World Bank to help Kyrgyz Republic improve efficiency and quality of its heat supply

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WASHINGTON, October 27, 2017 – More than 200,000 people in the Kyrgyz Republic will benefit from the improved efficiency and quality of heating during cold winter months, thanks to the Heat Supply Improvement Project, approved today by the World Bank’s Board of Executive Directors. The project will be financed by the combination of a US $23 million credit and a US $23 million grant.

Due to the cold climate and long heating season, access to a reliable and adequate heat supply is essential in the Kyrgyz Republic. Only about 17% of the 1.1 million Kyrgyz households, mainly located in the capital city Bishkek and other large cities, have access to district heating. The remaining 907,000 households have to use coal stoves (a primary heating source for around 60% of all households), electricity, wood, dung or gas to keep their homes warm in winter.

Adequately meeting heating demand in the Kyrgyz Republic remains a daunting challenge due to a number of issues, such as the low reliability of the old and dilapidated district heating system in Bishkek and low energy efficiency of schools and hospitals throughout the country. Additionally, a large majority of Kyrgyz households use traditional solid fuel-fired stoves that are highly inefficient, polluting, and result in low comfort levels in homes. Due to the low efficiency of the stoves, households spend on average 45% more money for fuel than necessary. The indoor air pollution especially impacts women, the elderly and children, who spend more time at home.

To help address these challenges, the project will finance the modernization of individual heat substations in nearly 2,000 apartment buildings in Bishkek, including the installation of 4,000 building-level heat and hot water meters with remote reading functions, or so called “smart meters”.

Additionally, the project will support the replacement and reconstruction of the ‘Vostok’ pipeline that transmits heat to 450 apartment buildings and 29 community facilities located in the southern part of the city. Bishkekteploset JSC, a state-owned utility company that operates the district heating system in Bishkek, will implement this component of the project.

Besides rehabilitating the district heating system in Bishkek, the project will also help about 14,000 low income households in remote rural areas to switch to efficient and clean heating stoves. It will also improve energy efficiency in about 21 public buildings such as schools, kindergartens, and hospitals. These components will be implemented by the Community Development and Investment Agency.

“Access to reliable and adequate heating is critical for the wellbeing of Kyrgyz people,” says Bolormaa Amgaabazar, World Bank Country Manager for the Kyrgyz Republic. “The situation in the heating sector requires urgent measures, and we are glad to support the Kyrgyz government in its efforts to address the challenges that this vital sector is facing.”

The World Bank’s overall mission in the Kyrgyz Republic is to reduce poverty and promote economic growth and shared prosperity. 50% of the World Bank’s assistance to the Kyrgyz Republic is in the form of grants. The other 50% is credits with no interest and a 0.75% service charge. Credits are repayable in 38 years, including a 6-year grace period, while grants require no repayment. The Bank’s financial assistance to the Kyrgyz Republic since 1992 amounts to over US $1.3 billion in the form of grants and highly concessional credits.

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