Kyrgyzstan: Electricity Sector Research Report 2009

Since the majority of Kyrgyz mini-hydropower plants require reconstruction rather than construction from the ground up, their payback period would not exceed 5-10 years. Many mini-hydropower plants, partially constructed and abandoned in 70th after the commissioning of large scale hydropower plants, have preserved dams and other capital facilities, which would have been costly to build. Although mini-hydropower plants cannot become a meaningful alternative to large power stations, they can be regarded as a good local investment solution. Another commercially viable project is an initiative to privatize and subsequently reconstruct Bishkek heat power plant which is located in the most developed, power-intensive and still energy-scarce region of Kyrgyzstan. However, the success of this project is highly contingent on clear and consistent tariff policy of the state.

These and other potential investment opportunities in the Kyrgyz electricity sector have been addressed in the relevant marketing research conducted jointly by MGN Capital and Kalikova & Associates Law Firm. The report provides an overview of current market trends and growth prospects for the industry, the electricity supply and demand analysis, and an update on the latest changes in energy legislation.

The Electricity Sector Market Research Report is intended to provide a comprehensive and strategic review of the insti tutional arrangements and market structure for the electricity sector in Kyrgyzstan. This research report specifically includes extensive description of the industry regulators as well as an analysis of the key relevant laws.

With the privatization of the electricity sector's distribution company planned for 2009, it is crucial for investors to understand the structure of the ndustry, the relevant government bodies and the laws regulating it.

Based on this present research report is structured as the following:

• The first part aims to enhance potential investors' understanding of companies involved in delivering electricity to consumers (generation, transmission and distribution) and gives a comprehensive description of each of these sectors of the market;
• The second part discusses current issues and challenges in the Kyrgyzstan electricity sector;
• The third part provides an overview of potential investment opportunities.