NOV. 7 2014 (The Conway Bulletin) – Kazakhstan and Kyrgyzstan agreed a deal for Astana to meet most of Bishkek’s electricity deficit, albeit at a price greater than Kyrgyz President Almazbek Atambayev would have wanted to pay.

The deal, finalised during a meeting between Kazakh President Nursultan Nazarbayev and Mr Atambayev in Astana, means Kyrgyzstan must pay roughly three times more for the imported electricity than Kyrgyz citizens pay for domestically-produced electricity. Importantly, it also shows Kazakhstan’s political clout in Kyrgyzstan is growing.

An estimated deficit of 2b kilowatt hours (kWh) this year, caused by a shortage of water in its reservoirs, public reaction to shutoffs drove Bishkek and the potential to sign the deal.

Mr Atambayev will be relieved to have made the deal to import 1.4b kWh from Kazakhstan but here are still problems. He will have to make up the shortfall from somewhere else, possibly Turkmenistan, and he will have to finance the extra costs.

Currently the government has suggested modest tariff increases beginning Jan. 1. These are bound to irritate people in Kyrgyzstan.

Other agreements reached by Mr Atambayev and Mr Nazarbayev at the meeting are also indicative and suggested that Kazakhstan maintains significant leverage over its weaker neighbour.

Mr Nazarbayev promised that a fleet of Kyrgyzstan-bound fuel wagons, owned by Russian energy giant Rosneft and held by Kazakh customs officials without explanation since April, would be allowed to cross the two countries’ mutual border. He also pledged a $100 million grant to Kyrgyzstan as the country prepares to enter the Eurasian Economic.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 208, published on Nov.12 2014)