Kyrgyzstan cancels deal with Czech company for major hydropower project

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BISHKEK (TCA) — Speaking at a government session on September 18, Kyrgyzstan Prime Minister Sapar Isakov said that he had given orders to his cabinet to cancel an agreement with the Czech Liglass Trading Company for construction of parts of the Upper Naryn Cascade hydropower project and several other hydropower plants, and prepare a new tender for the project, RFE/RL’s Kyrgyz Service reported.

On July 10, in Bishkek, in the presence of Kyrgyzstan President Almazbek Atambayev, the Government of Kyrgyzstan and the Czech company Liglass Trading CZ, SRO signed agreements on the construction, commissioning and maintenance of Akbulun and Naryn-1 hydropower plants (HPPs) of the Upper Naryn HPPs Cascade, as well as on the implementation of a project to build small hydro power plants in Kyrgyzstan.

According to the investment agreement on the Upper Naryn HPPs, the Czech company will transfer $37 million to the charter capital of the closed-type joint stock company Upper Naryn Hydropower Plants to get the company’s 50 percent shares belonging to the Russian side of the joint stock company.

Later in July, Czech and Kyrgyz media reports expressed doubts about Liglass’s financial turnover and capabilities.

Kyrgyz officials said they failed to find any official data proving the company’s successful achievements on any international construction projects.

The chairman of Kyrgyzstan’s State Committee for Industry, Energy, and Exploration, Duishenbek Zilaliev, said on July 17 that Liglass has 50 days to start fulfilling its financial obligations or the deal with the Czech company will be scrapped.

Under the deal, Liglass was required to pay $37 million to Russia by September 19, effectively buying out RusHydro’s shares in the Upper Naryn Cascade project.

Liglass General Director Michael Smelik told journalists in Bishkek on September 18 that his company is unable to pay the amount to Russia on time.

The Upper-Naryn cascade would include Akbulun, Naryn HPP-1, Naryn HPP-2, and Naryn HPP-3 power plants. The total capacity of the cascade should be at least 191 MW, with average annual electricity production of 1.55 billion kilowatt-hours.

Sergey Kwan

TCA