MAY 5 2016, BISHKEK (The Conway Bulletin) — Despite securing a $1.7b finance deal to boost its power generating sector, Kyrgyzstan still has its work cut out to ensure that it can hit targets laid out in the ambitious CASA-1000 project which aims to send Tajik and Kyrgyz electricity to Pakistan and India, analysts said.
Next week heads of state from Kyrgyzstan, Tajikistan, Afghanistan and Pakistan are due in Dushanbe to officially launch CASA-1000, heralded as a new epoch in Central Asia and South Asia trade relations.
And Kyrgyzstan’s $1.7b credit line, organised last week with the Islamic Development Bank, the International Development Association and the European Investment Bank, has come only just in time.
Kyrgyzstan needs the cash to bolster its power generating capacity which has faltered over the past six months. In December 2015, transmission line faults damaged the 1,200MW Toktogul power plant, which generates 40% of Kyrgyzstan’s electricity. The outage triggered shortages and worried senior officials in the Kyrgyz government and their international partners.
At the same time, Russia pulled out of a $2b deal to build a dam and a 2,000MW power station at Kambar-Ata, on the Naryn river in central Kyrgyzstan, because a recession had sucked dry its funds.
Marat Kazakbayev, a political analyst based in Bishkek said Kyrgyzstan can currently meet its export demands but at a heavy cost.
“Electricity exports may be carried out at the expense of domestic electricity supply for the population of Kyrgyzstan,” he said.
For Kyrgyzstan, though, CASA- 1000 is a headline project that it simply must make work. The $1.2b project, backed by the World Bank, has been touted as a regional trade deal that will create wealth in mountainous Kyrgyzstan and Tajikistan, which have large power generating systems through their network of hydropower dams, and light houses and office blocks in Pakistan where electricity is in short supply.
The United States also views the project as an important way to lock Afghanistan into a global trade system and for it to generate some revenue as a transit country.
Still, as Indra Overland, research professor at the Norwegian Institute of International Affairs, said, even with the $1.7b loan secured, there is no guarantee that Kyrgyzstan’s power sector will be running at capacity by the time CASA-1000 is supposed to start in 2018.
“Kyrgyzstan has a problem of suboptimal internal organisation, lack of good governance,” he said. “It has plenty of hydropower potential to produce enough electricity for itself and for export. It should be a surplus country, but its infrastructure is lagging behind.”
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(News report from Issue No. 279, published on May 6 2016)
