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

@Freepik

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 programs and initiatives for the general public.

Recall, earlier the President of Kyrgyzstan Sadyr Zhaparov in an interview with the state news agency “Kabar” said that the authorities of the republic intend to take a loan for the construction of HPP “Kambarata-1”, this loan, according to the President, will pay off in 12-13 years. After that, the new HPP will benefit the country for many years, like the Toktogul HPP.

“The construction of the Kambar-Ata-1 HPP is aimed at ensuring efficient power generation. This project will allow the country to diversify its energy sources, reducing dependence on traditional sources such as coal and gas. This will increase energy independence and ensure stability of energy supply in winter and summer periods, stabilizing the use of water resources during the growing and heating seasons. Which is a big plus not only for Kyrgyzstan, but for the entire region as a whole,” the President emphasized.

Recall that in the middle of last year, the Ministry of Energy of Kyrgyzstan said that the Kyrgyz authorities continue negotiations with Kazakhstan and Uzbekistan on the terms of joint implementation of the project. In this case, the countries are going to share the shares of the joint venture in half. Financing of the project, as noted, will take place by attracting loans and grants from international financial institutions, or at the expense of private investors.

Earlier, the Russian Ministry of Energy expressed interest in the construction of Kambarata HPP-1. In addition, the Kyrgyz authorities approached China and the Persian Gulf countries with relevant initiatives.

According to preliminary information, the new HPP will bring an annual net profit of 230 million dollars.

Recall that the project of HPP construction began to be developed in Soviet times, but was postponed. The launch of construction of HPP “Kambar-Ata-1” took place on June 8, 2022 with the participation of President Sadyr Zhaparov.