Up to €4 million loan from EBRD and €1 million EU grant will pay for modernisation programme. The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are continuing their programme to modernise derelict public infrastructure in the Kyrgyz Republic with a new project in the southern Osh region.
The project – the first for the EBRD in the energy sector of the Kyrgyz Republic – will modernise electricity transmission systems serving the Osh and Batken regions. As a result, more than 400,000 people are expected to benefit from upgraded electricity services.
The local power distribution company, Oshelectro, will install an advanced metering system with about 18,500 meters and modernise the low- and medium-voltage power infrastructure, which will lead to a significant reduction in electricity losses.
The EBRD is providing a loan of €4 million for the project, and the European Union’s Investment Facility for Central Asia (IFCA) a €1 million investment grant.
The EBRD is also financing technical cooperation projects, including due diligence, project implementation support and a corporate development programme for the electricity company, aimed at strengthening its financial performance.
Neil McKain, Director for Central Asia, said: “The energy sector in the Kyrgyz Republic has suffered from under-investment and stalled reform for years. But in the last couple of years we have seen a positive reform momentum, which has now enabled the EBRD to support our first project in the sector. It will not only enable Oshelectro to finance the necessary upgrades, but also provide many people in the country with access to reliable electricity services.”
Johannes Madsen, the Head of Cooperation Section of the EU Delegation to the Kyrgyz Republic, said: “The project is a great example of how the cooperation between the European Union and its financial institutions enables EU taxpayers to effectively address the most vital needs for energy infrastructure in the Kyrgyz Republic, resulting in a more reliable and sustainable supply of energy for the population.”
Daminov Dyikanbai, General Director of OJSC Oshelectro said: “The energy sector is an important sector of the Kyrgyz Republic’s economy. The project entails introduction of smart metering and investments into low voltage lines in the south of the Kyrgyz Republic, which will help OJSC Oshelectro to decrease energy losses and to provide stable energy supply to the population and the private sector.”
To date, the EBRD has invested over €630 million in the Kyrgyz Republic. While focusing on the development of the private sector, the Bank is also implementing a programme of improvements in vital public services such as water and wastewater, electricity and transport. In these areas, the EBRD usually cooperates with an international donor such as the EU and supports not only upgrades of physical infrastructure but also corporate development programmes at state companies.