Kyrgyzstan Small Hydropower Investors Seek 15-Year State Purchase Guarantees

Small hydropower investors in Kyrgyzstan are seeking state-level guarantees to ensure the profitability of their projects. The Alliance of Small Hydropower Plants has initiated consultations with the presidential administration and the Ministry of Energy of the Kyrgyz Republic regarding the transition to unified 15-year electricity purchase agreements. The proposed framework includes a fixed tariff of 5 cents per kilowatt-hour and a 100 percent energy purchase guarantee. While the national operator currently pays plant owners on a monthly basis, industry representatives argue that longer planning horizons are necessary to mitigate financial risks during the lending process.

In addition to guaranteed sales, entrepreneurs are working to reduce expenditures during the pre-project stage. The development of documentation for preliminary feasibility studies currently costs market participants between $30,000 and $200,000. To accelerate the commissioning of new generating capacity, the Alliance suggests establishing a specialized “single window” within the structure of the State Agency for Architecture, Construction, and Communal Services. This agency would be expected to prepare a pool of 30–50 ready-to-implement projects for transfer to investors.

The hydropower sector remains heavily reliant on foreign equipment, with import dependency reaching 95 percent. Consequently, the Alliance of Small Hydropower Plants is advocating for the development of local or regional manufacturing for components such as turbines, generators, and transformers. Furthermore, business representatives intend to discuss a mechanism for co-financing infrastructure costs. Investors hope to share the expense of constructing power transmission lines to remote river sites where the development of hydropower stations is currently hindered by the lack of existing electrical grids.