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Review of the Investment Climate and Market Structure in the Energy Sector of Kyrgyzstan

Published in 2007


The In-depth Report on the Investment Climate and Market Structure of the Kyrgyz Republic was developed in the second half of 2007 and peer-reviewed by the Investment Group of the Energy Charter in October 2007.

It was noted that Kyrgyzstan acceded to the World Trade Organisation (WTO) in 1998 and has been pursuing market-based reforms, privatisation of state-owned enterprises and promotion of foreign direct investment (FDI) to support economic development. The Government has taken steps to improve the legal, regulatory and institutional frameworks for investment in the country, adopted a freely convertible currency regime, and there are no foreign exchange controls. Foreign investors are entitled to the same treatment as local investors, and even though ownership of land by foreign investors is restricted, land can be leased on a long-term basis. The terms and conditions of international treaties prevail in cases where they establish rules that are different from those of the laws of Kyrgyzstan.

The potential role of Kyrgyzstan as one of the mainstays in bridging electricity supply and demand in the region and the wider area is important, and in this respect the country acts as a supplying partner to other countries, by using the hydroelectricity generation projects already in service. The projects that are currently being developed will enhance the role of Kyrgyzstan as supplier of electricity. The importance of greater transparency and non-discrimination in electricity sector projects, but also in the oil and gas industry of the country, is highlighted, as concerns about granted exclusivity may deter future investors. Also noted is the obvious need for expediting the process of implementing the reform programmes and the Government was encouraged by its peers to take more decisive actions.

The conclusions of the Review and policy recommendations to the Government of the Kyrgyz Republic were adopted by the Energy Charter Conference in December 2007. These conclusions and recommendations, as well as the main findings of the Energy Charter Secretariat related to the Report, are included in a single publication along with the Report itself. While the Secretariat produced the first draft, the text of the Report in the publication conforms to the version reviewed by the Kyrgyz authorities.

The Review of the Investment Climate and Market Structure in the Energy Sector of Kyrgyzstan is available in English.