Setting Ground Rules for Investments in Hydro Power
“It’s just plain and dry land for now, but I hope in several years this land will be green and employ hundreds of farmers,” says Asan Halbekov showing the 2,000 hectares of land in Toguz-Bulak Village located in the far west of Kyrgyzstan’s Batken Province. “Since the collapse of the Soviet Union, these farmlands were not cultivated because the pump station stopped working and there was no water. I hope our small hydro power plant and a pump station we’re planning to build will change things.”
Asan Halbekov’s coal mining company is among the pioneer private investors in construction of small hydro power plants in Kyrgyzstan. They are building a 600-kilowatt power plant on Jangakty River. It will provide power for Mr. Ibragimov’s coal mines and the new pumping station that will push the water 200 meters up – to the new arable lands.
- About 65% of Kyrgyzstan’s energy is generated by power plants on large rivers.
- Kyrgyzstan ranks third in the CIS in terms hydro power resources after Russia and Tajikistan.
- Kyrgyzstan has more than 80 spots for small hydro power plants construction.
UNDP is helping Mr. Ibragimov to develop technical documentation for the power plant as part of its project on promoting small hydro power plants since 2010. It also helps the Kyrgyz government streamline respective legislation which would be attractive for investments, including private ones, in renewable energy sector. The public-private partnership building is also a part of this equation.
Some two thirds of the country’s energy is generated by power plants on large rivers. The hydro-energy sector is dominated by a few large “Soviet” power plants, while the small-scale potential of hydro-resources remains untapped. Currently, the country has more than 80 spots for small hydro power plants construction. However, numerous legal issues such as painful process of obtaining permissions to join electrical grid, approval of water usage schemes, lack of financial resources, as well as complicated procedures for land usage scare off potential investors.
UNDP’s technical support to small hydro power projects aims to demonstrate advantages of the technology. For example, 1.4-megawatt Kalininskaya hydro power plant operated by a Kyrgyz-French private company could not operate in full capacity because water inflow is disrupted by dilapidated channels. UNDP helped design an improved channel able to boost energy production by 30 percent. Another foreign investor, a gold mining company from Germany, is interested in operating a power station near Karakol City and consulting with UNDP about feasibility studies done earlier.
Apart from the clean energy, small hydro power plants have other advantages: they are cheaper and environmentally-friendly as opposed to big plants and open new economic opportunities for local populations. The future hydro power plant and a pumping station in Toguz-Bulak, for example, is expected to employ 20 people and provide new farmlands with water to be used by 1,000 families living in surrounding villages. Mr. Halbekov says he is glad that the future plant will not only power his coal mines with clean energy, but also provide for food and job security of local residents.
Kyrgyzstan ranks third in the CIS in terms hydro power resources after Russia and Tajikistan. But this potential can only be unleashed if the country sets clear and transparent “ground rules:” proper state regulation, financing options, transparent procedures.