Kyrgyzstan Guarantees $25M Loan for Hydropower Plant Construction

State Financial Holding OJSC has acted as a guarantor for a US$25 million loan provided to Alliance Hydro LLC by the Russian-Kyrgyz Development Fund. The funds are designated for the construction of the Jeruy small hydropower plant in Kyrgyzstan’s Talas region. The plant is designed to have a capacity of 24 megawatts.

The transaction was formalized through a tripartite guarantee agreement signed on February 3, 2026, and registered under number 19-7-1/3. The agreement was authorized by an order from the Cabinet of Ministers of the Kyrgyz Republic, number 941-r, dated November 5, 2025.

The financial guarantee is classified as a one-time major transaction, representing at least 10 percent of State Financial Holding OJSC’s total assets at the time of the agreement. In the event of a default on the loan by Alliance Hydro LLC, the state-owned holding would be liable for the outstanding amount, exposing it to significant financial risk.

The Russian-Kyrgyz Development Fund is a key source of financing for infrastructure projects in Kyrgyzstan, particularly in the energy sector. The construction of small hydropower plants aligns with the government’s strategy to develop the country’s energy infrastructure and increase the share of renewable sources in its national energy mix. The development of such projects – including small-scale facilities – can alter natural river flows. These alterations may affect aquatic ecosystems by disrupting fish migration routes and changing hydrological regimes, which in turn can impact riparian habitats. In mountainous environments like those in Kyrgyzstan, these changes can have long-term effects on local biodiversity.