Shareholders in Electric Stations, Kyrgyzstan’s national power provider, have given the green light to a proposed co-operation deal with Liglass Trading, a little-known Czech company. They voted in favour of the utility’s deal with Liglass during an emergency shareholders meeting on August 4.
Under a contract signed on July 10, the partners will set up a closed joint stock company known as Upper Naryn HPPs for the project. Liglass is supposed to take charge of construction, building two large hydroelectric power plants (HPPs) on the River Naryn, as well as 10 smaller HPPs. Electric Stations, for its part, will devote its efforts to attracting around US$230 million worth of financing.
Most of the money will be used to cover the cost of building the two larger HPPs – the Naryn-1 and Akbulun stations. When finished, the cascade will have a generating capacity of 280 MW.
The Kyrgyz utility named Liglass as the winner of the tender for the contract in May of this year. Its decision has aroused some controversy, as there is little evidence that the Czech company has the experience or the capital needed to execute the project. Reports from Kyrgyz and Czech media agencies indicate that Liglass may have misrepresented its capabilities, and Kyrgyzstan’s Foreign Ministry said in March that the company did not appear to have a solid financial foundation.
Nevertheless, 97.6% of Electric Stations’ shareholders voted in favour of the deal at last week’s meeting. Subsequently, the Kyrgyz utility reported that it had taken precautions to ensure that its investments would be protected. Specifically, it said that the contract in question provided for the scheme to be terminated and all funds invested in the joint venture’s (JV) authorised capital returned if Liglass did not meet all of its obligations.
Kyrgyz authorities had previously named RusHydro, Russia’s state hydropower concern, as its main contractor for the Upper Naryn project. Its deal with Electric Stations called for the construction of four large HPPs on the Naryn – Akbulun, Naryn-1, Naryn-2 and Naryn-3. But the Russian company exited the deal in 2015, citing problems with cash flow as the reason for its departure.