Kyrgyzstan

Kyrgyzstan’s hydro-rich energy sector is characterised by aging infrastructure and significant losses, which are exacerbated by a combination of weather-related shocks and growing demand. Energy policy aims to improve energy security by developing indigenous energy sources and rehabilitating and expanding transmission and distribution networks. Developing sustainable energy and improving energy efficiency are also priorities, while slowly removing subsidies will allow for further investment and expansion of domestic resources. Kyrgyzstan is part of the EU4Energy Programme, which is focused on evidence-based policymaking in the energy sector.

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Key recommendations, 2015

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Develop a comprehensive energy strategy with a medium- and long-term outlook

Assess the overall energy sector, potential for energy efficiency gains, renewables and alternative energy resource opportunities. Develop a roadmap for raising heat and electricity tariffs to cost-recovery levels, and include a target date for phasing out subsidies, while maintaining social support to the most vulnerable. Consider a power system rehabilitation plan and new infrastructure development based on energy security concerns, clean technologies and sustainable development.
Develop a comprehensive rate structure for electricity and heat tariffs

Taking advantage of local as well as international financial institution expertise, include a schedule for the phase-out of subsidies, to reach fully cost-reflective tariffs that allow for planned capital investment. The phase-out of consumer subsidies should be done on the basis of affordability, with the most vulnerable customers receiving the most support until the phase-out is complete.
Develop incentive schemes for energy efficiency improvements on the demand and supply sides

In demand management, support the rehabilitation of old buildings and set strict new building standards. On the supply side, include incentives on investment in modern technologies and automated systems to improve energy efficiency, ensure the rehabilitation of infrastructure and investment in grid access for new renewable generation.
Establish an energy efficiency and renewable energy agency

This agency will be in charge of implementing the energy efficiency and renewable energy policies and measures mentioned above.
Combat public sensitivity of the public with regards to electricity tariffs

Raise public awareness on the real cost of electricity and the possible increase in tariffs, and on energy savings and energy efficiency gains that can help to offset electricity price increases, to combat public sensitivity on the issue of tariffs.