The European Bank for Reconstruction and Development (EBRD) says it is extending a €61.7 million sovereign loan to Kyrgyzstan to help it modernize its electricity grid.
The loan, complemented by an investment grant of up to €3 million and technical cooperation funds of €3 million, will help to finance critical upgrades to the national electricity transmission infrastructure, leading to a more reliable supply, better integration of renewable energy and reduced greenhouse gas (GHG) emissions.
The financing will support the National Electric Grid of Kyrgyzstan, the country’s majority state-owned electricity transmission and distribution company, in constructing a new 53 km, 500 kV transmission line between the towns of Kemin and Balykchy near Issyk-Kul in the north-east of the country. The funds will also allow for a new 500 kV substation to be built in Balykchy.
The country’s hydro-rich electricity sector has faced mounting challenges from decades of underinvestment and ageing infrastructure. About 90 percent of substations across Kyrgyzstan are more than 25 years old. Technical and commercial losses across the transmission and distribution network currently stand at nearly 14.6 percent, well above international standards.
The modernization is expected to deliver substantial environmental benefits, reducing electricity losses by 34 GWh annually and cutting GHG emissions by 3,323 tons of CO2 equivalent each year.
Beyond domestic benefits, the enhanced infrastructure will help Kyrgyzstan to become a regional exporter of green energy. With improved grid stability and interconnection capacity, the country will be able to export surplus clean hydroelectric power to neighboring nations, contributing to the region’s broader energy transition.
