BISHKEK, Kyrgyzstan

09/26/2012

Moscow-based utility JSC RusHydro and Kyrgyzstan's JSC Electric have announced a plan to develop four hydroelectric stations in the Kyrgyz Republic.
The four hydropower plants will have a combined capacity of 191 MW when complete, with a price tag near US$425 million. Each plant will take about three years to complete, though RusHydro says it expects much of the work to be executed simultaneously.

The stations will be set up in a 50/50 joint venture between RusHydro and JSC Electric.

Coordinating the project are the Russian Federation's Ministry of Energy and the Kyrgyz Republic's Ministry of Energy and Industry.

The Russian Federation will provide the joint venture with half the necessary funds, while ensuring that the group obtains a loan facility to cover the remainder of the construction cost.

Meanwhile, Kyrgyzstan will contribute land rights and other "intangible" assets, according to RusHydro.

A number of stipulations have already been established for the duration of the project's payback period, including:

The Kyrgyz government will transfer a 25% share of the project under RusHydro's trust management;

The Russian party will have strategic and operating management of the project, including the majority on the joint venture's board of directors and management board;

Kyrgyzstan will exempt the joint venture from property tax and land-use taxes; and

Russia and Kyrgyzstan will exempt construction equipment, plant equipment and vehicles from customs payments.

The project's financing scheme and terms of RusHydro's involvement in the project won't be determined until after feasibility studies are complete, the company says.