EBRD Approves €61.7M Loan To Kyrgyz Republic To Modernize Electricity Grid, Build 500 kV Line And Substation, Cut 3,323 Tonnes of CO₂ Annually

The European Bank for Reconstruction and Development (EBRD) is providing a €61.7 million sovereign loan to the Kyrgyz Republic to support the modernisation of its electricity grid. The financing package also includes an investment grant of up to €3 million and technical cooperation funds of €3 million, which will help cover project procurement and supervise construction activities. The funds will enable critical upgrades to the country’s national electricity transmission infrastructure, aiming to improve supply reliability, facilitate better integration of renewable energy, and reduce greenhouse gas emissions.

Specifically, 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-kilometre, 500 kV transmission line between Kemin and Balykchy, near Issyk-Kul in the north-east. In addition, a new 500 kV substation will be built in Balykchy to strengthen the network. Kyrgyzstan’s hydro-rich electricity sector has faced longstanding challenges due to ageing infrastructure and decades of underinvestment. Nearly 90 percent of the country’s substations are more than 25 years old, while technical and commercial losses across the transmission and distribution network remain high at almost 14.6 percent, well above international standards.

The modernisation is expected to deliver significant environmental benefits, reducing electricity losses by an estimated 34 GWh per year and cutting greenhouse gas emissions by around 3,323 tonnes of CO₂ equivalent annually. In addition to domestic advantages, the upgraded infrastructure will position Kyrgyzstan as a regional exporter of green energy. With improved grid stability and enhanced interconnection capacity, the country will be able to export surplus hydroelectric power to neighbouring nations, supporting the broader regional energy transition.

The EBRD has been active in Kyrgyzstan since 1992, investing nearly €1.15 billion across 280 projects, with a focus on sustainable infrastructure and private sector development. This latest investment underscores the bank’s continued commitment to strengthening energy systems and supporting a cleaner, more reliable energy future for the country.