Knowledge Note

"Sustainable Energy Subsidy Reform in Kyrgyz Republic "

Kyrgyz households enjoy some of the lowest electricity prices in the world at $0.01 per kWh, benefiting from the country’s abundant hydro resources. The growth in demand is outpacing supply, however, and in 2014, Kyrgyzstan went from being a net power exporter to a net importer. The sector is in poor financial shape with aging infrastructure, but concerns over public unrest have hampered efforts to increase prices. The World Bank, supported by ESMAP, is working with the regulator to develop a new Medium-Term Tariff Policy for 2018-2023, that will be adopted in Spring 2018, and under which the regulator plans to increase residential electricity tariffs. Apart from supporting analysis of the distributional impacts of tariff increases, ESMAP is funding communication and outreach to increase understanding in the population on why energy tariffs need to rise and to build acceptance for the new tariff policy.