Kyrgyzstan: The decision to raise electricity rates was promoted by the World Bank
Ferghana.Ru reported earlier that the government of Kyrgyzstan made a decision to raise the tariff for electricity by almost twice – from 70 tyin to 1.5 som per one kilowatt/hour for all customers effective of January 1, 2010. Besides, effective of July 1, 2010 one kilowatt will cost 1.9 som ($1=43.8 som). In the first half of the year the cost of one gigacalorie (heating and hot water) will be 1050 som while as of July 1 the rate will be raised to 2.5 thousand som.
The governmental decree also assumes that effective of 2010 the electricity may be supplied on prepayment basis.
Own sources of Ferghana.Ru report that the government of Kyrgyzstan made such unpopular step due to conditions, set by the World Bank (WB) delegation that had visited Bishkek on October 31-November 4.
WB promised $4 million to Kyrgyz energy sector for repairs of heat stations in Bishkek and Osh in case the government sets the rate, close to prime cost. The half of promised $4 million will be offered as grant while the rest part will supplied as loan.
Recognizing the unpopularity of raising the tariff for electricity, WB is considering the allocation of $30 million to Kyrgyzstan in order to support poor people. Today, President Kurmanbek Bakiev signed the decree on compensations n in concern with higher rates for electricity and heating.
In accordance with presidential decree, effective of January 1, 2010 the salary of all governmental employees, whose compensation is not higher than 5000 som, will be raised for 200 som. Senior citizens, whose pensions are less than 4000 som, will also see the raise for 200 som.
In addition, effective of January 1, 2010 the size of monthly allowances will be increased by at least 25 percent. The presidential decree also says the effective of next year the payment of monthly compensations, substituting privileges, will be raised from 1000 som to 7000 som.
It has to be mentioned that hosting WB delegation on November 3, Kurmanbek Bakiev expressed hopes for active involvement of Kyrgyzstan in WB development of key short and medium term priorities in the field of water and energy issues in Central Asia. Specifically, the World Bank was offered to consider the financing of projects, related to energy security in Kyrgyzstan.
Kyrgyzstan has access to WB credit sources, based on «utterly preferential conditions». WB interest-free loans are offered for 40 year term with 10 year period of payment’s delay. Overall, by now Bishkek has received over $857 million from WB.
