and individuals of the Kyrgyz
Republic
Such guarantees as non-discrimination, protection
of the investments from expropriation, freedom of
money operations and conversion of currency, the
scheme of compensation of the possible losses to
the investors, the right freely and at the owner's
discretion to dispose investments and received profits,
in the event of damage the right on the indemnification,
and the free access to the open information are
stipulated.
Article 3 concerning the guarantees of national
treatment, equitable and fair treatment, full and
constant protection for foreign investors states:
· The Kyrgyz Republic shall accord to foreign
investors making investments within the territory
of the Kyrgyz Republic fair, equitable legal treatment,
full and constant protection, and guarantees. The
Kyrgyz Republic through its authorized governmental
bodies shall abstain from interference in the economic
activity, rights and legally recognized interests
of foreign investors.
· The Kyrgyz Republic shall provide foreign
investors, who make investments, with the national
treatment of economic activity applied to legal
entities and individuals of the Kyrgyz Republic
within the exception that restrictions which can
be introduced in the areas related to defense, the
protection of national security, health of the population,
and public morals.
Law on energy and electricity
Any kind of activity carried out in the electric
power sector of the Kyrgyz Republic is regulated
by the Energy and Electricity Laws entered into
force on 30.10.96 and 28.01.97 respectively.
These laws create prerequisites for promotion
of development and progress in fields of energy
production, transportation, distribution and supply
and they recognize the role of private natural
persons and legal entities in the energy sectors.
The exclusive right for such an activity is not
given to the enterprises, which are already carrying
out the activity in electricity sector. The energy
enterprises have the right to sell their generated
electricity to distribution electric network utilities
or to consumers. The National Grid only transmits
electricity and it buys electricity only for "Kumtor
Operating Company". The market is opened
for all businessmen provided they are in compliance
with the license requirements, the rules of the
National energy program and the legislation of
the Kyrgyz Republic. The same applies to the construction
of power plants, transmission lines and distribution
networks.
Participation of Kyrgyzstan in international organizations
and agreements
The Kyrgyz Republic together with other countries
has signed the Energy Charter Treaty, which will
come into force in the near future after ratification
by all contracting countries. This treaty covers
the issues on trade of energy products and materials
and their transit, protection of the investments,
and resolution of disputes. It also considerably
improves the climate for attracting investments
in energy sector.
Kyrgyzstan has concluded the following bilateral
agreements on the promotion and protection of
investments:
o USA;
o Turkey;
o Uzbekistan;
o Kazakhstan;
o Mongolia.
Kyrgyzstan has concluded the following bilateral
agreements on avoidance of double taxation:
o Uzbekistan;
o Kazakhstan;
o Byelorussia;
o Ukraine;
o Tajikistan;
o Canada;
o Russian Federation;
o India;
o Mongolia.
Kyrgyzstan is a member of the following international
organizations:
o United Nations Organization;
o World Trade Organization;
o International Monetary Fund;
o International Bank for Reconstruction and Development;
o International Financial Corporation;
o International Development Association;
o European Bank for Reconstruction and Development;
o Asian Development Bank;
o Islamic Development Bank;
o Economic Cooperation Organization;
o Etc.
Moreover, Kyrgyzstan is a party of such conventions
as:
o Convention on protection of rights of investors;
o The Washington Convention on the Settlement
of Investment Disputes Between
States and Nationals of Other States;
o Partnership and Cooperation Agreement between
the European Communities and
their Member-States on the one part, and the Kyrgyz
Republic, on the other part;
o Etc.
List of licenses and approvals required for
construction and operation of hydropower plants,
electric networks and electricity sale in Kyrgyzstan
1. For operation of Hydro Power Plants, transmission
networks operation and for electricity sales it
is necessary to obtain the following documents
1.1 The License of the State Energy Agency under
the Government of the Kyrgyz Republic (hereinafter
Energy Agency)
The integrated enterprises shall receive the separate
license for any type of activity, i.e. generation,
transmission and sale of electricity.
2. The Contracting companies shall obtain the
following documents:
2.1 The License of National License-Tender Center
(NLTC) under the Ministry of Architecture and
Construction of the Kyrgyz Republic giving the
right to implement the specific types of work
(design, civil, installation and etc.)
3. For civil works it is necessary to obtain the
following documents
3.1 Decision of ecology expertise on design documentation
issued by the Ministry of Environmental Protection
of the Kyrgyz Republic.
3.2 Decision of National Expertise on project
documentation issued by the Independent Expertise
Bureau of the Kyrgyz Republic.
| Products |
According to state electricity company Kyrgyzenergo,
the country generated 9.314 billion kilowatt-hours
of electricity in the first eight months of 2001,
9.8 percent less than in the same period last
year (10.328 billion kilowatt-hours). Kyrgyzstan
plans to produce 13.2 billion kilowatt-hours of
electricity in 2001, compared with 14.844 billion
kilowatt-hours in 2000. Expansion of electricity
output has been hindered by inadequate domestic
production of transmission-related equipment,
limited fiscal resources, and inadequate pricing
and cost recovery. Currently the infrastructure
to export large amounts of energy is lacking.
Kyrgyzstan is studying the possibility of constructing
transmission lines to China.
Table
Tariff policy in the Kyrgyz Republic
Both electricity and thermal energy supply and
rendering of services in the wholesale and consumer
markets in the territory of the Kyrgyz Republic
are carried out under the tariffs (payment for
services), set by the State Energy Agency under
the Government of the Kyrgyz Republic according
to the Energy Law and Electricity Law. The order
of consideration, approval and application of
the tariffs for electrical and thermal energy,
and also the amount of payment for services in
the wholesale and consumer markets are established
by the Government of the Kyrgyz Republic in accordance
with the energy Law and Electricity Law.
The basis for calculations of substantiation and
regulation of the tariffs for electrical and thermal
energy and definition of the amount for payment
of services is the balance of electricity (power)
generation and supply in the Kyrgyz Republic and
necessary costs for energy generation and supply,
costs for production development and credit/loan
repayment.
At present, the tariffs for electricity (power)
are differentiated by categories of the consumers,
and a system of one-part tariff (payment per 1 kWh
of the actively consumed energy) and two-part tariff
(payment per 1 kWh of electricity and per 1 kWh
of capacity) electricity is effective. |
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