Power policy

Kyrgyzstan’s power generation mix currently comprises 76% large hydro and 23% coal. The government aims to develop 100 megawatts (MW) of small-medium hydropower by 2026 and 700 MW of solar energy by 2030.

The only major clean energy policy in Kyrgyzstan was created in September 2017 as part of the "Forty Steps to the New Era" program. It laid the groundwork for incentives for the design, construction and operation of renewables projects, such as exemptions on import duties, expedited or removal of licensing processes, purchasing obligations from the state utility JSC National Grid of Kyrgyzstan (JSC NESK) and preferential feed-in tariffs. The policy grants renewable projects non-discriminatory dispatch priority to the grid, though project owners are responsible for paying transmission costs to connect to the grid.

Kyrgyzstan requires all entities involved in the renewable energy sector to be registered with the Ministry of Energy. As of December 2021, registration certificates were issued for 71 renewable energy subjects, including one 300MW solar power plant and one 10MW wind turbine.

Power prices and costs

Kyrgyzstan’s Medium-Term Tariff Plan (MTTP) for 2021-2025 maintains two levels of residential tariff. Under the MTTP, electricity tariffs are not expected to increase again until 2022, having been held constant since 2016.

Power market

Kyrgyzstan's power sector was privatized in 1999, disbanding the state energy company KyrgyzEnergo and unbundling generation, transmission and distribution. Still, state-owned JSC Electric Power Plants oversees generation and owns and operates nearly all the country's existing power generation, which is mostly hydro and has not increased in recent years. No private players have entered the generation market despite it technically being privatized.

JSC NESK operates the transmission grid and is entirely independent of JSC Electric Power Plants. SeverElectro, VostokElectro, OshElectro and Jalal-AbadElectro are the four public distribution companies.

There are also 21 private companies that operate portions of the distribution network around the country's capital, Bishkek. While the energy market is technically unbundled, the dominance of state-owned utilities leaves very little room for private players.

Doing business and barriers

Kyrgyzstan suffers from a deficit of power generation capacity to meet demand, impaired energy security and deteriorating operational performance due to aging infrastructure – approximately 50% of the country’s electricity generation capacity is beyond its useful lifetime, with transmission and distribution losses amounting to 6% and 12%, respectively. There are also the additional problems of Indebted state-owned enterprises amid heavily subsidized energy tariffs below cost-recovery levels, limited investment to unlock the country’s considerable renewable energy resources and corruption.

Despite an aging power fleet and transmission and distribution grid, almost 100% of Kyrgyzstan's population has access to electricity. This is partly why the country has invested little in upgrading infrastructure or diversifying its power mix, and has allocated minimal to no resources for grid expansion, mini-grids or solar home systems. A government program in 2018 to install solar systems in remote villages is the only residential solar initiative to date in the country, indicating there is little support for such technology at the government level.

The Asian Development Bank supports the development of a power generation expansion plan, which should be well-coordinated with a transmission and distribution system master plan in order to promote regional power trading.

EV market

Kyrgyzstan's electric vehicle (EV) market is still very primitive.

EV policy

The country does not have a specific clean transport target but a tax incentive was passed in 2020 for companies that produce EVs, components for EVs or charging infrastructure, or firms that import them.

Buildings market

Kyrgyzstan’s efforts to decarbonize its buildings sector are very nascent. Cheap electricity prices and a lack of technical expertise mean most people in the country use a traditional coal- or wood-fired stove or a low-pressure boiler for heating.

Buildings policy

Kyrgyzstan lacks a long-term plan specifically focused on low-carbon heating. However, as part of its 2018-40 National Development Strategy, the country does include heat pumps in its goal for 10% of its energy mix to be from “environmentally friendly energy sources”, which also includes small hydro, solar, wind and biogas. This is not officially a law, but more of a long-term objective. There are no tax credits, grants or low-interest loans on offer for heat pumps.