AS WINTER APPROACHES, KYRGYZSTAN FACES TOUGH CHOICES IN ITS ENERGY SECTOR

Following this summer's Andijan refugee crisis, when the Kyrgyz government transferred 440 Uzbek citizens to a third country to satisfy its obligations as a UN member, official Tashkent canceled a bilateral agreement on supplying 350 million cubic meters of natural gas to Kyrgyzstan. Having a protracted crisis in the energy sector, which in past years has brought significant losses due to poor and corrupt management, Kyrgyzstan is facing a financial and logistical stalemate in importing gas and exporting electricity as winter approaches.

After Uzbekistan curbed its gas supply agreement, Kyrgyzstan had to rely on Kazakhstan's KazTransGaz to re-sell the Uzbek gas for higher prices. As one of the conditions, KazTransGaz demanded that Kyrgyzstan repay a three-year debt amounting to $17.5 million. Since the beginning of August, Kyrgyzstan overpaid 20% of the normal gas price with KazTransGaz, sliding further into a budget deficit. [Read More.]