Kyrgyz Republic secures €61.7 million EBRD loan to modernise electricity grid

• EBRD providing sovereign loan of up to €61.7 million for modernisation of electricity grid
• Funds will support construction of 53 km, 500 kV transmission line and a 500 kV substation
• Project will help to improve reliability of electricity supply in Kyrgyz Republic

The European Bank for Reconstruction and Development (EBRD) is extending a €61.7 million sovereign loan to the Kyrgyz Republic to help it modernise 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. TC funds will be used to support project procurement and supervise construction works.

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 per cent of substations across the Kyrgyz Republic are more than 25 years old. Technical and commercial losses across the transmission and distribution network currently stand at nearly 14.6 per cent, well above international standards.

The modernisation is expected to deliver substantial environmental benefits, reducing electricity losses by 34 GWh annually and cutting GHGs by 3,323 tonnes of CO2e each year.

Beyond domestic benefits, the enhanced infrastructure will help the Kyrgyz Republic 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 neighbouring nations, contributing to the region’s broader energy transition.

The EBRD has been active in the Kyrgyz Republic since 1992, investing almost €1.15 billion in the country through 280 projects, mostly in sustainable infrastructure and the private sector.