Kyrgyzstan, Kazakhstan and Uzbekistan Consider Joint-Stock Company to Build Kambarata HPP-1

Kazakhstan’s Ministry of Energy has announced that the draft Agreement between the governments of Kyrgyzstan, Kazakhstan, and Uzbekistan on the joint implementation of the construction and operation of Kambarata hydroelectric power plant (HPP)-1 has been posted on Kazakhstan’s official Internet portal Open Legal Acts. Available for public discussion, the agreement outlines the terms of cooperation between the parties in the proposed construction of Kambarata HPP-1 on the Naryn River in Kyrgyzstan. To implement the project, the proposed joint-stock company will be financed with 34 percent of authorized capital belonging to Kyrgyzstan, 33 percent to Kazakhstan, and 33 percent to Uzbekistan. The cost of construction is estimated between $5 billion and $6 billion and although the majority of funds will be drawn from the founders, further investment will be sought from loans and grants from international financial institutions and commercial banks. According to the draft, at the end of the project implementation period, the shares and assets of Kambarata HPP-1 will become the sole property of the Kyrgyz side. If realized, Kambarata HPP-1 will be the largest hydropower plant in Kyrgyzstan.

The World Bank will help Kyrgyzstan to build Kambarata HPP-1

Kyrgyz Finance Minister Almaz Baketaev met with World Bank Regional Director for Central Asia Tatyana Proskuryakova. The parties discussed Kyrgyzstan's projects on improving irrigation, as well as renewable energy in Kyrgyzstan and construction of Kambar-Ata-1 HPP in Jalal-Abad region, the Ministry of Finance of the Kyrgyz Republic reported. At the meeting in the Kyrgyz Ministry of Finance, the WB staff said that they are ready to provide Kyrgyzstan with $5 million for a feasibility study of the new HPP project, consulting services, as well as updating the preparatory work. In turn, the Minister of Finance of the Kyrgyz Republic emphasized that the financing agreement was approved by the Kyrgyz Parliament. According to the Ministry of Finance, the World Bank will provide the republic with 3 million dollars as an interest-free loan for 50 years with a grace period of 10 years, and 2 million dollars in the form of a grant. It should be noted that at present at Kambarata HPP-1 preparatory work is underway to provide electricity to the facility under construction, access roads, transportation tunnels and bridges are being built on the right bank of the Naryn River, which will provide access to the site of construction of the main structures of the HPP and shift camp for hydro construction workers. According to official data, more than 20 million dollars was allocated from the Kyrgyz republican budget for the preparatory work. The cost of the entire project, according to a feasibility study developed 10 years ago, is about $3 billion. But, as the Kyrgyz Ministry of Energy said earlier, the exact cost of all the works will be known after updating the existing feasibility study, for which the World Bank has allocated money. The estimated construction time for the new hydropower plant is nine years. Commissioning of the first hydroelectric unit according to the calculations will be made in seven years, provided that the construction is continuously financed. The World Bank said that Kambarata HPP-1 will be one of the most cost-effective projects to expand clean energy resources in Kyrgyzstan and throughout Central Asia. In addition, the project has the potential to address the country's energy security and generate significant revenues from electricity exports. "Kambarata HPP-1 is a critical project with the potential to bring enormous benefits in clean energy production, regional cooperation, water security, and environmental protection throughout Central Asia. The World Bank's technical assistance will help the Kyrgyz Cabinet of Ministers utilize the country's rich hydropower potential for the benefit of the people and the region, while strengthening the governance and financial sustainability of the energy sector," said WB Regional Director for Central Asia Tatiana Proskuryakova. According to her, the money from the WB will be used to update previous studies on the construction of a new hydropower plant to confirm the technical feasibility and economic viability of the project. Also, a mechanism will be developed to distribute benefits from the sale of electricity, so that part of the income could be directed to various socio-economic...