Kyrgyzstan Power Key View

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Kyrgyzstan Power Key View

• 21 Jan 2022
• Kyrgyzstan
• Power

Key View: The short-term outlook for Kyrgyzstan's power sector remains challenging in early 2022. Water levels at the vital Toktogul reservoir are still at record lows, limiting output from the hydropower sector, which accounts for over 90% of domestic electricity generation. Alongside significant transmission and distribution losses, weaker hydropower output is causing power shortages and leaving Kyrgyzstan increasingly reliant on fragile regional electricity imports. Investment is needed to build out capacity and modernise the national grid, however the high barriers to foreign investment make improvements unlikely in the short term at least.

Headline Power Forecasts (Kyrgyzstan 2020-2026)

Indicator	2020e	2021e	2022f	2023f	2024f	2025f	2026f
Generation, Total, TWh	15.9	15.0	15.0	14.9	15.0	15.2	15.4
Consumption, Net Consumption, TWh	12.1	11.8	12.0	12.1	12.2	12.4	12.5
Capacity, Net, MW	4,286.0	4,286.0	4,286.0	4,286.0	4,526.0	4,526.0	4,526.0
e/f = Fitch Solutions estimate/forecast. Source: EIA, Fitch Solutions

Latest Updates And Structural Trends

• The Toktogul reservoir is the main source of hydropower in Kyrgyzstan and an extended drought is putting significant pressure on the sector. Water levels have fallen further in Q4 2021, reaching 10.7bcm on December 13 2021, down from 12.3bcm at the end of September 2021. Kyrgyzstan is restricting the release of water from the dam to support the recovery of water levels which will impact on neighbouring states.
• As a result of the poor outlook for the hydropower sector, we are forecasting minimal growth in total power generation of less than 0.3% in 2022, following an estimated downturn of 5.9%, to reach 15.0TWh. Heavy transmission and distribution losses mean power rationing is increasingly likely.
• Kyrgyzstan has moved to reduce fuel subsidies and increase electricity prices for select users over recent quarters, however the outbreak of widespread public unrest in neighbouring Kazakhstan in January 2022 may lead the government to delay planned reforms. Kyrgyz peacekeepers have been reported to be guarding key infrastructure in Kazakhstan, including power plants.
• There is also some risk arising from the growing reliance on regional electricity imports. Kyrgyzstan agreed to import electricity from Uzbekistan however Uzbekistan is moving to curb gas exports, raising concerns that electricity exports could also be cut. The Uzbek government has also delayed plans to increase fuel and electricity prices in order to avoid the unrest seen in Kazakhstan.

This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.