IMF says Kyrgyz electricity sector faces financial difficulties

The International Monetary Fund (IMF) following its latest visit to Kyrgyzstan under a 2021 Article IV consultation concluded that the country's electricity sector is in a difficult financial condition, is poorly managed and is in urgent need of investment to improve service quality.

The IMF mission recommended that, in order to strengthen its financial and operational viability, the ex-Soviet state should develop a medium-term electricity sector reform plan to optimise costs, strengthen governance and accountability and improve revenue generation.

While commercial tariffs are above cost-recovery, Kyrgyz residential tariffs stand well below this level, leading to inefficient cross-subsidisation, IMF noted.

Any adjustment in residential tariffs, as recently announced by the authorities, also needed to be paired with targeted social assistance to protect the most vulnerable households, the Fund added.