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Expert faces difficulty to predict whether Kyrgyz HPPs will be realised

31 August 2017 [12:00] - TODAY.AZ

By  Trend

Despite the fact that the investor for the construction of the Verkhne-Narynsky cascade of hydroelectric power plants (HPPs) was found, the fate of the Kyrgyz ambitious project remains unclear.

It is rather difficult to predict, whether the construction of the Verkhne-Narynsky cascade of HPPs in Kyrgyzstan will be implemented, Leonid Gusev, a senior researcher of Moscow State Foreign Relations Institute’s (MGIMO) Analytical Center, told Trend.

The matter is that in the beginning, the construction of the cascade was conducted in 2013-2015, in accordance with the intergovernmental agreement between Kyrgyzstan and Russia, and the launch of the first hydroelectric unit was scheduled for 2016, he explained.

The expert recalled that financing of construction was entrusted to the Russian side.

“Nevertheless, on January 20, 2016, the intergovernmental agreement was denounced by the Kyrgyz parliament, in connection with the inability to attract funding from the Russian side on the initial terms,” he added.

Thus the project remained in limbo for about a year and a half, but on July 10, 2017, two agreements were signed between Kyrgyzstan and the Czech company Liglass Trading, according to Gusev.

“One of them is on the construction of the Verkhne-Narynsky Cascade of HPPs, while the second one concerns the construction of 10 small HPPs. Liglass Trading is ready to invest about 400 million euro in total into Kyrgyz energy sector,” he said.

However, it is unknown whether this Czech company will be able to cope with such a project, for, as previously reported, this firm had never engaged in capital construction or projects related to hydropower energy, according to the expert.

“In turn, the president of Kyrgyzstan, Almazbek Atambayev, stated that if the Czech company pays out initially $37 million, it can be considered a serious investor, and if not, we will have to look for others,” he added.

Therefore, we need to see how the events will develop further, the expert noted.

The investment agreement with the Czech company Liglass Traiding CZ, SRO for the construction of the Verkhne-Narynsky hydroelectric power plants (HPPs) and small hydropower plants in Kyrgyzstan was signed on Aug 4.

The deal also envisages the attraction of financing in the amount of about $230 million for the construction of the Akbulun HPP and Naryn HPP-1.

In case of investor’s failure to fulfill taken obligations, this investment agreement will be terminated, and all of the funds invested in the authorized capital of Verkhne-Narynskye HPPs CJSC will not reimbursed.

The project of construction of small hydropower plants in Kyrgyzstan is implemented by the Kyrgyz government and Liglass Traiding CZ, SRO, following a tender conducted in accordance with the decree of the government, dated May 15, 2017.


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