Kyrgyzstan Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in kyrgyzstan, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Kyrgyz Republic - Energy
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Overview

Hydropower

The Kyrgyz Republic possesses tremendous hydropower potential, up to 142 billion kWh. Hydropower accounts for nearly 90 percent of electricity produced in the Kyrgyz Republic, but this installed capacity only represents about 10 percent of the country’s hydropower potential. The government and private investors are building small hydropower plants (up to 30MW) across the country. The existing hydropower infrastructure is mostly Soviet-era equipment in need of updates. Opportunities exist for government projects in consulting or undertaking work to renovate existing hydropower plants and the government has committed to building new, modern plants of all sizes in the Kyrgyz Republic. However, the energy sector, and hydropower in particular, remains a sector of sensitivity to the government and companies working in this field should be ready for delays and complications in completing large projects.

Solar and Other Renewable Energy Sources (RES)

Solar and other RES such as wind, geothermal, and biomass are nascent markets but there is demand for technology and expertise to develop them. Researchers have determined that the country’s geography and climate favor solar energy: 94 percent of the territory is highlands with altitude varying from 800 to more than 4,000 meters above sea level, with an annual average of 260 sunny days. In addition, solar radiation intensity is considered high. A few projects to develop geothermal energy from Issy-Kul Lake have also begun. See Opportunities section below for further details.

E-Vehicles

Electric vehicles are gaining in popularity in the Kyrgyz Republic, both with individuals and the public sector. See Opportunities section below for further details.

Opportunities

The Kyrgyz government seeks to attract industry leaders with deep experience and technical know-how to improve the country’s energy infrastructure. To encourage investment into hydropower infrastructure, the government exempts renewable energy companies from VAT when importing equipment and offers power purchasing agreements for electricity generation. Capital, expertise, studies, and equipment are all needed to develop solar, wind, geothermal, and biomass energy sources. Major capacity generation projects financed in large part by international finance institutions (IFIs) offer an opportunity for private foreign companies to enter and compete in the Kyrgyz hydropower market. The Kyrgyz government awarded a turn-key contract in 2018 for the Asian Development Bank-supported modernization of the Toktogul HPP to a joint venture of GE Hydro (France) and GE Renewables (Switzerland). In the past year, the government has announced its intent to develop several new, large hydropower projects in the Kyrgyz Republic. Targeted opportunities also exist for firms that provide niche engineering services and other support to the hydropower sector. On July 2, 2022, the president signed the law on Renewable Energy[1], which establishes the legal, organizational, economic, and financial framework and mechanisms for regulating relations between the state, producers, suppliers, and consumers of renewable energy sources.

For e-vehicles, opportunities include provision of the vehicles themselves as well as construction of the necessary charging infrastructure around the country. Currently, e-vehicles are concentrated in the capital city of Bishkek with very few charging stations available. The government has discussed offering tax incentives for importing electric vehicles and construction of additional charging stations. The government is also interested in incorporating e-vehicles into its fleets, and the city of Bishkek has already ordered electric buses.

[1] https://www.president.kg/ru/sobytiya/novosti/22851_podpisan_zakon_kr_o_vozobnovlyaemih_istochnikah_energii

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