This chapter briefly describes the main demographic, macro-economic and environmental issues in Kyrgyzstan of relevance to the transport sector. It presents an overview of the urban public transport system in the country, as well as the level of greenhouse gas emissions and air pollution in the main urban centres. It also analyses the major health risks associated with the main air pollutants. This review forms part of the justification for the need for public support for investments in the transport sector.
Promoting Clean Urban Public Transportation and Green Investment in Kyrgyzstan
Green Finance and Investment
6. Macro-economic and environmental overview
Abstract
6.1. Demographic and macro-economic situation
6.1.1. Geography, territorial division and demographic development
The Kyrgyz Republic is a landlocked country in the north-east of Central Asia, on a territory of 199 951 km2. It shares a border with Kazakhstan to the north, Uzbekistan to the south-west, Tajikistan to the south, and China to the east and south-east.
Although Kyrgyzstan’s altitude ranges between 394 m and 7 439 m above sea level (at Victory (Pobeda) Peak), almost 90% of the country lies above 1 500 m (the average elevation is 2 750 m). According to estimates, less than 20% of the country is suitable for comfortable living (GoK, 2016[1]). The territory is characterised by high seismicity (NSC, 2016[2]). Kyrgyzstan’s high-mountainous landscape is exposed to dangerous processes, with over 20 of the 70 global hazardous natural processes and phenomena that can cause significant damage to the population, economic activities and infrastructure occur in the country (GoK, 2016[1]).
Land used by farms makes up about 5% of the country’s area, of which 61% is irrigated ploughed fields (3.2% of the total area).1 Pastures – mostly high-altitude steppes – have a marginal share among the farmlands (0.07%). The rest of the rural area is covered by mountains, forests and glaciers. Negative climatic impacts affecting agriculture include drought and lack of water resources, which could further decrease the already limited arable area.
The nomadic empire called “the Kyrgyz Kaganate” first became part of the Russian Empire in 1876, and in 1936 joined the USSR as the Kirghiz Soviet Socialist Republic (also referred to as Kirghizia). In 1991, Kyrgyzstan proclaimed itself an independent and sovereign state. In 1993, the country officially became the Kyrgyz Republic. All fundamental state institutions and a currency were also established in 1993. A constitution defines the political system of the republic. The President, elected for a six-year term, is head of state and the Prime Minister is head of government.
The national language is Kyrgyz (which belongs to the north-western group of Turkic languages), and Russian is the other official language (since 1997). Both languages are used for administrative purposes and both are relatively widely spoken among the population (depending on the region).2 According to law, however, the Kyrgyz version of a document is considered to be its original version.
The administrative and territorial division of the Kyrgyz Republic comprises seven oblasts3 (regions) administered by appointed governors; and two cities (Bishkek and Osh), which are administratively independent, with a status equal to a region. The capital of Kyrgyzstan is Bishkek (1 027 200 inhabitants) – also the most populated city in Kyrgyzstan. The second most populated city is Osh (299 500 inhabitants).4 With the exception of Jalal-Abad city, all other towns have fewer than 100 000 inhabitants.
The Kyrgyz Republic is also organised into 40 administrative rayons (districts), 31 towns (including cities of Bishkek and Osh), 9 urban settlements, 3 villages and 453 aiyl aimak (village communities). Table 6.1 shows in detail the population density of each region. In 2018, the average population density was 31.3 inhabitants/km2.
Table 6.1. Population density by region, 2013-17
(people per km2)
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
The population is unevenly distributed across the country due to its extremely mountainous terrain. Most economic activities take place within settlements, as well as in a relatively small buffer zone of 5 km around settlements. Settlements are usually situated in the lowlands or intermountain basins and mountain valleys, accounting for about one-seventh of the total area (GoK, 2016[1]).
In 2017 the urban/rural population distribution was 34% to 66% (NSC, 2018[3]). In 2018, 34% of the population was below working age, whereas 59% are of working age and 7.5% are above the working age.5 Over half the population (54%) is under the age of 25. The ethnic composition of the population includes Kyrgyz (73.3%), Uzbeks (14.7%), Russians (5.6%), Dungans (1.1%), Uyghurs and Tajiks (both 0.9%) and other nationalities (3.4%).6
The natural population increase in Kyrgyzstan is compared to other Eastern Europe, Caucasus and Central Asia (EECCA) countries in Figure 6.1.
Figure 6.1. Natural increase of population in selected EECCA countries, 2000-13
Note: 2012 and 2013 data for Tajikistan not available.
Source: (CIS, 2014[4]), Commonwealth of Independent States in 2013 – Statistical Yearbook.
6.1.2. Political and macro-economic situation
The first two decades of independence were marked by struggle. Unmet expectations resulting from prevailing corruption and nepotism culminated in two revolutions. The first revolution took place in March 2005, but it did not live up to expectations and another revolution was carried out in 2010 leading to a change of government in April 2010. After this event, a national referendum was organised and a new Constitution defined the parliamentary form of the government. In this way, Kyrgyzstan became the first parliamentary republic and the only country in Central Asia where the president is limited to a single (six-year) term (World Bank, 2019[5]).7
While a certain stability in the political environment was achieved, external shocks as well as a heavy reliance on gold exports have contributed to growth volatility. The estimated gross domestic product (GDP) in 2018 was KGS 557 113 million (USD 8 081.9 million), and has growing at an average annual rate of 4.2% since 2014 (see Figure 6.2).8 The GDP per capita (purchasing power parity) reached USD 1 331 in 2014, fell to USD 1 163 in 2015, and climbed again to USD 1 272 in 2017 (NSC, 2018[3]). This was caused primarily by the devaluation of the som in 2015 (see Section 6.1.5) – when measured in national currency, GDP per capita has been constantly rising (see Table 6.2).
The decline in economic growth in 2015 is attributable to a significant reduction in industrial production at the Kumtor Gold mine.9 The healthier 2017 and 2018 figures are mainly based on higher import tax collection; tax revenues as a share of GDP are projected to rise following the implementation of measures to expand the tax base (World Bank, 2019[5]).
Table 6.2. Gross domestic product per capita, 2007-17
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg); and the World Bank (https://data.worldbank.org) for the year-respective exchange rate.
Figure 6.2 shows the trends in GDP growth and inflation over 2007-17. Over that period, average annual GDP growth was 4.8% and the rate of inflation was 8.5% (since 2012, the pattern has become more stable). Inflation is expected to stay within the National Bank’s medium-term monetary targets (5-7%), with the rate for 2019 forecast at 3.0% and for 2020 at 3.5%. GDP growth is expected to be 4.0% and 4.4%, respectively.10
Figure 6.2. GDP and inflation growth rates, 2007-17
Source: World Bank (https://data.worldbank.org).
The size of the economy is rather small (as noted above, around USD 8.1 billion in 2018) and its reliance on two volatile sources – i.e. gold mining11 (10% of GDP) and remittances (27% of GDP in 2018) – makes it vulnerable to external shocks. Exchange rate depreciation (see Section 6.1.5) and economic and financial exposure to the Russian Federation are further severe downsize risks (World Bank, 2019[5]); (Moody's, 2019[6]).
Agriculture is a key economic basis of Kyrgyzstan’s economy, both by size of added value generated and by number of people employed. This sector (including fishing and forestry) produces 12-17% (ca. one-sixth to one-eighth) of the country’s GDP and provides the processing enterprises with raw materials and the population with food. Unfavourable weather conditions (late spring and early autumn frosts, high temperature, etc.), pollution and uncomplimentary land reclamation conditions (in some areas) limit the comprehensive use of agro-climatic and land resources (GoK, 2016[1]).
Generally, most services (e.g. education, health) and industries (e.g. electricity, water, and gas) are state-owned. On the other hand, the private sector is dominated by small enterprises, and remains the main driver of economic growth. According to data from the National Statistical Committee (NSC), GDP in 2018 was mainly generated by trade (18.2%), followed by manufacturing (15.2%) and agriculture, fishing and forestry (11.7%).12
The City of Bishkek and the region of Issyk-Kul report the highest gross regional products per capita (KSG 196 800 and KGS 138 000, respectively). The gross regional product of Osh region (KGS 31 100) is only one-sixth of that of the capital Bishkek (Figure 6.3).
Figure 6.3. Gross regional product per capita, 2017
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
Kyrgyzstan ranked 122nd out of 189 countries on the 2017 Human Development Index (HDI), down from 2010 when it ranked 109th (though, out of 169). Still, the country’s HDI value increased by 8.8% between 1990 and 2017 (from 0.618 to 0.672).13 In 2014, the World Bank re-classified Kyrgyzstan from a low-income to a lower-middle-income country based on its gross national income (GNI) per capita.14 In 2017, the country reached a GNI per capita of 3 620 (in current international dollars), and is thus approaching the 4 125 GNI per-capita threshold for classification as an upper-middle-income country.15
Chronic poverty and related food insecurity and malnutrition, climatic and environmental risks, gender inequalities, disparities in regional economic development and reliance on remittances remain major challenges. Influenced by economic growth over the last decade, poverty has been significantly reduced – in 2017 only 1.5% of the population (91 000 people) were below the international poverty line (USD 1.90 or KGS 43.3 per day per capita), compared to 42.1% (2.1 million people) in 2000.16
In 2016, employment was mainly in agriculture, forestry and fishing (26.8%); trade (15.6%); construction (12%); industry (10.1%); and education (8.7%). In 2015, the annual unemployment rate was 7.6% – and fell to 7.2% in 2016. Women account for over half of the unemployed – around 53%. The evolution of the national employment rate is shown in Figure 6.4 (NSC, 2016[7]); (NSC, 2018[3]).
Figure 6.4. Unemployment rate in pilot cities and surrounding regions, 2006-17
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
The region of Talas and Osh City report the lowest unemployment rates (2.5 and 5.1%, respectively). On the other hand, women experienced (on a country level) a higher unemployment rate overall of 9%: 8.9% in urban areas and 9.1% in rural areas. Men, in contrast, experienced unemployment rates of 6.5% overall: 7.5% in urban areas and 6.1% in rural areas (NSC, 2018[3]).
The large young cohort entering the working age group (see Section 6.1.1) enhances the country’s growth prospects (Moody's, 2019[6]). This will contribute to further GDP growth over the medium-term and help alleviate rural poverty. Remittances will continue to play a decisive role as growth in the agriculture and construction sectors is expected to remain modest (World Bank, 2019[5]).
In 2017, the average nominal per capita monthly income of the population stood at KGS 4 725 (USD 68.6), whereas monthly average nominal wages and salaries per employee, excluding small enterprises, were KGS 15 391 (USD 223.5).
6.1.3. Fossil fuel production and distribution
The country has minimal oil and gas production and depends on imports for these products, especially oil from Kazakhstan (or the Russian Federation) and gas from Uzbekistan (or Kazakhstan). In 2018, domestic production of natural gas stood at 27.3 million cubic metres, crude oil at 200 000 tonnes and coal/lignite at 2 306 000 tonnes. The production of coal/lignite and crude oil has risen seven and three-fold, respectively, since 2006. With about 70 deposits, total coal reserves are estimated to be about 27 billion tonnes, with a proven reserve of 1.3 billion tonnes.
Up to the present day, Kyrgyzstan’s economy has been experiencing a permanent shortage of coal due to the underdeveloped railway network (coal’s main transportation channel) and increased transportation costs, which have significantly limited market sales (Kyrgyzstan consumes its own nationally produced coal as well as imports from Kazakhstan and the Russian Federation).
Annual natural gas production remains mostly in the range of 20-30 million cubic metres since 2010 (see Figure 6.5). The substantial production increase seen in Figure 6.5 aimed to decrease dependence (and payment disputes) on gas imports from Uzbekistan. Until 2010, domestic gas production was able to cover only about 5% of consumption.17 Proven natural gas reserves are 5.6 billion cubic metres, but these reserves are difficult to exploit.18
The country has about 40 million barrels of proven reserves of crude oil. Currently, it operates seven oil and two gas/oil fields. However, the country only produces 1 000 barrels per day, whereas consumption is 16 000 barrels per day (2017 figures).19
Figure 6.5. Fossil fuels in Kyrgyzstan – volumes of production, 2006-18
Source: (NSC, 2016[2]), Environment in the Kyrgyz Republic, Statistical Compilation 2011-2015, http://stat.kg/media/publicationarchive/8c0e9d22-6bb6-4145-b1d6-8311da33521d.pdf; and the National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
Neftegaz supplies the south of the country with gas, while Gazprom distributes gas over the entire territory using gas from Uzbekistan.20
In 2006, Gazprom Neft set up Gazprom Neft Asia, a Kyrgyzstan-based subsidiary company and the largest operator in the Kyrgyz fuel market. The company’s assets include 108 filling stations, 8 oil tank farms, and 2 LNG tank farms.21
In 2013, a new co-operation agreement in the field of natural gas transmission, distribution and sales in the Kyrgyz Republic was signed between the Kyrgyz and Russian governments. Under this agreement, Gazprom acquired a 100% share in Kyrgyzgaz, the local gas company.
In 2014, Gazprom and Kyrgyzgaz signed a sales and purchase agreement for a 100% share in KyrgyzgazProm (renamed Gazprom Kyrgyzstan), a wholly-owned subsidiary of Kyrgyzgaz. Gazprom Kyrgyzstan has exclusive rights to import natural gas to the Kyrgyz Republic and own the national gas transmission and distribution systems.
In this context, cross-country gas pipelines have been modernised and in early 2018, the Bishkek City Administration had plans to purchase 320-350 natural-gas fuelled buses for USD 50 million from Gazprom. These plans have since been modified (see Section 6.2.4).
As can be seen in Table 6.3, the largest share of energy use comes from electric power, followed by coal and petrol for automobiles.
Table 6.3. Distribution of fuel and energy sources, 2011-16
(tonnes of conventional fuel equivalent*)
Note: * Conventional fuel equivalent: thermal unit of fuel used to compare different types of fuel. Combustion of 1 kg of solid (liquid) conditional fuel (or 1 m3 gaseous) is equal to 29.3 MJ (7 000 kcal)
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
Kyrgyzstan ranks among the 15 most energy-intensive countries in the world. Its energy intensity increased over 2010-14 from 181 kilogrammes of oil equivalent (koe) per USD 1 000 of GDP to 204 koe per USD 1 000 of GDP (World Bank, 2017[8]).
As domestic demand for energy is growing and in order to improve the country’s productivity and competitiveness, further investments in rehabilitation and new generation capacity will be needed. Clearly, energy efficiency investments are needed on both the supply and demand sides.
Energy security, energy efficiency and sustainable development are declared to be the main priorities of the Kyrgyz Government’s energy policy. They have been reflected in and implemented through many national programmes, such as Kyrgyzstan’s National Energy Programme 2008-2010, the Strategy for the Development of the Fuel and Energy Complex up to 2025 (GoK, 2008[9]), and the Programme on Energy Saving and Energy Efficiency Policy Planning 2015-2017 (Government Resolution No. 601 of 25 August 201522).
The latter programme focused on securing GDP growth that was less energy intensive. The programme aimed to bring about energy savings of up to 8 million tonnes of oil equivalent by 2025, which would also reduce carbon dioxide (CO2) emissions by up to 20%. At the same time, the annual GDP growth rate would be maintained at 3% and the annual increase in electricity consumption would grow by 4% (GoK, 2013[10]).
Although GHG emissions from the energy sector dramatically decreased between 1990 and 1995 (especially in comparison to other sectors), the energy sector is still a major consumer of fossil fuels in the country.
6.1.4. The electricity sector
The power sector is the most developed energy subsector in Kyrgyzstan. In 1990-2017, the country produced on average 90.3% of its annual electricity output from hydro power, and the remaining 9.7% from thermal power stations (Table 6.4).23 These numbers indicate the country’s high dependence on hydro resources, which has both positive (such as low electricity generation costs) and negative aspects (such as output sensitivity to seasonal and annual weather variations).24 In terms of access, almost 100% of Kyrgyzstan’s population is connected to the grid,25 which is remarkable given the country’s mountainous landscape.
In 2017, the total installed hydropower capacity was 3 091 MW – ranking Kyrgyzstan seventh amongst the South and Central Asian countries.26 Hydropower generation was 13 456 GWh. The country has a great number of large and medium-sized rivers offering significant hydropower potential, such as the Naryn River27 serving Toktogul hydroelectric power plant (HPP), with a generation capacity of 1 200 MW. However, whereas the total potential of hydropower is estimated at 140-170 TWh, only 10% of this has been exploited (IHA, 2018[11]). New generation capacities were added in 2010 (the USD 200 million 360 MW Kambar-Ata 2 hydroelectric power plant on the Naryn River).
While the share of small hydroelectric power stations currently remains insignificant, such stations are important for power supply in mountainous and rural areas where construction of large power lines is economically unprofitable. The total hydro energy potential of 172 rivers and water currents surveyed in the country exceeds 80 billion kWh per year. Technical improvements would enable production of an additional 5-8 billion kWh per year.28
The remaining 10% of electricity produced in the country comes from thermal power. The largest thermal power stations are in Bishkek and Osh. The total generation capacity of these two (mainly coal-fired29) combined heat and power (CHP) plants equals 716 MW.30 However, the generation capacity of these CHP plants is larger (18.8%) than their actual production share (9.7%), mainly due to their poor technical conditions. However, the CHPs are important suppliers of heat and electricity in the winter, when consumption is on average 2.9 times higher than in summer (UNISON, 2013[12]).
Table 6.4. Production of electric power in Kyrgyzstan, 2011-16
(million kilowatt-hours)
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
For many years, Kyrgyzstan has been a net exporter of electricity, primarily to Kazakhstan and Uzbekistan (Tajikistan and China), and mainly during the summer months. From 1990 to 2000, annual exports ranged between 6.6 and 9.4 million MWh; however, since 2000, exports have fallen by 87% (to 1.2 million MWh in 2017). These exports have been an important revenue source for the state budget as electricity to neighbouring countries is sold at a higher price than on the domestic market (which is subsidised by the government).
On the demand side, the structure of energy consumption has changed substantially since 1990. Industrial consumption has declined sharply, to 12.4% of fuel and energy resources and 19.1% of total electricity consumed, whereas the housing and utilities sector has risen to 43.5% and 76.6%, respectively. Transport accounted for 39.5% of fuel and energy resources and 0.4% of electricity consumption (GoK, 2013[10]). The electricity sector has some influence on the current state of and prospects for economic development. The sector accounts for about 16% of industrial production and 10% of state budget revenue (UNCTAD, 2013[13]).31 Between 2011 and 2018, electricity, gas and steam production accounted on average for 2.2% of country’s annual GDP.32
These relatively high contributions have been partly caused by the increasing domestic consumption of electricity – which grew between 1990 and 2017 by 51.7% – boosted by the low tariffs stemming from hydropower’s low production costs. However, higher domestic consumption (see Table 6.5) has meant lower exports and general shortages on the local market as well. This, combined with three drought years (2014-2016), led to an average annual shortage of 321.5 million kWh in this period. This saw, similar to the 2008-09 energy crisis, a reduction in the power supply to the general population (which uses electricity for heating, for instance) and to enterprises. Electricity needed to be imported from Kazakhstan and Tajikistan during 2014-2016, after which the country improved its efficiency and increased electricity production. As a result, Kyrgyzstan can now cover its own electricity needs and export to neighbouring countries (World Bank, 2017[8]).33
Interestingly, not only did electricity exports fall – imports also fell, from 6.4 million MWh to virtually zero in 2004. However, except for the 2014-2016 period, Kyrgyzstan’s electricity exports have always exceeded imports.34
Table 6.5. Distribution of electric power in Kyrgyzstan
(tonnes of conventional fuel equivalent*)
Note: *Conventional fuel equivalent: thermal unit of fuel used to compare different types of fuel. Combustion of 1 kg of solid (liquid) conditional fuel (or 1 m3 gaseous) is equal to 29.3 MJ (7 000 kcal).
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
The first reform of the electricity sector took place over 1999-2001, starting with the adoption of the Deregulation and Privatisation Programme of the open joint stock company (OJSC) Kyrgyzenergo (Resolution of the Kyrgyz Government No. 239 of 23 April 1997). The programme resulted in transforming the state monopoly into six natural monopolies unbundled by function (one generation, one transmission and four regional distribution companies).35
From 2010 onwards, the Government of Kyrgyzstan has undertaken several policy steps to reform the power sector, as demand was exceeding generation capacities. The Mid-Term Power Sector Development Strategy 2012-2017 (GoK, 2012[14]) was approved in 2012 (Resolution of the Kyrgyz Government No. 330 of 28 May 2012), and a detailed action plan for the reform of the energy sector followed in 2013 (GoK, 2013[15]).36 A medium-term tariff policy (MTTP) for electricity and heating was put in place (Government Resolution No. 660 of 20 November 2014) and amendments were made to the sector laws (Government Resolution No. 295 of 15 May 2012).
Since 2007, the Ministry of Industry, Energy and Fuel Resource has been the main policy-making authority in the electricity sector (in 2009 it changed its name to the Ministry of Energy and Industry).37 In 2015, the ministry was dissolved and its responsibilities (such as tariff-setting and licensing) were transferred to a new State Committee on Industry, Energy and Subsoil Use in the following year. An independent (government) regulator – the State Agency for Regulation of the Fuel and Energy Complex – was created in 2014.38 For a more just allocation of state funds to the power companies, the Kyrgyz Electricity Settlement Centre was established in 2015 to collect and provide data to the regulator. The National Energy Holding Company OJSC was set up in 2016 to facilitate the development of the energy sector (it was transferred state-owned shares in nine energy companies39) (Gassner et al., 2017[16]); (IHA, 2018[11]).
The National Energy Programme 2008-2010 and the Strategy for the Development of the Fuel and Energy Complex up to 2025 (GoK, 2008[9]) pointed out that unjustified tariffs combined with low payment collection were leading to financial losses for the generating and transmitting power utilities. Its goals of improving pricing and tariff policies in the energy complex were to be based on introducing the principles of energy sector self-sufficiency and phased elimination of cross-subsidies in the field of tariff formation. Tariffs were to cover all costs of production, transfer, distribution and marketing of electrical and thermal energy and to reflect the entire cost of electricity to each category of consumer. Social support (subsidies) was to be directed to low-end consumers on low incomes through the social protection system (GoK, 2008[9]).
Tariffs were increased in 2006 and 2008, but not in 2010 due to political unrest and the change of government. A tariff increase then took place in 2014 as part of the new (2014-2017) Medium-Term Tariff Policy (MTTP). According to the law on the power industry (Law No. 8 of 28 January 1997) electricity prices should be socially acceptable and non-discriminatory. This has resulted in the lowest tariff levels in the EECCA region. This situation is partly a result of affordable (i.e. subsidised40) electricity prices – households’ total expenditure ranges between 2.3-2.6% across population groups, which is very low even from the regional perspective. But it is also due to the high system loss from the net supply. This loss is estimated at 30-40%, comprising around one-third in technical losses41 and two-thirds in commercial losses (metering, billing or payment collection failures, and theft). The overall result is one of the highest losses worldwide (UNCTAD, 2013[13]); (Gassner et al., 2017[16]).
Although a two-tiered residential tariff was adopted in 2015, tariffs were only increased in the upper tier (above 700 kWh), hitting large residential consumers and the industrial sector disproportionally (which accounted only for 19% of residential consumption and 48% of total end-user consumption in 2016 (problem of cross-subsidisation). Despite higher cost-recovery levels, electricity sector revenues in 2016 were still 21% lower than generation costs (compared to 32% in 2014). Although the annual sector deficits declined (to KGS 4.9 billion in 2016, with 49% attributable to electricity and the rest to heating sector), the overall energy sector’s debt increased from KGS 200 million in 2010 to KGS 90.7 billion in 2016 (about 20% of GDP and 32% of the country’s overall stock of public and publicly guaranteed debt). The upcoming MTTP (2018-2021) aims to increase the lower-tier tariff and to introduce more targeted social safety net schemes, as foreseen in the National Social Protection Programme 2015-2017 (GoK, 2015[17]).
Reducing the consumption threshold for the lowest tariff from 700 kWh to 350 kWh – which is one option to decrease wasteful or uneconomical spending resulting from the lowest tariffs in the region – would result in nearly a 20% reduction in the cost-recovery gap and would relieve the government of its need to provide heavy support (soft loans) to the sector to meet spending requirements (Gassner et al., 2017[16]).
6.1.5. The financial sector
At the end of 2018, Kyrgyzstan’s banking sector consisted of 26 financial institutions – the National Bank of the Kyrgyz Republic (NBKR) and 25 commercial banks (including the Bishkek branch of National Bank of Pakistan) together operating 321 branches. The weight of foreign contributions in the capital of the banking system amounted to 47.3% of paid up assessed capital, or KGS 11.1 billion.42 Of the commercial banks, 15 had a majority share of foreign capital and a further 3 had a minority share. There were also 686 non-bank financial institutions active in the country, including credit companies (such as microfinance organisations and credit unions), insurance companies, investment and pension funds, and stock exchanges (NBKR, 2018[18]).
The NBKR – transformed from the State Bank of the Republic of Kyrgyzstan43 – licenses, supervises and regulates the activity of financial institutions in the country. It is also in charge of developing a strategy for financial-credit organisations in the Kyrgyz Republic (NBKR, 2018a). In terms of monetary policy, it is responsible for the stability of the som, introduced as the national currency of the Kyrgyz Republic in 1993. The NBKR has pursued a floating exchange rate policy.
In the first half of the 1990s, the banking system was dominated by the three major commercial banks – the Agricultural and Industrial Bank (Agroprombank), the Industrial and Construction Bank (Promstroybank), and the Commercial Bank of Kyrgyzstan – that succeeded the sectoral banks of the Soviet era. These banks not only remained under state control, they also kept a limited number of activities targeted at their focus sector and traditional clientele. In addition, 16 smaller financial institutions were created (either as banks or joint stock companies), which were originally mainly owned by the ministries and state-owned enterprises (i.e. created from their accounts). Their main areas of activity were foreign currency exchange and deposit accounts service.
Since the majority of these new commercial institutions only had a central office and no branches, commercial lending and other banking services to non-state customers – especially beyond the Chui oblast – were just as limited after 1991 as before (most banks required 120-200% collateral on loans and charged interest rates of 50-100% which reduced credit access by mainly low-income groups44). In 2013, 80% of agricultural companies seeking credit were asked to provide collateral equivalent to 120% or more of the total loan amount, usually in the form of real estate (OECD, 2016[19]).
In 1992, Kyrgyzstan joined the World Bank (WB) and the International Monetary Fund (IMF). In 1995, the country accepted the IMF’s obligations under Article VIII of the Articles of Agreement45 to refrain from imposing exchange restrictions on payments and transfers for current international transactions or from engaging in discriminatory currency arrangements or multiple currency practices without IMF approval.46 In 1998 – the same year that Kyrgyzstan became a member of the World Trade Organization47 – the domestic banking sector was negatively hit by the Russian financial crisis, resulting in high inflation (37% in 1999) and currency devaluation (87%),48 combined with unproportionally large loan portfolios in foreign currency.49 Influenced by the economic slowdown in 2014-15 and further depreciation of the som against the US dollar (Moody's, 2019[6]), Kyrgyzstan joined Kazakhstan, the Russian Federation, Belarus and Armenia as a member of the Eurasian Economic Union (EAEU) in 2015 (EEC, 2015[20]).
One of the main impediments to creating a competitive and market-oriented banking system in Kyrgyzstan comes from the demand side. Kyrgyzstan has traditionally been a cash-based society and trust in financial institutions is low. Following the Russian financial crisis, three major state-owned banks and other small commercial banks in Kyrgyzstan were forced into bankruptcy and placed under control of the NBKR, causing severe losses to depositors.
In general, access to banking services – especially to automated teller machines (ATMs) and payment terminals – is significantly higher in the capital than in the regions. In places where these services are available, cash withdrawal constitutes 90% of operations with bank cards (over 96% of the volume) (Hasanova, 2018[21]). Citizens’ financial literacy (as well as the tax collection rate) was to be enhanced in the second stage of the “State programme to increase the share of non-cash payments and settlements in the Kyrgyz Republic (2012-2017)”. For the 2018-2021 period of the programme, the National Bank aims to increase the cash and non-cash turnover ratio to 50/50.50
The banking sector is relatively small: at the end of 2018, the assets of commercial banks equalled KGS 219 983 million (of which liabilities made up KGS 182 300 million and equity KGS 37 683 million).51 Although there is a substantial number of non-bank financial institutions, banks dominate the financial sector, with a share of total assets equalling 92.8% (other local players are mostly underdeveloped and not integrated in the world financial system).52 The total assets of KGS 237 949 million constituted financial intermediation (assets/GDP) of 42.7%.53 More than half of these (55%) and nearly a half of the credit portfolio (49%) is held by five major banks (Hasanova, 2018[21]).
Money outside of banks totalled KGS 84 827 million at the end of 2018.54 This also has an impact on banks that are, in turn, in high demand for attracting additional credit resources. As of March 2019, the average interest rate on newly accepted deposits was much lower than the average interest rate of all deposits (1.33% and 0.17% against 6.33% and 1.41 – national and foreign currency, respectively), whereas the credit portfolio does not show a similar pattern. A high deposit interest rate would encourage savings and deposits. On the other hand, it would also consume banks’ revenues that would otherwise be available for loans. Therefore, it might be used as a financial tool to improve liquidity alongside the government securities or refinancing by the NBKR that Kyrgyz banks have taken advantage of in the past.
The total volume of newly issued credits by commercial banks in 2018 equalled KGS 76 612 million (in national currency) and an equivalent of KGS 37 104 million (in foreign currency). In 2008, the amount was KGS 9 083 million (in national currency) and an equivalent of KGS 15 281 million (in foreign currency).55
Throughout 2016, the NBKR decreased the base interest rate stepwise from 10.0% to 5.0% (NBKR, 2018[22]). The average weighted annual interest rate of newly issued credits decreased from 25.9% per annum (p.a.) in 2008 to 19.5% p.a. in 2018 (in national currency) and from 20.3% p.a. in 2008 to 9.7% p.a. in 2018 (in foreign currency). Therefore, if it was economically sound to take credit in foreign currency in 2008, it was even more so in 2018 (i.e. the interest rate in foreign currency had been cut by half since 2008 and was only a half than of the one in national currency in 2018). However, of the total amounts of newly issued credits in 2008 and 2018, those in national currency increased 8.4-fold between the years, whereas foreign currency only saw a 2.4-fold increase.56
As Figure 6.6 shows, since the early 2000s, interest rates on short-term credit (up to 12-months maturity) have decreased from the peak of 50-60% to be more comparable with medium (1-3 years) and long-term (over 3 years) loans. However, these rates have declined only moderately. At the beginning of 2019, the average weighted interest rates of newly issued three-year loans was 15.8% in national currency (Panel A in Figure 6.6) and 9.2% in foreign currency (Panel B).
Figure 6.6. Average weighted interest rates for newly issued credits, 1996-2018 (by maturity)
Source: National Bank of the Kyrgyz Republic (www.nbkr.kg).
The general level of dollarisation of the total loan portfolio has decreased significantly, from 63.2% in 2008 to 37.9% in 2018 (on average for the respective year), helping to reduce currency risks.57 The official average USD/KGS exchange rate in 2010 was 45.99 and 68.84 in 2018, meaning a depreciation of 49.7% (with the sharpest decline in 2015).58 The National Bank has continued to adhere to the floating exchange rate regime existing in the country. The bank’s exchange rate interventions – such as purchasing gold on the domestic market59 – have helped to smooth the sharp exchange rate fluctuations (NBKR, 2018[22]).
As of March 2019, the total deposits of individual persons in commercial banks equalled KGS 73 710 million (64.9% in national currency), those by legal entities equalled KGS 50 127 million (52.9% in national currency), while those by non-residents were KGS 9 932 million (19.8% in national currency).60 An important milestone was the adoption of the law and respective agency on protecting the deposits of individuals (Law No. 78 of 7 May 2008 “On protection of bank deposits”61).
Based on a recent NBKR survey of commercial banks’ clients, domestic banks forward 61.9% of the loan portfolio to the production sector (GDP) and 15.0% to finance imports (NBKR, 2018[18]).62
Only 2% of the total volume of all credits of KGS 130 629 million was in the transport sector, namely KGS 2 570 million (compared to at least 27.5% in the trade sector, for instance). Compared to other sectors – such as trade or agriculture63 – there is no substantial difference between the ratio of credits taken in national currency (1.9% of all credits) and foreign currency (2.1% of all credits), respectively.
As can be seen in Figure 6.7, the sectoral structure of the loan portfolio also shows high concentration since trade (through banks) and agriculture (through non-bank financial institutions) account for 46.3% of all loans. Whereas in national currency, the largest volume goes to agriculture (KGS 23.4 billion), the largest volume in foreign currency, as well as total volume, is in the trade sector (KGS 19.2 and 36 billion, respectively).
Figure 6.7. Total volume of credits, 2019* (by sector)
Note: * As of March 2019.
Source: National Bank of the Kyrgyz Republic (www.nbkr.kg).
The transport sector also faced the second highest average weighted interest rate of all sectors,64 at 16.5% p.a. in March 2019 (compared to only 7.2% p.a in procurement). There is a sufficient share of credits granted with longer tenors (40.5% of all credits); however, this category includes payback periods of three to four years, so the differentiation between mid-term and long-term tenors is not possible from the available NBKR statistics (where one to three years are considered mid-term). Credits with longer tenors made up 30.4% of all credits in national currency and 57.1% in foreign currency.65 As the available statistics are not broken down into types of customer, it is not possible to say how many SMEs were among the business customers. However, in general 27.9% of firms in Kyrgyzstan identified access to finance as a major constraint (OECD, 2013[23]).
In 2015-2016, the number of borrowers from banks increased by 24.9% (to 361 000 people), while borrowers from non-bank financial institutions and credit unions decreased by 31.8% and 5.3% (to 228 000 and 9 000) respectively (NBKR, 2018[22]).66 The regional distribution of total loan volumes was uneven, with Bishkek accounting for 56.3% in 2018 (based on average end-of-quarter values), followed by Osh (12.1%) and Jalal-Abad (9.5%).67
The loan-to-deposit ratio remained stable and relatively high in both 2008 and 2018, at 93% (average values for these two years).68 Still, there was sufficient liquidity on the Kyrgyz money market – one of the key segments in the country’s financial market – mainly due to an increase in the bank portfolio of liquid and reliable government securities, the notes of the National Bank and availability of refinancing operations conducted by the National Bank (NBKR, 2018[18]). At the end of 2018, the share of non-performing loans in the loan portfolio of the banking system was 7.5% (KGS 9.6 billion).69
The comprehensive Banking Law adopted in December 2016 (No. 206 of 16 December “On the National Bank of the Kyrgyz Republic, Banks and Banking Activity”70) was supposed to strengthen stability in the banking sector and become an important milestone in the development of banking legislation of the country. However, changes made to the original version approved by parliament have perpetuated the previous vulnerabilities in the legal structure, particularly in governance arrangements (e.g. the audit committee's advisory role vis-à-vis the NBKR Board) (NBKR, 2018[22]); (IMF, 2018[24]).
Another persistent vulnerability is a potential exchange rate depreciation, especially given the relatively large (for a small, low-income economy) government debt burden which is almost all in foreign currency. However, the debt has remained broadly stable since 2015 (55.4% of GDP at the end of 2018) and the debt structure is characterised by highly concessional terms (low interest rates) and very long maturities (hence, interest payments stood at 3.4% of revenue) (Moody's, 2019[6]).
6.2. Transport infrastructure in the Kyrgyz Republic
Due to its mountainous relief, there is no developed railway system in Kyrgyzstan running north to south. International connections are available to Uzbekistan and Kazakhstan. Lack of waterways (including sea access) and high costs of air transport mean that road transport constitutes the main means for the domestic transportation of passengers and freight (in particular to the remote regions of the country). As 95% of freight and 97% of passenger traffic are carried by road, road transport remains one of the most important factors in the country’s sustainable socio-economic development and one of the main tools in solving development problems (GoK, 2012[25]).
Moreover, the region is the most important transit country in Central Asia – towards the north-east (from Kazakhstan or the Russian Federation towards Tajikistan and Afghanistan) and towards the south-east (connecting Central Asia with China). In this context, the Central Asia Regional Economic Cooperation (CAREC) corridors link the region’s key economic hubs to each other and connect the region to other Eurasian markets (IRU, 2013[26]).71
According to the Ministry of Transport and Roads, the total length of public roads in the Kyrgyz Republic is about 34 000 km, including around 18 900 km which are maintained by the road units of the ministry itself (around 4 100 km of international roads, 5 600 km of national roads and 8 900 km of provincial roads). Local government agencies are responsible for developing and maintaining secondary, rural and urban road networks.
Around 67% of the international and national roads are in a sustainable condition, requiring only routine or periodic maintenance. The rest are in poor condition and require rehabilitation or reconstruction. Roads are particularly affected by climate-induced extreme events resulting in landslides and mudslides (ADB, 2012[27]).
6.2.1. Passenger transport
After a decline in passenger and cargo transportation in the first half of the 1990s (due to the economic downturn), the sector has shown an increasing trend since then (GoK, 2016[1]).
In terms of number of passengers transported, Kyrgyzstan ranks high amongst comparable EECCA countries, such as Armenia, Moldova and Tajikistan (Figure 6.8).
Figure 6.8. Passenger transportation by transport enterprises in selected EECCA countries, 2000-13
Source: (CIS, 2014[4]), Commonwealth of Independent States in 2013 – Statistical Yearbook.
As Figure 6.8 shows, passenger volumes have been increasing since 2005 – not only because of the increase in population, but also due to the growing frequency of work-related trips and lifestyle changes. The growth in the service sector, including the expansion of trade and consumption, has led to the rapid growth of the economy in urban areas and, consequently, in traffic.
The route network in Kyrgyzstan comprises 949 bus routes, including 51 international, 58 interregional, 552 intraregional; and 288 city routes (132 in Bishkek and 56 in Osh). The total length of bus routes in the Kyrgyz Republic is 82 400 km.72 Generally, however, availability and quality of transport services do not meet the needs of the population. A considerable share of rural settlements lack roads with hard surfaces and a regular bus service.
The total vehicle fleet in the country stands at about 735 000 vehicles, made up of more than 600 000 cars, 93 000 trucks, 10 000 special-purpose vehicles, and more than 32 000 buses and minibuses.73
Table 6.6 shows in detail the number of passengers carried by type of transport in Kyrgyzstan. Except for rail transport – where the number of transported passengers shows an overall decrease – all other public transport means have seen an increase in passenger-kilometres, resulting in an average increase in road public transport (bus, trolleybus, car/taxi) of 15% between 2012 and 2018.
Table 6.6. Passengers carried by type of transport in Kyrgyzstan, 2012-18
(million passenger-kilometres)
Note: * Preliminary data
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
In terms of passenger-kilometres – the measurement unit that best reflects the environmental footprint – the City of Bishkek experienced a similar increase as Kyrgyzstan as a whole over 2010-17 (49% and 51%, respectively). However, as can be seen in Figure 6.9, transport went up by 121% in the Chui oblast over the same period.
Figure 6.9. Passenger turnover in pilot cities and surrounding oblasts (all transport)
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
In 2017, in terms of passenger-kilometres, bus transport accounted for the major share (73%) nationally (Figure 6.10). As trolleybus networks are only available in the cities of Bishkek and Osh, trolleybus transport cannot at the moment compete with buses and minibuses (which also may suggest unused potential).
Figure 6.10. Share of transport means in Kyrgyzstan, 2017
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
Clearly, automobile transport is the main means of overland transport and its share is constantly increasing. By comparison, the number of passengers transported by railroad is negligible and decreasing steadily.
6.2.2. Freight transport
The domestic freight market faces increasing competition from foreign freight carriers. Due to the inadequate control of vehicles entering the territory of the Kyrgyz Republic, many foreign freight carriers do not observe freight regulations and drive with vehicles that exceed the admissible weight and dimensions. This accelerates the deterioration of highways, as well as affecting both the transportation fleet and traffic safety. For this reason, freight transport has not experienced such an increase as passenger transport (Figure 6.7).
Table 6.7. Freight by type of transport, 2012-18
(million tonne-kilometres)
Note: * Preliminary data; ** excluding departmental transport since 2014.
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
The amount of transported goods rose steadily from 27.4 million tonnes in 2006 to 41 million tonnes in 2013. After an abrupt drop in 2014 to 28.9 million tonnes, the amount is slowly increasing once again.74
According to the NSC, 133 legal entities employing about 5 000 individuals are involved in transporting goods.75
6.2.3. Greenhouse gas emissions
Kyrgyzstan’s greenhouse gases (GHG) emissions are relatively low. According to the information presented by the country in its communication on its intended national determined contribution (INDC; see Section 7.5), in 2010 the country’s contribution to total global GHG emissions from fossil fuel combustion was 0.023%, while its population was 0.079% of the world's total population. In other words, per capita GHG emissions in Kyrgyzstan are less than one-third of the world average (GoK, 2016[1]). In 2013, its global contribution to GHG emissions increased to 0.034% of world emissions, at 15.5 million tCO2e (USAID, 2017[32]).
In 2010 the country’s overall GHG emissions, excluding the land use, land-use change and forestry (LULUCF) sector, amounted to 12.8 million tCO2e, or 12.56 million tCO2e including the LULUCF sector (total net emissions) (Table 6.13). In the base year, 1990, total GHG emissions excluding LULUCF amounted to 28.39 million tCO2e or 28.43 million tCO2e including the LULUCF sector (total net emissions).
Table 6.13. Overview of national GHG emissions, 1990/2000/2010
(gigagrams of CO2e)
Source: (GoK, 2016[1]), Third National Communication of the Kyrgyz Republic under the UN Framework Convention on Climate Change, https://unfccc.int/sites/default/files/resource/NC3_Kyrgyzstan_English_24Jan2017.pdf.
After a major increase around 1998-90 and a subsequent drop in the first half of the 1990s, Kyrgyzstan’s GHG emissions reached a low point in 2001, since when the trend has been again slightly upward. In the period 1990-2012, the country’s GHG per capita emissions decreased by 68% (Figure 6.11). This is the second most significant decline among the 11 former Soviet Union countries (after Moldova). In 2012, 7 EECCA countries were below the world’s average of per capita CO2 emissions. Kyrgyzstan’s value of 2.46 tCO2e per capita is only about one-third of the global average of 7.55 tCO2e per capita (2012 values).
Figure 6.11. GHG emissions per capita in EECCA countries, 1990 and 2012
Source: World Bank (https://data.worldbank.org).
In 1990-2012, Kyrgyzstan’s GHG emissions were the third lowest in total terms (Table 6.14). Kyrgyzstan managed the second most significant reduction of total CO2 emissions over this period (after Moldova).
Table 6.14. Total GHG emissions in EECCA countries, 1990 and 2012
(kilotonnes of CO2e)
Source: World Bank (https://data.worldbank.org).
Kyrgyzstan’s low emissions – in total values as well as per capita – are largely because 90% of total electricity generation is supplied by the hydroelectric power plants. However, the impacts of climate change are expected to decrease water flow after the 2030s, consequently reducing the hydropower resources potential. As a result, with a predicted annual GDP growth of 4%, electricity demand will likely outstrip the hydropower capacities.
According to the World Resources Institute’s Climate Analysis Indicators Tool (WRI CAIT),76 Kyrgyzstan’s GHG emissions in 2013, excluding the land-use change and forestry (LUCF) sector, were mainly from the energy sector (61.1%), followed by agriculture (28.4%), industrial processes (5.7%), and waste (4.8%). Emissions from the transport sector are included in the energy sector and account with other fuel combustion for approximately 71% of emissions within the energy sector (USAID, 2017[32]).
Again according to WRI CAIT, the country’s energy emissions decreased by 5 million CO₂e between 1992 and 2013, mainly due to decreases in manufacturing and construction and other fuel combustion.77 In transportation, a significant decrease in fuel consumption occurred between 1993 and 1997 due to changes in the country’s vehicle fleet; the number of trucks and buses decreased significantly while cars increased. In 2014, around a quarter of the CO2 emissions of the Kyrgyz Republic came from transport.
Table 6.15. Kyrgyzstan’s major GHG emission trends, 2000-14
(kilotonnes of CO2e)
Source: World Bank (https://data.worldbank.org).
While total GHG emissions in Kyrgyzstan decreased by 52% over 1990-2010, the decrease in the transport sector was only 32%. Within the transport sector, almost all GHG emissions can be attributed to road transport – 93% in 1990 and 99% in 2010 (Figure 6.12).
Figure 6.12. GHG emissions from transport in Kyrgyzstan, 1990 and 2010
Note: For conversion to CO2 equivalent, global warming potential values for non-CO2 gases in the IPCC Fifth Assessment Report, 2014 (AR5) were used.78 Non-methane volatile organic compounds (NMVOCs) not included (due to conversion difficulties and insignificant values).
Source (GoK, 2016[1]), Third National Communication of the Kyrgyz Republic under the UN Framework Convention on Climate Change, https://unfccc.int/sites/default/files/resource/NC3_Kyrgyzstan_English_24Jan2017.pdf.
The CO2 emissions from transport include emissions from the combustion of fuel for all transport activity, regardless of the sector, except for international marine bunkers and international aviation.
Over 1990-2018, CO2 emissions from transport increased overall, though with a significant drop in 2014 (Figure 6.13). The transport sector was the biggest contributor to Kyrgyzstan’s CO2 emissions (as a percentage of total fuel combustion) from 2009 to 2015, when it was overtaken by the electricity and heat production sector until 2018.
Figure 6.13. CO2 emissions by sector in Kyrgyzstan, 1990-2018
Source: World Bank (https://data.worldbank.org).
The transport sector’s average contribution to CO2 emissions over 1990-2018 was 25.8%, compared to 31.9% for the electricity and heat production sector (Table 6.16). However, in 2018, transport was well above its long-term average value (34.8%), while electricity and heat production was around its average (32.7%).
Electricity and heat production experienced the most significant increase in terms of CO2 emissions as a total of fuel combustion over 1990-2018, followed by the transport sector – by 15.5 and 8.4 percentage points, respectively. These two sectors (in the same order) also contributed most to the country’s CO2 emissions (see mean values in the table). However, the most significant change took place in manufacturing industries and construction, namely a decline by 30.5 percentage points over 1990-2018.
Table 6.16. Sectoral shares in CO2 emissions in Kyrgyzstan, 1990 and 2018
(% of total fuel combustion)
Source: World Bank (https://data.worldbank.org).
CO2 emission trends for liquid and gaseous fuel consumption are shown in Figure 6.14. These followed a similar pattern up until 2006, but diverge from then onwards. As the majority of liquid fuel is consumed by transport, the increasing trajectory of the liquid fuel consumption in Figure 6.14 is a proxy for the percentage share of CO2 emissions from the transport sector.
Figure 6.14. CO2 emissions from liquid and gaseous fuel consumption in Kyrgyzstan, 1992-2014
Source: World Bank (https://data.worldbank.org).
6.2.4. Vehicle fleet
In Soviet times, the urban public transport systems in Bishkek and Osh were served by monopolist public transport companies. Following independence in 1991, a new open market was established for all branches, including passenger transport services.
Passenger transport is now provided by more than 252 legal entities, including 35 operating as taxis, and involving more than 12 000 natural persons. In addition, 69 enterprises (agencies) of the structural divisions of the Ministry of Transport and Roads are involved in the transport branch.
As the population looking for work and/or working increased in the capital, so did the minibus share in the urban transport market. In the early 1990s, the first private minibuses appeared (so-called “marshrutki”). These vehicles tended to be second-hand foreign minibuses, and most were not even originally designed as passenger carriers (Kadyraliev, 2011[29]). Nowadays, the insufficient number of high-capacity buses in large cities such as Bishkek and Osh has led to the growth of minibuses, which have taken over 95% of the bus routes. Most minibuses are old and poorly maintained, and crowded (IRU, 2013[26]).
In the cities of Bishkek and Osh, traffic volumes on the roads have increased dramatically in recent years (JICA, 2013[29]). The current capacity of the road network cannot accommodate this increasing traffic volume. According to the general plan, the city roads are designed for 40 000 – 45 000 cars, but today about 500 000 cars use them (Mokrenko, 2017[31]). In the last 10 years, only 14 new roads have been constructed.79 Furthermore, public transport vehicles are not separated from private vehicles on the roads (i.e., there are no dedicated transport lanes). Trolleybuses, buses and minibuses also use the same bus stop. Long queues at the bus stops, particularly in rush hours, remain an important problem. Both cities are therefore subjected to traffic congestion and an increased risk of accidents.
In addition, the rolling stock is generally ageing dramatically (e.g. see Table 6.9 for Bishkek), reaching the end of its operational life and contributing substantially to air pollution.
While the tariffs for passenger transport are regulated by the state, and the prices of fuel, electric power, materials and technical equipment are constantly increasing, the lack of revenue growth for carriers makes it difficult to update their rolling stock on time and improve their services (e.g. training of drivers, safety).
In the case of minibuses, fares are a source of direct income for the drivers, who therefore tend to carry as many passengers as possible. Even though traffic laws do not permit a minibus to carry standing passengers, many minibuses operate with standing passengers and take more than the nominal (legal) passenger numbers. Since other buses cannot fully cover minibus capacity, without intervention by the government, minibuses are unlikely to disappear.
A trolleybus network is much complex than a bus or minibus network. The basic technical conditions for the operation of the vehicles include a traction power supply system with substations, cable lines, overhead lines as well as various fittings and masts. Here too, the network has seen underinvestment over many years, and the current system would not have the capacity to extend the operation of the trolleybus network. Moreover, the latest generation of trolleybuses may not be able to operate on the current network because they require a stable voltage level.
The expansion of the trolleybus network would therefore need significantly higher capital for the purchase of vehicles and modernisation of the related infrastructure. This has also to be included in the investment costs.
Trolleybuses, on the other hand, use local electricity, 90% of which is locally produced by hydroelectric power plants. This reduces the price and risk compared to imported conventional fuels or gas.
6.2.5. Public transport in Bishkek
The Urban Transportation Department in the Bishkek City Mayor’s Office was established in 2008 and is responsible for organising public transport networks in the city. It grants licences to the operators of both the public and private public transport sectors (JICA, 2013[29]).80
Passenger transport in the city is carried out by:
municipal enterprise "Bishkek Trolleybus Management"
municipal enterprise "Bishkek passenger motor transportation enterprise"
private carriers (minibus routes).
In 2016, passenger transport was distributed as in Table 6.8.
Table 6.8. Passengers on non-electric public transport in Bishkek, 2016
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
According to the NSC, Bishkek’s urban public transport fleet comprises approximately 17 900 units (Table 6.9).
Table 6.9. Ownership and age of Bishkek’s urban public transport fleet, 2016
(No. of vehicles)
Note: *For trolleybuses, the totals reflect estimates after implementation of the EBRD project involving the purchase of 52 trolleybuses (see below).
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg), City of Bishkek, and authors’ estimates.
The management of city transport at the Bishkek City Hall gives slightly different figures for the ages of the urban public transport fleet (Table 6.10). Even when taking into account the data discrepancies, we can see from Table 6.9 and Table 6.10 that 70-75% of all minibuses in the capital are over 15 years old. If we assume the useful life of a minibus is normally seven years, well over 90% exceed this. The situation for the bus fleet is only slightly better than for minibuses – around 70% of vehicles are beyond their useful life (usually 12 years). However, this is according to data from NSC, as the City Hall of Bishkek reports no vehicles older than 15 years in the stock.
As can be seen in Table 6.9, trolleybuses fare somewhat better – only 5% fall into the oldest category (15+ years) and over 50% are less than 5 years old. Trolleybuses also have a longer useful life (between 15 and 20 years), so at least 95% of trolleybuses are still within their useful life limits.
Table 6.10. Age of urban public transport fleet in Bishkek
(No. and share of units)
Note: Rounded, estimated figures. The most likely reason that these figures differ from national data for the city of Bishkek may be that the national data do not deregister old vehicles.
Source: Bishkek City Hall
During the Soviet period, minibuses were also present, and three local bus companies and an inter-city bus company were operating. Natural gas was also used as a fuel, but subsequently the government switched to diesel buses.
After the year 2000, the bus fleet already consisted of ageing second-hand vehicles, but as these were not replaced the fleet has shrunk. In 2009, as the market developed rapidly with a huge number of operators and overlapping routes, the city administration launched improvements such as purchasing new vehicles from China and re-arranging existing routes giving priority to municipal vehicles in the city centre (Kadyraliev, 2011[29]).
According to the city transport management at Bishkek City Hall, the city currently has 120 buses in working order. A further 50 buses are in maintenance or technical repair. Additionally, there are 96 buses that need capital repair and 192 buses that are damaged and on the write-off inventory (i.e. no longer in service). Of the bus fleet, 10 operate on methane and the rest on diesel. Ten of these buses are 11 metres in length; the remainder are 8.4 metres long.81
The public transport situation is made more difficult by the fact that 42 new settlements have appeared around the city in the past 20 years or so. In addition, the city subsidises the public transport system to the tune of about KGS 300 million (USD 4.36 million) a year.
At present, the Bishkek bus network comprises 16 routes, with lengths varying from 26 to 56 km.82 The main share of passenger traffic in Bishkek is provided by minibuses, operated by 41 private operators. There are 122 minibus routes adding up to around 2 280 km, serving practically the entire city with a daily average of 2 700 minibuses (for the list of minibus routes in Bishkek, see Annex F). The city estimates that it still needs 600-800 additional buses of average capacity (not trolleybuses) to serve the city centre and gradually replace the minibus fleet.
In 2018, the Bishkek City Administration signed an agreement with Gazprom to purchase 320-350 CNG buses. The investment was planned to be financed from a municipal bond issue underwritten by Gazprombank (approx. USD 50 million). Over the course of the negotiations, however, the city withdrew from this agreement, citing expensive conditions (12% interest rate, due already in 2019). Instead, the city has decided to purchase buses in a phased procurement approach over 2019-2020. It will cover the purchase of 42 buses from its own funds, at a cost of KGS 382 million (USD 5.55 million) and plans to request KGS 800 million (USD 11.62 million) from the Republican budget. The city is in the first phase of tendering and is planning to purchase 120 large CNG buses
The trolleybus is the only mode of electric transport in Kyrgyzstan and is operated by municipally-owned companies. There are seven trolleybus routes with a total length of 210 km in Bishkek. Currently, 86 trolleybuses are in operation in the city, with a reserve of 10 trolleybuses that are in maintenance or technical repair.83
In November 2017, the Bishkek Trolleybus Management ordered a total of 52 trolleybuses from two suppliers;84 14 have already been delivered with the rest expected in June/July 2018. The Russian manufacturer Trolza is to supply 37 vehicles and the Belarusian company Belkommunmash is to supply 15. All vehicles are 12 m long. Trolza also previously supplied 44 trolleybuses to Bishkek in 2013 and 23 to Osh in 2017 (MRI, 2017[31]). Bishkek City Hall estimates that another 100 trolleybuses are needed. To support this effort, the city obtained a EUR 5.4 million (USD 6.1 million) loan and EUR 2.5 million (USD 2.8 million) grant under a European Bank for Reconstruction and Development (EBRD) programme.85
An electronic payment pilot was conducted in March/April 2018 on trolleybus lines No. 11 and 14 in order to attract new passengers. Using the Balance.kg application on smartphones, the fare was fixed at KSG 1 (USD 0.01). This campaign was initiated by the Beeline company, a mobile telecom services company, and the Bishkek City Hall. In practice, however, the payment mechanism had several flaws and requires further development.
The city is also holding bilateral discussions with the Asian Development Bank (ADB) concerning a USD 50 million loan for urban public transport. It is ready to take out a loan if the city council supports a tariff increase. It was agreed that ADB needs to define the loan terms.
The city is also interested in the following measures:
a pilot project (5-10 km) of “autonomous” (i.e. battery-equipped) trolleybuses
a strategy for public transport development that includes planning for a new route network and an investment plan
new route planning (and re-planning existing routes) together with optimisation of the minibus and bus network (the city expects to add five new bus routes and two new trolleybus routes)
replacement of 600 minibuses, with the remaining minibuses to serve areas without trolleybus access.
The city is making a second attempt to start a study into the expansion and optimisation of the urban public transport system (EBRD-financed).86 This would be a master plan for city development up until 2025. A tender has been announced and the city hopes the 18-month project will start in February 2019. The study will cover tariff policy issues, legal issues, and procedures to reduce the number of minibuses. The aim is to solve traffic jams, air pollution, service levels and routes by 2025.
The Bishkek City Development Agency also reports that the ADB will finance the preparation of a feasibility study for a public-private partnership (PPP) arrangement to attract investors and maintain routes. They also report that a feasibility study on E-ticketing has been prepared and they plan to conduct a tender to select a private partner to implement this measure.
6.2.6. Public transport in Osh
The public transport network in Osh comprises two trolleybus routes and three bus routes operated by the municipal transport enterprise. Additionally, private operators run 48 minibus routes.87
The network involves a hub and spoke system with all routes running through the city centre. The routes are licensed centrally by the Public Transport Agency. However, many routes still have duplicate services. The total network length of the routes is 1 726 km, of which 120 km are covered by buses, 54 km by trolleybuses and 1 542 km by minibuses.88
Table 6.11 shows passenger transport in the city of Osh.
Table 6.11. Non-electric passenger transport in Osh, 2016
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
Minibuses account for the highest market share. According to the NSC, in 2016 the city of Osh had a total of 530 buses and 2 332 minibuses, mostly Mercedes-Benz Sprinters over 15 years old.89 The city of Osh, on the other hand, reports that there are 86 and 40 operational conventional diesel buses and trolleybuses, respectively. At the same time, about 1 166 minibuses operate in the city. Recently, the city replaced 23 trolleybuses and 30 high-capacity buses (diesel-powered) under an EBRD-financed programme. The project involved a sovereign loan of EUR 5.7 million to be on-lent to the City of Osh and proposed co-financing of EUR 3.1 million grant provided by international donors.90
Table 6.12. Ownership and age of urban public transport fleet, Osh, 2016
(No. of vehicles)
Note: * For trolleybuses, the totals reflect estimates after implementation of the EBRD project involving purchase of 23 trolleybuses (see below).
Source: National Statistical Committee of the Kyrgyz Republic (http://stat.kg), City of Osh, and authors’ estimates.
The EBRD-financed programmes mean that the situation with the trolleybuses fleet is similar to Bishkek – the majority (around 60%) of the fleet is younger than five years old, while the fully depreciated vehicles (aged 15 years and more) make up only a very small segment (5%). The age of the bus and minibus fleet is a little higher than in Bishkek – about 75% of buses have reached their useful life limits (12 years) and at least 97% of minibuses are over 7 years old (the usual useful life for minibuses, depending on mileage and service). Only 17% of minibuses are less than 15 years old.
The city has limited facilities for maintenance and repairs, which aggravates an already ageing fleet. The city states that it plans to replace a further 17 trolleybuses and purchase 250 new buses.91
6.3. Greenhouse gas emissions and air pollution in the Kyrgyz Republic
6.3.1. Air pollution
The Agency of Hydrometeorology at the Ministry of Emergency Situations of the Kyrgyz Republic (Kyrgyzhydromet) is responsible for monitoring air quality. This monitoring is carried out at 14 stationary points in five cities, covering about 64% of the country’s urban population.
The following pollutants should ideally be measured – sulphur dioxide (SO2), oxides of nitrogen NOx), formaldehyde (CH2O), and ammonia (NH3) – however, air pollution data in the Kyrgyz Republic cities are not readily available or reported. Indeed, Kyrgyzhydromet’s stationary posts have outdated laboratories and lack emissions analysers that can specify pollution data in detail. The agency uses its own method to calculate pollution and report on air quality (Mokrenko, 2017[31]). Reports on air pollution, including poor air quality events, are posted on the Kyrgyzhydromet website after the event; real-time data are not available.
The main sources of atmospheric air pollution are power plants, mining and processing industries, construction materials industries, as well as the municipal and private sector. Large cities in Kyrgyzstan suffer especially from air pollution caused by human activities, including vehicle emissions, as well as heating homes and facilities using coal. In Bishkek, the coal-fired thermal power plant is a huge emitter.
As can be seen in Figure 6.15 (Panel A), since 2015 there have been more stationary sources of air pollution in the city of Bishkek than in the surrounding Chui oblast (36 vs. 34). The volume of emissions in Bishkek was also almost three times higher than for Chui oblast (31 700 tonnes vs. 11 900 tonnes in 2015), yet its geographical area is over 100 times smaller (170 km2 vs. 19 900 km2).
Figure 6.15. Emission of air pollutants from stationary sources in Bishkek, Osh and surrounding regions, 2011-15
Source: (NSC, 2016[2]), Environment in the Kyrgyz Republic, Statistical Compilation 2011-2015, National Statistical Committee of the Kyrgyz Republic, Bishkek, http://stat.kg/media/publicationarchive/8c0e9d22-6bb6-4145-b1d6-8311da33521d.pdf.
In addition, Bishkek’s location, situated between mountains, contributes to inversions that trap pollutants in the ambient air. Additionally, trees are being cut down in squares and parks, and also along roads to expand them.
According to the Kyrgyzhydromet report, in May 2018 the city of Bishkek registered high concentrations of nitrogen dioxide (NO2), nitric oxide (NO) and formaldehyde (CH2O), exceeding the maximum allowable concentrations. A local NGO – MoveGreen – monitors air quality (PM2.5); in the winter concentrations often exceed 100 microgrammes per cubic metre, which exceeds the maximum permissible 24-hour average concentration defined by the World Health Organization (WHO) by at least four times.
Table 6.17 lists other air pollutants (probably from 2015 or shortly before), showing that the city of Bishkek significantly outweighs the city of Osh and both the surrounding regions.
Table 6.17. Emissions of air pollutants in Bishkek, Osh and surrounding regions
(kg per capita)
Source: (GoK, 2016[1]), Third National Communication of the Kyrgyz Republic under the UN Framework Convention on Climate Change, https://unfccc.int/sites/default/files/resource/NC3_Kyrgyzstan_English_24Jan2017.pdf.
Due to power outages in previous years (see Section 6.1.4) and natural gas price increases, most people living in private houses have switched to coal. As they burn coal at low temperatures, a significant part of the fuel turns into harmful toxic gases, mainly carbon monoxide – one of the components of smog. Moreover, local residents often use car tyres and other waste as fuel to heat their homes, which, when burned, form dark smoke and emit particulates.
The impact of motor transport on the environment in Kyrgyzstan is defined by the intensity of transportation and the technical condition of the vehicle fleet. As motor vehicles age, and in the absence of an efficient system of technical inspection and maintenance, the vehicles emit harmful substances that exceed defined norms. According to the State Agency for Environmental Protection and Forestry (SAEPF), the annual total pollutant emissions into the atmosphere in Bishkek amount to 240 000 tonnes, of which 180 000 tonnes are from motor vehicles (Levina, 2018[33]).
The replacement of outdated buses with modern diesel-powered buses or the expansion of trolleybuses networks in the place of diesel-powered vehicles would help reduce pollution by particulate matter, as well as NOx and SO2. The introduction of an effective technical inspection system for cars would also reduce harmful substances in the atmosphere.
6.3.2. Influence of air pollution from diesel engines on human health
Diesel engines emit carbon dioxide (CO2), carbon monoxide (CO), nitrogen oxides (NOx), sulphur dioxide (SO2) and particulate matter (PM). The air pollution from diesel engines, especially older ones, poses major environmental and health risks to the population (Box 6.1). Increased air pollutants carry a risk of mortality, in particular among people over 65 (Pope et al., 1995[34]). Above all, diesel exhaust is a Group 1 carcinogen,92 causing lung cancer and being linked to bladder cancer.
Particulates from road transport are mainly of three types:
primary particles emitted from the exhaust pipe liner of vehicles: the primary ultrafine particles emitted by diesel vehicles are mainly formed of soot carbon
ultrafine secondary particles that are formed in the outside air: these particles are formed from the exhaust pipe liner of the vehicles and therefore cannot be filtered out by the vehicle
primary particles coming from tyre, clutch, brake or road wear.
Box 6.1. The impact of diesel exhaust emissions
Carbon dioxide (CO2): non-toxic, but as a greenhouse gas it causes climate change.
Carbon monoxide (CO): a temporary atmospheric pollutant in some urban areas, chiefly from the exhausts of internal combustion engines. Carbon monoxide is absorbed through breathing and enters the bloodstream through gas exchange in the lungs. It is toxic when encountered in concentrations above about 35 ppm.
Nitrogen oxides (NOx): NOx refer to a mixture of nitric oxide (NO) and nitrogen dioxide (NO2). They are produced during combustion, especially at high temperatures. Due to reactions and photolysis by sunlight, they are the main source of tropospheric ozone. NOx may react with water to make nitric acid, which may end up in the soil where it makes nitrate, which is of use to growing plants. NOx in combination with other pollutants creates urban smog. High concentrations of nitrogen dioxide are harmful to humans because they cause inflammation of the airways.
Sulphur dioxide (SO2): SO2 pollution levels from diesel mainly depend on the quality of the fuel. If the fuel contains more sulphur, the diesel exhaust will contain more SO2. Sulphur dioxide emissions are a precursor to acid rain and atmospheric particulates. Inhaling sulphur dioxide is associated with increased respiratory symptoms and diseases, and difficulty in breathing.
Particulate matter (PM): the major pollutants with negative health effects are PM (2.5 and 10). The particles are so small they can penetrate into the deep regions of the lungs. It is estimated that approximately 3% of cardiopulmonary and 5% of lung cancer deaths are attributable to PM globally. Exposure to PM2.5 reduces life expectancy by about 8.6 months on average.
Since 2000, PM pollution has been estimated to cause 22 000 to 52 000 deaths every year in the United States. It also contributed to about 370 000 premature deaths in Europe in 2005, and 3.22 million deaths globally in 2010, according to a study of the global burden of disease (Lim et al., 2012[35]).
There is no evidence of a safe level of exposure to PM, or a threshold below which no adverse health effects occur. The World Health Organization Air Quality Guidelines values for PM in 2005 were as follows (WHO, 2013[36]):
for PM2.5: 10 micrograms per cubic metre (μg/m3) for the annual average and 25 μg/m3 for the 24-hour mean (not to be exceeded on more than 3 days/year)
for PM10: 20 μg/m3 for the annual average and 50 μg/m3 for the 24-hour mean.
Figure 6.16 and Figure 6.17 compare the increased emissions of health-damaging substances by old diesel-powered engines (especially those aged at least 15 years) with modern diesel engines and alternative fuels, compressed natural gas (CNG) and liquefied petroleum gas (LPG).
Figure 6.16. Assumed amount of health-damaging substances emitted per distance travelled (normative)*
Note: *For a discussion of normative and real pollution factors, see Section 2.3.2 and Annex B.
Source: (DieselNet, 2016[37]), “EU: Heavy-Duty Truck and Bus Engines: Regulatory Framework and Emission Standards”, www.dieselnet.com/standards/eu/hd.php (accessed 30 March 2017).
Figure 6.17. Assumed amount of health-damaging substances emitted per distance travelled (real)*
Note: *For a discussion of normative and real pollution factors, see Section 2.3.2 and Annex B.
Source: (DieselNet, 2016[37]), “EU: Heavy-Duty Truck and Bus Engines: Regulatory Framework and Emission Standards”, www.dieselnet.com/standards/eu/hd.php (accessed 30 March 2017).
The city of Bishkek experienced an increase in the incidence of respiratory cases, from 136 000 in 2011 to 163 000 in 2015 (Figure 6.18). The increase in Osh was not so rapid, from 67 000 to 78 000 cases, respectively. These figures are not attributable to urban transport alone, although its contribution is expected to be substantial. The WHO statistics also show that diseases of the circulatory system – which air pollutants (especially particulates) are increasingly understood to contribute to – constitute the main causes of death in Kyrgyzstan (50% in 2018) (WHO, 2018[38]).
Figure 6.18. Incidence of respiratory diseases Bishkek, Osh and surrounding regions, 2011-15
Source: (NSC, 2016[2]), Environment in the Kyrgyz Republic, Statistical Compilation 2011-2015, http://stat.kg/media/publicationarchive/8c0e9d22-6bb6-4145-b1d6-8311da33521d.pdf.
The replacement of outdated buses with modern diesel-powered or natural gas-powered buses – or the expansion of trolleybuses networks in place of diesel-powered vehicles – would help reduce the amount of major air pollutants, such as particulates, NOx and SO2.
Extending the market share of trolleybuses would improve the situation further as trolleybuses use more than 90% green energy (JICA, 2013[29]). A clean public transport programme can thus be justified from a public health standpoint, considering the huge health cost sums directly carried by the health care system.
6.4. Conclusions for the CPT Programme
Kyrgyzstan’s GHG emissions are relatively low. Planned and expected economic development, however, will see these emissions increase unless action is taken to reduce them. This, along with the review of air pollution in Kyrgyz cities, confirms that the CPT Programme can be justified from a public safety and public health standpoint, as well as an environmental standpoint. With road transport contributing the bulk of air pollution, replacing outdated vehicles with modern diesel-powered or natural gas-powered buses and buses with higher capacity would help reduce pollution by particulate matter, as well as NOx, SO2 and GHG emissions, in line with the country’s emission-reduction objectives.
However, improving the energy intensity of vehicles (megajoule/passenger-km or megajoule/tonne-km) and carbon intenstity of fuels (CO2e/megajoule) is not enough on its own. In addition to investments to replace vehicle fleets, reducing pollution from urban public transport will require a combination of measures:
avoiding or reducing the need for travel (either through better urban planning or changing personal behaviour)
shifting travel from private cars to non-motorised modes (walking, cycling93) or public transport
improving existing forms of transport through technical improvements (especially in energy intensity of vehicles and carbon intensity of fuels and energy carriers).
In this context, road widening would only increase traffic in cities. The combination of mass public transport with non-motorised modes of transport offers the greatest mitigation potential. The first step in this direction would be to increase the capacity and number of public transport vehicles (bus and trolleybuses). The diversification of the fleet structure, increasing energy efficiency and a modal shift from car to public transport would also improve resiliency against future energy price rises (diesel, gas, electricity). Regulations on the operation of ageing vehicles, sufficient maintenance, and technical inspection of vehicles are necessary prerequisites.
However, there also needs to be an increased demand for these services, as the economic and environmental viability of public transport will only be achieved through increased demand. Improving the quality of the public transport to meet passenger expectations, including redesigning the urban transport network, would make it more attractive. It would also help to reduce the social costs of transport – such as time lost due to congestion, air pollution, accidents etc. – which can generally account for several percent of GDP (though this has not been assessed in Kyrgyzstan).
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Laws and regulations
(listed by most recent publishing date, in Russian)
Law No. 206 of 16 December 2016 "On the National Bank of the Kyrgyz Republic, Banks and Banking Activity", http://cbd.minjust.gov.kg/act/view/ru-ru/111486.
Government Resolution No. 601 of 25 August 2015 "On approval of the Programme of the Government of the Kyrgyz Republic on energy saving and policy planning on energy efficiency in the Kyrgyz Republic for 2015-2017", http://cbd.minjust.gov.kg/act/view/ru-ru/97869.
Government Resolution No. 85 of 27 February 2015 "About the Social Security Programme of the Kyrgyz Republic for 2015-2017", http://cbd.minjust.gov.kg/act/view/ru-ru/97347.
Government Resolution No. 660 of 20 November 2014 "On approval of the medium-term tariff policy of the Kyrgyz Republic on electric and thermal energy for 2014-2017", http://cbd.minjust.gov.kg/act/view/ru-ru/97149.
Government Resolution No. 295 of 15 May 2012 "On draft laws of the Kyrgyz Republic "On introducing amendments and additions to the Law of the Kyrgyz Republic "On energy"", "On introducing amendments and addenda to the Law of the Kyrgyz Republic "On electric power industry"", and "On introducing changes to the Law of the Kyrgyz Republic "On energy saving"", http://cbd.minjust.gov.kg/act/view/ru-ru/93583?cl=ru-ru.
Government Resolution No. 677 of 4 October 2012 "On approval of the Strategy for Development of Road Transport in the Kyrgyz Republic for 2012-2015", http://cbd.minjust.gov.kg/act/view/ru-ru/93738?cl=ru-ru.
Government Resolution No. 330 of 28 May 2012 "About the Mid-Term Power Sector Development Strategy of the Kyrgyz Republic for 2012-2017", http://cbd.minjust.gov.kg/act/view/ru-ru/93854?cl=ru-ru.
Government Resolution No. 47 of 13 February 2008 "On the project of the National Energy Programme of the Kyrgyz Republic for 2008-2010 and the strategy for the development of the fuel and energy complex up to 2025", http://cbd.minjust.gov.kg/act/view/ru-ru/58883?ckwds=%25d1%2581%25d1%2582%%2025d1%2580%25d0%25b0%25d1%2582%25d0%25b5%25d0%25b3%25d0%25b8%25d1%%20258f%2B%25d1%2580%25d0%25b0%25d0%25b7%25d0%25b2%25d0%25b8%25d1%2582%25d0%25b8%25d1%258f%2B%25d1%2582%25d0%25be%25d0%25bf%25d0%25bb%25d0%25b8%25d0%25b2%25d0%25bd%25d0%25be.
Government Resolution No. 239 of 23 April 1997 "About privatisation and privatisation programme of the Kyrgyz state joint-stock holding company "Kyrgyzgosenergoholding"", http://cbd.minjust.gov.kg/act/view/ru-ru/34362?cl=ru-ru.
Law No. 8 of 28 January 1997 "On power industry", Erkin Too newspaper No. 8 of 12 February 1997, http://cbd.minjust.gov.kg/act/view/ru-ru/508/30?cl=ru- (unofficial translation available at: https://cis-legislation.com/document.fwx?rgn=411).
Notes
← 1. See NSC on land used by farms in the Kyrgyz Republic at: http://stat.kg/en/opendata/category/181.
← 2. According to the 2009 census, a large majority of Kyrgyz, Dungans and Kalmucks (each 93-95%) aged 15 years and over indicated Russian as their second language, only 10% of the population aged 15 years and over indicated Kyrgyz as a fluently spoken second language (NSC, 2009[39]).
← 3. The seven oblasts are Batken, Jalal-Abad, Issyk-Kul, Naryn, Osh, Talas and Chui.
← 4. Numbers for both cities as of end of 2018. See NSC on resident population at: http://stat.kg/en/opendata/category/39.
← 5. See NSC on total population by sex, by main age groups urban and rural areas, at: www.stat.kg/en/statistics/download/dynamic/315.
← 6. See NSC on total population by nationality at: http://stat.kg/en/opendata/category/312.
← 7. See UNDP country information on Kyrgyzstan at: www.kg.undp.org/content/kyrgyzstan/en/home/countryinfo.html.
← 8. See NSC on GDP in national currency at: www.stat.kg/en/opendata/category/26; and in foreign currency at: www.stat.kg/en/opendata/category/2315.
← 9. Investment Promotion and Protection Agency (www.invest.gov.kg).
← 10. See the ADB for an overview of Kyrgyzstan’s economy: www.adb.org/countries/kyrgyz-republic/economy.
← 11. Kumtor, the main Kyrgyzstan’s gold mine, approaches end of mine life due to advanced resource depletion.
← 12. See the NSC database on the structure of GDP by types of economic activity in Kyrgyzstan: http://stat.kg/en/opendata/category/2314.
← 13. See UNDP 2018 statistical update on Kyrgyzstan at: http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/KGZ.pdf.
← 14. According to the World Bank, middle-income economies start with a GNI per capita of USD 1 045 and go up to USD 12 746. Lower-middle-income and upper-middle-income are separated with a threshold of USD 4 125 per capita. On the WB classification update for Kyrgyzstan, see: http://www.worldbank.org/en/news/press-release/2014/07/24/kyrgyz-republic-becomes-lower-middle-income-country.
← 15. See the WB database on GNI per capita for Kyrgyzstan at: https://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD?locations=KG. Kyrgyzstan’s GNI per capita (previously, GNP per capita) has nearly tripled from its 1995 value of 1 210 (current international dollars). Nonetheless, Kyrgyzstan has – along with Tajikistan – the lowest values for the former Soviet states.
← 16. WB Poverty and Equity Portal (http://povertydata.worldbank.org).
← 17. See natural gas production, imports and consumption in Kyrgyzstan at: https://www.indexmundi.com/g/g.aspx?v=136&v=137&v=139&c=kg&l=en.
← 18. See proved natural gas reserves of Kyrgyzstan at: https://www.indexmundi.com/g/g.aspx?v=98&c=kg&l=en.
← 19. See crude oil production, imports, consumption and reserves at: https://www.indexmundi.com/g/g.aspx?v=88&v=91&v=93&v=97&c=kg&l=en
← 20. Personal communication with the State Agency for Regulation of the Fuel and Energy Complex.
← 21. See Gazprom’s foreign projects – Kyrgyzstan: www.gazprom.com/about/production/projects/deposits/kyrgyzstan.
← 22. The actual document can be found in the resolution.
← 23. See production of electric power on power stations at: www.stat.kg/en/statistics/download/dynamic/344.
← 24. The reliability of power supply is influenced by frequent outages and occasional breakdowns (these are usually longer than necessary due to limited availability of spare parts for outdated – Soviet-times – technology). Also the quality of the Kyrgyzstan’s power system is hit by regular voltage and frequency fluctuations.
← 25. See WB’s Sustainable Energy for All (SE4ALL) database at: https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=KG.
← 26. Including pumped storage. Neighbouring Tajikistan, which also produces over 90% of its electricity from hydro resources, but because of larger population, its installed capacity is higher (5 190 MW). On the other hand, much more populated Kazakhstan and Uzbekistan have lower installed capacities (2 554 MW and 1 731 MW, respectively). See (IHA, 2018[11]).
← 27. Water releases are subject to inter-governmental agreement under which Kyrgyzstan supplies Uzbekistan with water in summer for irrigation in return for gas and electricity in winter.
← 28. Personal communication with the State Agency for Regulation of the Fuel and Energy Complex.
← 29. Besides using local coal, about 50% is imported from Kazakhstan (altogether, ca. one million tonnes/year). Apart from coal as the major fuel, the two CHP plants use natural gas and mazut as additional fuels. According to information from the National Energy Holding Company, the modernisation of the two CHPs (e.g. new filters) reduced the emissions CO2 and polluting substances (these, even by 95%).
← 30. This includes Bishkek CHP (666 MW) from 1961 and Osh CHP (50 MW).
← 31. Figures are most probably based on 2012/2013 data.
← 32. See NSC for structure of GDP by types of economic activity at: www.stat.kg/en/statistics/download/dynamic/935.
← 33. And personal communication with the State Agency for Regulation of the Fuel and Energy Complex.
← 34. See NSC for electro-balance of industries economies at: www.stat.kg/en/statistics/download/dynamic/343.
← 35. The generation company is OJSC Electric Power Plants (6 HPPs and 2 CHPs). Power transmission is done by OJSC National Electric Grid of Kyrgyzstan (comprising six local enterprises) and regional distribution by OJSCs Severelektro, Vostokelektro, Oshelektro and Jalalabatelektro. The National Electric Grid of Kyrgyzstan is allowed to set electricity prices for industrial consumers but not for the general population (UNCTAD, 2013[13]).
← 36. As a part of Government Order No. 299-p of 24 July 2013. See http://cbd.minjust.gov.kg/act/view/ru-ru/209920.
← 37. Economic regulation (tariffs, licensing, and dispute resolution) was under the State Department for Regulation of Fuel and Energy Complex, while technical regulation was under the State Inspectorate for Energy and Gas.
← 38. See www.regulatortek.kg. For general information about the state agency in English, see https://erranet.org/member/kyrgyz-republic.
← 40. This, of course, must be offset by lower support for other sectors, such as public infrastructure (e.g. roads) and services (e.g. education). In addition, energy subsidies contribute to the country’s indebtedness and jeopardise its macro-economic stability.
← 41. It is estimated that 45% of available generation capacity is beyond its useful service life, and the similar state of transmission and distribution assets exacerbates the risk of network failures (Gassner et al., 2017[16]).
← 42. For the main trends in the Kyrgyz banking sector in 2018, see www.nbkr.kg/index1.jsp?item=80&lang=ENG. For a list of commercial banks and number of branches, see www.nbkr.kg/index1.jsp?item=69&lang=ENG.
← 43. By the Resolution of the Supreme Council of the Kyrgyz Republic No. 873-X11 of 6 March 1992 "On the transformation of the State Bank of the Kyrgyz Republic into the National Bank of the Kyrgyz Republic".
← 45. For IMF’s Articles of Agreement, see: https://www.imf.org/external/pubs/ft/aa/index.htm.
← 46. See IMF press release at: www.imf.org/en/News/Articles/2015/09/14/01/49/pr9516.
← 47. After an unprecedentedly rapid application process.
← 48. Based on WB inflation data for Kyrgyzstan (http://api.worldbank.org/v2/en/indicator/FP.CPI.TOTL.ZG?downloadformat=excel); and estimated on KGS/USD currency exchange data (https://data.worldbank.org/indicator/PA.NUS.FCRF?locations=KG).
← 50. See NBKR’s strategic directions for the period at: www.nbkr.kg/index1.jsp?item=3326&lang=ENG.
← 51. See NSC for assets and liabilities of commercial banks at: www.stat.kg/en/statistics/download/dynamic/470.
← 52. For non-banking financial institutions, see NBKR at: www.nbkr.kg/DOC/14052019/000000000052254.xls.
← 53. For GDP statistics, see www.stat.kg/en/statistics/download/dynamic/741.
← 54. See NBKR for balance of payments of the Kyrgyz Republic at: www.nbkr.kg/DOC/10042019/000000000052023.xls.
← 55. See NBKR for newly issued credits by commercial banks within the period at: www.nbkr.kg/DOC/30042019/000000000052194.xls.
← 56. See NBKR for newly issued credits by commercial banks within the period at: www.nbkr.kg/DOC/30042019/000000000052194.xls.
← 57. See NBKR for credits of commercial banks by the end of the period at: www.nbkr.kg/DOC/25042019/000000000052132.xls.
← 58. See NBKR for official exchange rates at: www.nbkr.kg/EXCEL/dailyeng.xls.
← 59. Which volume in 2016 amounted to KGS 982.2 million whereas in 2015 to KGS 689.6 million (NBKR, 2018[18]).
← 60. See NBKR for deposits in commercial banks by the end of the period at: www.nbkr.kg/DOC/25042019/000000000052135.xls.
← 61. See banking legislation at: www.nbkr.kg/index1.jsp?item=1200&lang=ENG.
← 62. As of end of June 2018.
← 63. Whereas agriculture is credited mainly in local currency (28.9% vs 2.2%) and trade in foreign currency (38.9% vs. 20.6%) of all loans.
← 64. Not including consumer loans.
← 65. See NBKR for credits of commercial banks by the end of the period at: www.nbkr.kg/DOC/25042019/000000000052132.xls.
← 66. The decrease in lending activities of non-bank financial institutions was also connected with their transformation into commercial banks before 2017 (NBKR, 2018[18]).
← 67. See credits of commercial banks by regions of the Kyrgyz Republic, at the end of period, at: www.nbkr.kg/DOC/29042019/000000000052183.xls.
← 68. See NBKR for credits of commercial banks at the end of the period at: www.nbkr.kg/DOC/25042019/000000000052132.xls; and deposits in commercial banks at the end of the period at: www.nbkr.kg/DOC/25042019/000000000052135.xls.
← 69. See NBKR for the main trends in the Kyrgyz banking sector in 2018 at: www.nbkr.kg/index1.jsp?item=80&lang=ENG.
← 70. For the English version, see www.nbkr.kg/index1.jsp?item=42&lang=ENG.
← 71. For further information, see the CAREC Program (www.carecprogram.org).
← 72. Personal communication with the Ministry of Transport and Roads.
← 73. Personal communication with the Ministry of Transport and Roads.
← 74. See NSC database on freight by all types of transport in tonnes at: http://stat.kg/en/opendata/category/1975.
← 75. . Personal communication with the National Statistical Committee.
← 76. See CAIT 2.0 WRI’s Climate Data Explorer at: www.climatewatchdata.org/countries/KGZ.
← 77. See CAIT 2.0 WRI’s Climate Data Explorer at: www.climatewatchdata.org/countries/KGZ.
← 78. For IPCC AR5 reports, see: www.ipcc.ch/assessment-report/ar5.
← 79. Personal communication.
← 80. Information about municipal and private carriers’ routes is available online at http://bus.kg/ including calculations of the best routes depending on destination.
← 81. Personal communication with Bishkek City Hall.
← 82. Personal communication with Bishkek City Hall.
← 83. Personal communication with Bishkek City Hall.
← 84. Metro Report International (www.metro-report.com).
← 85. For EBRD Bishkek Public Transport Project, see www.ebrd.com/work-with-us/projects/psd/bishkek-public-transport-project.html.
← 86. In 2013, the Japan International Cooperation Agency (JICA) conducted a study on improvement of public transportation in Bishkek. See (JICA, 2013[29]).
← 87. Personal communication with Osh City Hall.
← 88. Personal communication with Osh City Hall.
← 89. . National Statistical Committee of the Kyrgyz Republic (http://stat.kg).
← 90. For EBRD Osh Public Transport Project, see: www.ebrd.com/work-with-us/projects/psd/osh-public-transport-project.html.
← 91. Personal communication with Osh City Hall.
← 92. The Group 1 category is used when there is sufficient evidence of carcinogenicity in humans.
← 93. According to information from NGO Bicycle Kyrgyzstan, there are two bicycle lanes in Bishkek and about 10 000 bicycles in the city. However, only 10% of bicycle owners use them as a mode of transport due to poor infrastructure for non-motorised travel, poor traffic safety and air pollution problems. There is an irreplaceable role for NGOs such as Bicycle Kyrgyzstan and MoveGreen in conducting research and awareness campaigns to alter citizens’ preferences and behaviour. Solely financial aspects – such as lower costs for public or non-motorised transport – cannot bring sustainable solutions.