Energy sector reforms in the Kyrgyz Republic: Green light ahead

The World Bank Group is joining forces with the Government of the Kyrgyz Republic and development partners to deliver an ambitious energy reform program which was showcased at the Bishkek International Energy Forum in April 2022. Naveed Hassan Naqvi, Kyrgyz Republic Country Manager, and Sudeshna Ghosh Banerjee, Europe and Central Asia Energy Practice Manager, share their insights from the Forum and on the Bank Group’s support.

A platform to share ideas with partners and engage with citizens

The Bishkek International Energy Forum held on April 8, 2022, served as a platform for stakeholders to come together in a novel hybrid format. Around 200 participants—150 in-person and 50 online, including panelists from around the world sharing their experiences—attended a day-long event led by the Government of the Kyrgyz Republic and supported by the World Bank. Opened by the Prime Minister of the Kyrgyz Republic, the Forum attracted senior officials from key agencies and partners, including the World Bank Group, ADB, EBRD, AIIB, UN, Swiss State Secretariat for Economic Affairs (SECO), and the private sector. The excitement to meet in-person was palpable as were the technological innovations that allowed panelists from around the world to join online and enrich the dialogue with global experiences.

The Forum showcased energy sector development as a priority for the Kyrgyz authorities to create jobs and economic opportunities as well as improve the welfare of all citizens. Energy sector reforms are crucial and timely for the country because they are a key component to achieving broad-based and sustainable economic development. Toward this end, the government has announced an ambitious sector reform program as outlined in the Energy White Paper and Reform Roadmap, prepared with support from the World Bank.  This reform program is centered around four pillars: (i) financial recovery and operational efficiency, (ii) affordability and social sustainability, (iii) environmental sustainability, including clean energy scale-up, and (iv) governance and accountability. Successful implementation of these reforms is expected to contribute to the government’s twin objectives of reaching an upper middle-income country status by 2040 and achieving carbon neutrality by 2050.

In bringing together government officials and international experts to discuss this reform agenda, the Forum served as both a powerful communication and convening platform. Firstly, the forum offered an opportunity for Kyrgyz authorities to present an ambitious energy reform program to all stakeholders to raise public awareness on the government’s plans and secure stakeholder endorsement. Secondly, the forum was an effective coordination platform to better harmonize the efforts of development partners, the private sector, and government stakeholders on implementation of the White Paper and Reform Roadmap.  The Forum also benefited from two years of analytical support from the World Bank on sustainable heating practices, renewable energy, and tariff reforms.

And the Forum generated headlines, helping bring the event’s critical messages to a national audience. The event received significant publicity, being mentioned over 140 times across broadcast outlets and by major social media influencers. And a major motif throughout this coverage was that the energy sector should be a locomotive – not a brake – for the country’s socio-economic development. 

Following the Forum, jointly with development partners, the government has prepared a Detailed Action Plan, outlining specific reform actions, their sequence, timeline, and responsibilities for effective implementation of the White Paper and Reform Roadmap. Moreover, the success of this April’s Forum inspired the government to request the World Bank to repeat the event every two years to help hold each other accountable as partners, and also moved the World Bank to use a similar approach to help organize a Human Development Forum, which was held in May 2022.

Scaling-up our support

Anchored in the government’s far-reaching objectives announced during the Forum on energy sector development, we are leaning into scaling-up our financial and technical assistance. The World Bank Group, encompassing the World Bank, IFC, and MIGA, is bringing a suite of instruments to support the government’s program. The newly approved Kyrgyz Electricity Sector Modernization and Sustainability Project aims to improve the financial performance and operational reliability of the electricity sector and create a supportive social protection mechanism to mitigate consumer impacts of envisaged reforms. The World Bank will finance the project through credit and grant funds in the total amount of $50 million.

The SECO is also considering providing co-financing to the project with $8 million in grant funds and associated Bank-executed trust fund. This project is also expected to pave the way for a sustainable and affordable scaling-up of renewable energy. The World Bank and IFC will jointly pursue helping the government in hydro and solar development with private sector participation in the first transparent and competitive 100 MW solar PPP project. And both institutions intend to remain long-term partners towards achieving the Kyrgyz Government’s goals to develop 100 MW small-medium hydropower by 2026 and 700 MW solar energy by 2030.

We in the World Bank hope that with strong political will and commitment on behalf of the authorities and broad-based support from a wide range of stakeholders, the Kyrgyz Republic’s energy sector is finally set to see a green light and turn into a true driver for the country’s development.