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Kyrgyzstan Plans 75 Projects Costing $13 bln over 5 Years

Tuesday 15 January 2013

BISHKEK ‘Interfax) – Kyrgyzstan has given the green light to a long-term $13 bln investment programme intended to transform the country’s economy and end its dependence on the Kumtor gold mine. That will see it aim to leverage international funds to power projects in mining, infrastructure and agriculture.

The 2013-17 investment programme was approved by President Almazbek Atambaev, Prime Minister Zhantoro Satybaldiyev, and other members of the Council for National Development on January 14. It replaces a $7 bln investment programme proposed by Atambaev in December, and includes additional investment projects. Bishkek says it plans to target international investors and donors to finance the plans.

Funding from Russia for the Kambarata-1 hydropower plant has already been secured, and the government is in talks with China over the planned China-Kyrgyzstan-Uzbekistan railway. The focus of the programme will be on the agriculture, communications, infrastructure, mining and engineering.

The most costly projects will be implemented in energy. Over the five years, the plan is to raise and use $78.232 bln for 60 projects. The main energy projects will be building the 500 kV Datka-Kemin high-tension power lines ($390 mln), the modernization of power lines in the south of the republic ($208 mln), the building of Kambara GES-1 hydropower plant ($3.4 bln), the Verkhnee-Naryn hydropower cascade ($412 mln), Kara-Kechinsk TES thermal power plant ($2.3 bln), and the reconstruction of At-Bashinsk hydropower plant, Bishkek combined heat and power plant, and the development of small hydropower plants.

In the mining sector, the plan is raise $3.13 bln in foreign investments for 16 projects. The Djerui project (gold reserves - around 100 tonnes) will begin this year, as will Taldy-Bulak (gold, copper), Ishtamberdy (30 tonnes of gold), and Trudovoye I Kensuu (tin – 148,000 tonnes, wolframite – 95,000 tonnes). Kumtor project operations will continue. Next year will see the start of projects at the gold ore deposits Taldy-Bulak Levoberezhny, Bozymchak, Kuru-Tegerek, Zardalek, Tyuk-Kargasha, Kara-Keche I Sulyukta, and the Chaaratskaya group.

In the field of transport and communications, reconstruction will continue of roadways of general significance to the republic, the reconstruction of airports, and the building of a fiber-optic trunk communications network. The biggest project in transport will be the start of the building of the $1.5 bln China-Kyrgyzstan-Uzbekistan highway in 2015. There are 24 projects totalling $141 mln intended for agriculture. Investment is envisioned as mainly being raised for the building of irrigation networks and the purchase of agricultural equipment. This year will see the start of the building of infrastructure for Kyrgyzstan’s commodity transport system for the export of agricultural product to Customs Union countries (project price tag: $40 mln). Starting in 2014 will be projects for the development of production-logistics complexes around Central Asia’s biggest markets Dordoi and Kara-Suu ($40 mln), the creation at the international airport Manas of a hub-centre for cargo and passenger flight ($280 mln), and the construction of a technopolis for the textile and weaving industry ($22.4 mln).

Economic developpment

Speaking at the council meeting, Atambaev said that Kyrgyzstan aims to expand the economy by at least 7% per year over the next five years, which would bring GDP per capita to $2,500 by 2017. That is equivalent to no more than 10% of the same indicator in neighbouring Kazakhstan, which projects GDP per capita of $24,000 in five years time.

Atambaev also said he wants to see the country enter the top 30 in the World Bank’s Doing Business index by 2017 (it currently stands in 70th place), and to advance from 154th place to among the top 50 countries on Transparency International’s corruption perceptions index, Kabar reports. Such ambition would clearly help Kyrgyzstan access a larger pool of international financing options.

“Kyrgyzstan must become a strong and democratic state with a stable political system and a rapidly growing economy which will ensure decent living standards for the people,” Atambayev told the council meeting, according to Reuters.

Kyrgyzstan’s economy, which is mainly based on the mining, agriculture and tourism sectors, has suffered several setbacks in the last decade. The country’s two revolutions in 2005 and 2010 slashed growth in both years, and have deterred investment. Just as the economy was getting back on track in 2012, a fall in gold production at the Kumtor mine caused the economy to contract by 0.9% in 2012 according to official statistics, although the IMF forecasts growth will rebound to 8.5% in 2013.

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