Kyrgyzstan to develop small hydro-power plants

JALAL-ABAD – In a bid to solve the country's energy crisis, the Kyrgyz government is developing an energy policy that will encourage the construction of small hydro-power plants (HPPs).

Entire districts, including parts of the capital, have suffered from power cuts this winter because of overburdened substations, breakdowns and brief cut-offs for non-payment by Kazakhstan and Uzbekistan. Even the large Toktogul hydro-electric station has been showing signs of breakdown, according to news reports.

Kyrgyzstan ranks fourth among CIS countries in abundance of water resources. However, that advantage doesn't translate to plentiful electricity. It ranked 177th out of 185 economies in "getting electricity," according to the World Bank's "Doing Business 2013" study.

"We have communities that are still not electrified, as crazy as that sounds," said Azamat Arapbayev, chairman of the Parliamentary Committee for the Fuel and Energy Sector and Subsoil Management.

HPPs offer targeted energy solution

Kyrgyz authorities recognise the electricity crisis as an immediate priority, and consider HPPs a viable solution.

"The pay-off period for a powerful hydro-electric station built today is 15-25 years," Minister of Energy and Industry Avtandil Kalmambetov told Central Asia Online. "For small HPPs, investment is recouped much faster, and so we should focus on building such plants."

Small, inexpensive power stations provide an immediate and affordable short-term solution, he explained.

Large hydro-electric stations produce energy mainly for export, Arapbayev said. With that in mind, it makes sense to develop small power plants for Kyrgyz households and industry, he said.

"With the development of small-scale hydro-power – even one plant that provides a village or rural district with electricity – this alone would help the existing power stations," he said.

Small HPPs can help specific regions and villages, and if they fail, they can be rapidly repaired, he added.

Energy policy and investment

Parliament is focusing on how to best develop its energy policy, discussing such things as how to allocate funds and where to build small HPPs.

Organisations that would be involved in the development of small power-generation plants include the Directorate for the Development of Small HPPs, the Kyrgyz Association for Renewable Energy, the UNDP-Global Environmental Fund project "Kyrgyzstan: Small Hydropower Development," and the Inter-agency Working Group, which is comprised of hydro-power resource specialists, NGO representatives, civil society activists and others.

These consultants, working with the Energy Ministry, have drawn up 11 bills aimed at improving the conditions for foreign companies wishing to invest in Kyrgyz power projects.

The bills will undergo parliamentary review over the next three to five months, Edilbek Bogombayev, the manager of the "Kyrgyzstan: Small Hydropower Development" programme, told Central Asia Online.

"In accordance with procedure, we submitted them to each of the 15 ministries for approval, and later we will send them to parliament," he said. "We will explain the basis of the new laws to each faction and show why they need support."

To attract investors, Kyrgyzstan needs to modify its laws on land acquisition and water use and to provide tax breaks, he said.

Individual oversight needed

Even though such reforms are not official yet, foreign investors have started building small HPPs in Kyrgyzstan.

"Several companies from Canada, Germany and South Korea have built power plants here and continue to show interest," he said. "For example, an HPP with a 6MW capacity has been built in Chatkal District, and it provides electricity for the gold mine and local villages."

But for the sector to fully develop, the government needs to create an agency to regulate such projects, Arapbayev said.

In 2008, the government created the Directorate for Small and Medium Energy Sector Development, headed by Felix Kulov, now leader of the Ar-Namys parliamentary faction, but it lasted only two years because of lack of funding.

"The issue of a separate government agency must be resolved," Arapbayev told Central Asia Online.

"We need political stability, and the government needs to earn investor trust, because it should be profitable for them to invest in the small and medium-sized energy sector," he said. "Our committee is now working on a bill that specifies who can buy and sell electricity and how."