Kyrgyzstan cancels five hydropower plant deal with Russia

Kyrgyzstan Map

A multibillion dollar plan that would have seen Russian companies construct five hydropower power plants in Kyrgyzstan has been revoked by the Kyrgyz parliament.

The decision, announced yesterday after months of speculation regarding Russia's ability to meet its financial commitments to the central Asian country, negates deals worth more than US$3 billion that would have added over 2 GW of hydroelectric capacity.

The deals for the projects stem in part from the unanimous ratification of a $2 billion Russian aid package by the Kyrgyz parliament in February 2009 that would have been used to build the 1,860-MW Kambarata 1 complex. The plant would have been developed by Russian import and export utility Inter RAO.

Meanwhile, the country struck a deal with RusHydro during a 2012 visit to Kyrgyzstan by Russian president Vladimir Putin, which would have seen the Russian energy giant construct four plants at a cost exceeding $727 million. The four projects would have had a cumulative capacity of about 238 MW.

Russia's ability to deliver on the agreements had been in question for some time before this week's announcement, with Kyrgyz president Almazbek Atambaev saying the country should find a new partner as recently as last month.

Reports now say China might have an interest in developing the projects, though tensions between Kyrgyzstan and its downstream neighbor, Uzbekistan, over water usage could ultimately stymie those discussions.

Cancelation of the Inter RAO and RusHydro deals raise concerns about the country's energy security. While the Kyrgyzstan Energy and Industry Ministry announced a plan to construct several dozen small hydropower plants this past April, ongoing repairs at the 1,200-MW Toktogul hydro project -- which supplies about 40% of the country's electricity -- leave the country largely dependent on imported power.

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