Kyrgyzstan to Spend Part of Russian Loan on Kambarata-2



BISHKEK, Oct. 25 (Interfax) - Kyrgyzstan will use $100 million of a $300-million state loan provided by Russia to build the Kambarata-2 hydroelectric power plant, Kyrgyz Finance Minister Marat Sultanov said in parliament on Friday.

The Kambarata-2 project has already received $30 million of this amount, and the remaining $70 million will be allocated next year, Sultanov said. The Russian loan will be invested in
Kyrgyzstan's Development Fund, the minister said.

"Some of this money will be used to form the fund's charter capital of 600 million som - less than $15 million. The remaining amount will be transferred to the fund itself," Sultamov said.

Kyrgyzstan's Development Fund earlier allocated $33 million to the Electric Power Plants open joint-stock company, which is responsible for building the Kambarata-2 hydroelectric power plant. The money was provided in the form of a $20-million loan and a $13- million loan issued on September 5 and October 16, respectively.

The fund recently suspended its efforts to fund the project. It is now waiting for Electric Power Plants to fulfill earlier agreed conditions, including the construction of the Kambarata-2 facility, an additional issue of shares for purchase by the fund and a business plan that would guarantee the project's seven-year payback period. The company will also have to confirm the possibility of selling the entire amount of electricity to be generated by the power plant at cost effective prices and to draft programs intended to secure more money to put the facility's second and third units into operation.

The Kambarata-2 hydroelectric power plant, which is
Kyrgyzstan's independent project, forms part of the Naryn River cascade of such facilities. Its designed capacity is 360 megawatts. The construction of the Kambarata-2 station was launched in 1986. It was then suspended and resumed in 2007.

Russia's Inter RAO UES (RTS: IRAO) and Kyrgyzstan's Electric Power Plants are establishing a joint venture to build the Kambarata- 1 hydroelectric power plant.

February 2, 2009, the Kyrgyz government approved an agreement on a $300-million state loan at 0.75% interest from Russia. The loan can be repaid over the 2016-2049 period.