International Development Association to allocate $50 million for development of Kyrgyzstan's energy sector

International Development Association to allocate $50 million for development of Kyrgyzstan's energy sector

The draft law "On ratification of the Financing Agreement between the Kyrgyz Republic and the International Development Association (World Bank) on the project "Modernization and Sustainable Development of the Electric Power Sector", signed on October 5, 2022 in Bishkek, was considered at a meeting of the Jogorku Kenesh Committee on Fuel and Energy Complex, Subsurface Use and Industrial Policy.
Information on the draft law was provided by the Minister of Energy Taalaibek Ibraev. According to him, the project "Modernization and Sustainable Development of the Electric Power Sector", funded by the International Development Association in the amount of 50 million US dollars, is aimed at improving the financial and operational sustainability of the electric power sector by rehabilitating distribution networks and digitalizing the energy metering system.
"It is also expected that financial indicators will improve if the tariff trajectory aimed at cost recovery is observed. Social resilience will be reinforced by social protection systems to protect vulnerable populations that may be negatively affected by tariff increases. The project covers the entire territory of the Kyrgyz Republic” " T. Ibrayev said.
Answering the deputies ' questions, the speaker informed about the preliminary conditions of financing. “The loan term is 38 years, the grace period is 6 years, the interest rate for using credit funds is 0.75% per annum, and the maximum amount of the reservation fee is 0.5% per annum” 

During the discussion, parliamentarians pointed out the need for targeted use of funds, reducing the amount of funds for consulting services. In addition, the parliamentarians called on the Ministry of Energy to give preference to local producers when conducting tenders for the purchase of “smart meters" within the project.