WASHINGTON, June 28, 2023-The World Bank's Board of Executive Directors approved today $67.7 million to help finance the first phase of the Kyrgyz Renewable Energy Development Project that aims to increase renewable energy generation and promote private sector participation in the Kyrgyz Republic. The project has a multi-phase programmatic approach with a financing envelope of $125.7 million over 10 years.
The first phase of the project will focus on supporting the Kyrgyz Republic to increase hydropower generation and enable renewable energy integration by strengthening the country's transmission systems. It includes $12.5 million in grants and loans from the Green Climate Fund mobilized by the Sustainable Renewables Risk Mitigation Initiative (SRMI).
Over the past 10 years, the Kyrgyz Republic's electricity consumption has increased significantly, and domestic generation is struggling to meet this growing demand, which has led to increasingly frequent electricity supply crises, particularly during winter months. At the same time, the country is well endowed with renewable resources, most of which remain untapped. The government has identified a combination of hydro and solar as the medium and longer-term least-cost solution to ensure the country's energy security. The Kyrgyz Renewable Energy Development Project will help the country to expand the generation capacity of the energy sector to meet the increasing demand and attract private sector investment to the sector. The expected results of the first phase include an increase in generation capacity of hydropower by more than 20 MW, increase in enabled variable renewable energy by at least 100MW, and reduced Greenhouse Gas (GHG) emissions by 50.3 tons of carbon dioxide equivalent over the project lifetime.
The new project complements the World Bank's ongoing support to the Kyrgyz Republic's ambitious and defined targets toward economic transformation, underpinned by energy sector reforms and development.
"Rehabilitated and new small and medium hydropower plants coupled with solar power investments will help mitigate the country's power supply challenge in the interim before large hydropower projects such as Kambarata 1 are realized. Moreover, investment to deploy renewable energy is one main measure to help mitigate climate change," said Naveed Naqvi, World Bank's Country Manager for the Kyrgyz Republic.
"The Kyrgyz Renewable Energy Development Project is structured through multiphase programmatic approach to help support the urgent needs in small hydro projects first, develop the nascent solar generation, and then scale up new generation capacity in hydro and power in the medium term," said Yun Wu, World Bank's Senior Energy Specialist and Task Team Leader of the Project. "The World Bank Group is using its global knowledge and convening power to support the ongoing broader energy sector reform efforts and engage the private sector in the energy sector of the Kyrgyz Republic."
The financing for the Kyrgyz Renewable Energy Development Project is provided on highly concessional terms through the International Development Association (IDA). The Phase 1 project will be implemented during 2024-2028 by the Ministry of Energy of the Kyrgyz Republic, in compliance with strict international standards including procurement and financial management regulations and anti-corruption guidelines.
The World Bank's overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. The 30-year partnership between the World Bank and the Kyrgyz Republic has brought about significant development gains in all major sectors of the economy through investments of $2.8 billion in 150 projects, technical assistance, and advisory and analytics.
