Kambarata on session again
Kyrgyzstan, Politics and SocietyOne Comment
After hours long debates, the Kyrgyz parliament today repealed the law on Construction and Service of Kambarata Hydropower plants (65 votes). The law was adopted on 19 July, 2009, and was heavily lobbied by the majority pro-president party “Ak Jol”. However, today, “Ak Jol” party lobbied the repeal of the law due to the “difficulties in financing the project Kambarata 2.”
Under the conditions of the law on Construction and Service of Kambarata Hydropower plants, the Kyrgyz government owned 100% share of the company OAO (open joint-stock company) “Kambarata Hydropower plant 2″, which, according to many speakers, made impossible to attract investment to the project. Moreover, finances from the Development Fund of Kyrgyzstan could not be directed to construction of hydropower plants, as according to the law Kambarata 2 cannot be put in pledge.
Other two parties of Parliament – Social Democrats and Communists – were against repealing the law. Communist explained their decision saying that such serious decisions must be made after careful learning of the issue. Social Democrats, the only opposition party represented in the Parliament, were categorically against repealing the law. Roza Otunbaeva, ex-foreign minister, member of Social Democratic Party of Kyrgyzstan, stated that pro-president party Ak Jol failed in dealing with energy issues, as it is repealing its own law that was lobbied throughout the country for about a year.
The energy situation in Kyrgyzstan is in a very bad condition. The Toktogul Hydropower plant located in the South of the country suffered bad times during recent years due to the shortage of water. For the past several years shortage of electricity resulted in mass controlled blackouts throughout the country, even in Bishkek, the capital city.
The latest news [ru] that Uzbekistan is leaving the Central Asian United Energy System hints me that the situation becomes worse. The good news is that Kazakhstan promised not to leave the System. The Kazakh officials say [ru] it is a “good will gesture” towards Kyrgyzstan, as in case Kazakhstan leaves the System with Uzbekistan, Kyrgyzstan’s electricity supplies will decrease by 70%.
User of Diesel, #1 internet forum in Kyrgyzstan, immediately reacted to the news. Udav [ru] says that Kyrgyzstan will fight back Uzbekistan decreasing the irrigation water in summer 2010. While Rus [ru] writes that “our politicians do not have courage for that”, Consult makes a good point stating “finally our politicians start working on energy issues, otherwise they fail by spring.”
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It is a complete mystery to me how Kyrgyzstan ever imagined it was going to be able to raise the $370 million it needed to develop Kambarata-2.
Frankly, it is an even greater mystery that the government ever managed to raise the $87.5 million that it claims it managed to scratch together.
And what private investor in their right mind is going to part with even one som for a hydropower project in Kyrgyzstan, when it is an open secret that the energy business in that country is run like a criminal racket.
One communist deputy spoke Friday about how this Kambarata-2 affair will end up just like the Kumtor gold mine nonsense. For the uninitiated, the Kumtor saga is a handy primer on how to get screwed doing business in Kyrgyzstan. After sustained harassment and tax probes, Centerra Gold, which owns the Kumtor mine, finally relented earlier this year and yielded a choice 15 percent or so share in the company to the Kyrgyz government.
The details are too dense to get into, but suffice it to say that sins were committed on all sides, and nobody came out of it looking too good. And at least there was still gold at the end of it.
Hydropower is a fabled source of wealth income. If managed well, it could stand to turn Kyrgyzstan around.
But despite Bakiyev’s hollow boasts of improvements, the country is now facing its second consecutive winter of planned power shortages (plus the disastrous cold winter before, which was a little less planned).
Once completed, Kambarata-2 is meant to generate up to 1.2 billion kilowatt hours of electricity per year. Just for comparison’s sake, Kyrgyzstan consumed roughly 9 billion kilowatt hours last year.
But since power consumption has actually declined over the last couple of years, one would imagine that the existing Toktogul reservoir could produce enough flow to generate the required electricity.
But Kyrgyzstan is a country of reverse alchemists; where crooked politicians turn gold into mud. Let’s just hope Centerra don’t hear about that magic trick.
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