The Technical Assistance aims to update the project’s technical feasibility, enhance its environmental and social sustainability, and strengthen its financial and commercial frameworks
WASHINGTON, October 31, 2023—The World Bank’s Board of Executive Directors approved today $5 million for the Technical Assistance for Kambarata-1 Hydropower Plant Project. This Technical Assistance (TA) aims to support the Cabinet of Ministers of the Kyrgyz Republic in updating the Feasibility Study of the Kambarata-1 Hydropower Plant (HPP) Project, enhancing its environmental and social sustainability, and strengthening its financial and commercial frameworks.
The Kyrgyz Republic’s mountainous terrain provides it with a wealth of hydropower potential, less than one-fifth of which has been utilized. Greater use of hydropower energy sources is in line with the country’s commitment to transition to cleaner energy sources, thus ensuring a more sustainable and greener growth path. Kambarata-1 HPP is expected to be among the most cost-effective projects for expanding clean energy resources across the Kyrgyz Republic and the Central Asia region. It has the potential to address the country’s energy security challenges, generate significant revenues from energy exports while improving downstream HPP operations and water management. The hydropower plant will also contribute to global decarbonization efforts by supporting the integration of other renewables such as solar and wind, thereby reducing dependence on fossil fuels.
“The Kambarata-1 HPP is a critically important project that has the potential to bring huge benefits in clean energy generation, regional cooperation, water security, and environmental safeguards across Central Asia. The World Bank’s technical assistance will help the Cabinet of Ministers of the Kyrgyz Republic put the country’s abundant hydropower potential to the benefit of the people and region, while strengthening the governance and financial sustainability of the energy sector,” said World Bank Regional Director for Central Asia Tatiana Proskuryakova.
The financing from the International Development Association (IDA), the World Bank’s concessional lending arm, will be used to: (i) update previous studies to verify the technical feasibility and economic viability; (ii) strengthen the environmental and social framework; and (iii) develop a fiscally sustainable financing plan and commercial framework. Furthermore, this technical assistance will help increase the Kambarata-1 HPP benefits to larger constituencies through developing a benefit-sharing mechanism whereby a portion of the Kambarata-1 HPP’s revenues could potentially be channeled to various socio-economic programs and initiatives.
“Kambarata-1 is a transformative greenfield regional hydropower project that will power the clean energy future of the Kyrgyz Republic and Central Asia. This technical assistance will help to develop the project in a sustainable and bankable way thereby enabling the mobilization of necessary financing around it,” said World Bank Country Manager for the Kyrgyz Republic Naveed Hassan Naqvi.
The financing for this project is provided on highly concessional terms through the International Development Association (IDA). Specifically, $3 million is a zero-interest credit, with repayments eased over 50 years and a 10-year grace period, while $2 million is allocated in the form of a grant from a multi-donor trust fund, which requires no repayment.
The World Bank’s overall mission is to end extreme poverty and promote shared prosperity on a livable planet. The World Bank’s program in the Kyrgyz Republic currently consists of 22 projects supporting the modernization and development of various sectors, with commitments of over $1 billion.