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News: April 2007

KYRGYZSANS OPPORTUNITIES AS A WATER POWER: A BISHKEK WATER ACADEMY FOR CENTRAL ASIA?

Water is essential for health and human dignity. The Koran states, "By means of water we give life to everything", and Christians are baptized with water.

Kyrgyzstan is a "water power". It is estimated that more than 40 percent of Central Asia's spring water originates in Kyrgyzstan. Kyrgyzstan has gold and other minerals, but water is the country's greatest asset. Water will become even more precious in the future, because water resources in Central Asia - and in neighboring Xinjang Uigur Autonomous Region are fragile. I foresee a time when there will be pipelines going from the Tien-Shan and the Pamir (mountain ranges) to those places where water resources are scarce.

Only 10 percent of the electricity potential is exploited. Hydroelectric power generation is 10 times less costly than electricity production using fuel-based methods. In addition, when you produce electricity using water, you can drink the water after, or use it for irrigation, or high-quality tourism. We should also not forget that nothing grows without irrigation and water is essential for agriculture and our survival.

The Kyrgyz people have a deep, mystical relationship with water. Nevertheless some Kyrgyz seem not to fully understand that - if the conditions are right - time works for them, because of their water! Kyrgyzstan seems to lack a clear strategic assessment of what sort of asset it has and the country needs to place water at the center. This does not mean that such a strategy should be interventionist. It should live up to market principles, good governance and "institutional economics". In my opinion, Kyrgyzstan should develop an open foreign investment policy able to attract and keep foreign capital for a constructive vision of future development in this area.

While on leave from the diplomatic service, as the former Director General of International Business Development of Deutsche Telekom, I experienced the liberalization and privatization of telecommunications and have invested substantial amounts of money in networks. I know what licenses are and I know what financing means. I think the Kyrgyz should understand that the question is not "Privatization - yes or no?", the question is "How can we use foreign capital for national purposes?". This is a matter of decent regulation - regulation under the rule of law in the interest of the country - and it is also a matter of understanding that for foreign investors to be attracted and secured for the long term there must be a reasonable amount of profit to reward their investment.

Now comes the next question: What is the best way in which to exploit the water potential of Kyrgyzstan? Are additional "Toktoguls" (Toktogul hydroelectric power plant) the answer? Will this solution have negative effects on biodiversity? Or should Kyrgyzstan opt for environmentally-friendly networks of small, interlinked hydroelectric power generation stations as a basis for exploiting the 90 percent of untapped electric-generation potential? I believe that the latter is the right way to go, and believe this for a number of reasons.

First, this country has a vocation for tourism - high-quality tourism. If, in Kyrgyzstan's beautiful mountain valleys, small state of the art hydroelectric power stations are constructed, this may be the infrastructure needed for some nice hotels. It can be combined with high-quality agriculture in the valleys. Everything can look very beautiful. If roads are built leading to the dam, these may also serve as roads leading to holiday resorts. Energy for hotels and sanatoria can be produced on the spot. Some pilot projects should be developed. If they are successful there should be expansion.

The strategic idea would be to reach an optimum mix of energy export, high-quality tourism, agriculture, irrigation and human consumption. Therefore, in the future, tenders for water-related projects should not be limited to single projects, but propose multi-systems development comprising "water-energy-agriculture-tourism and recreation. The question then is: How will this be financed? This question is very well known to me because when I was building networks in Eastern European countries, such as the Ukraine and the Baltics, there was always the question of financing.

To achieve sound financing of big projects, I recommend a syndication of commercial banks, public-private partnership funds and development banks and possibly with the participation of operators and suppliers. Would banks and other partners be ready to take risk? I believe, yes.

Simply put it is a matter of converting the water and electricity of tomorrow into the money of today. I have done this in the telecommunications business, converting the phone calls of tomorrow into the money of today that was used for financing networks, equipment and services.

Thus, on all levels - construction, operation and financing there must be interesting mixtures, conglomerates and syndicates. Agriculture must be combined with dams, turbines, transmission technology, transport, hotels/medical recreation centers and environmental design and operation. In particular, financiers are needed that understand that the money being paid back will not just come from one product, but possibly at graduated times from a combination of products and services. Kyrgyzstan could become a pilot in conceptualizing "multi-product and multi-finance syndicated water-schemes."

I know this is very demanding, but I am convinced that it is precisely where we should go.

However, some may come and say, "We do not care about biodiversity, we do not care about the beauty of the landscape and integrated approaches are too complex. We should just build the dams much cheaper than other companies can. Here you have it and it works. Such approaches may be regarded by some as commercially tempting pragmatic models for the country, but I am not sure that this is the right strategic approach in the mid and long term for Kyrgyzstan. But what is the right strategy?

The leaders of Kyrgyzstan should take up some of the ideas that are being developed at present in various quarters in Bishkek, notably the idea of a "Water Summit", a "National Energy & Water Strategy", a "Multilateral Water Management Agency" and particularly the launching of a multidisciplinary "Water Academy" for Central Asia.

The "Bishkek Water Academy for Central Asia" should become a Center of Excellence and assemble top-experts in the field of hydroelectric power and transmission (grids) technology, biodiversity, agriculture and irrigation, innovative financing of water-related projects (including modeling in the field of desertification), experts in hygienic, safe water supply and sanitation as well as the best international water lawyers addressing issues such as trans-boundary river basin management. There should also be ecologists, venturing into assessments of what extent global warming will melt glaciers, or whether as a result of global warming there will be more rain.

Kyrgyzstan should consult on such ideas with its regional neighbors, particularly with Tajikistan as it has related interests, and also with Kazakhstan and Uzbekistan. I hope that all of this will be considered by the EU-Central Asia Joint Working Group on Water.

Tien-Shan water is a gift of God. People must use it for peaceful development. This is one of Kyrgyzstan's greatest opportunities as a "Water Power".

By Professor Dr Klaus Grewlich
Ambassador of the Federal Republic of Germany to Kyrgyzstan

Source: The Times Central Asia, 5.04.2007

DEVELOPMENT PROSPECTS OF RENEWABLE ENERGY IN KAZAKHSTAN ROUND TABLE IN MAJILIS OF RK PARLIAMENT

29 March Majilis of RK Parliament held a round table on theme Development Prospects of Renewable Energy in Kazakhstan, which was organized by the Majilis Committee on Environment and Nature Management Issues in partnership with the British Embassy in Kazakhstan and UNDP, CARNet reported referring to press service of Majilis Board.

The round table participants were deputies of Parliament, minister of environment, vice-minister of energy and mineral resources, representatives of ministries and agencies, national companies, embassies of Great Britain, Germany and experts of international organizations.

As the Chairman of the Committee on Environment and Nature Management Issues, Erlan Nigmatulin said the aim of the round table was to discuss importance of developing renewable energy for sustainable economic and environmental development of Kazakhstan. The round table also discussed possible regulative and legislative mechanisms that are necessary for support of renewable energy sector in Kazakhstan.

The price for using of hydrocarbon is becoming too high. This issue goes beyond the economy and affect major constituents of our planet climate, flora, fauna, ocean. All is affected due to that we depend on fossil fuel. Renewable energy sources and sustainable energy resources provide partly answer for the problems that we now face. In the near future we will need coal, gas and oil as now, but we should start using it in more effective and rational way. At the same time we need to develop legislative base which will support and attract investments into wind, solar and other sustainable energy resources use, Angus Miller, Council of Great Britain on Energy issues of Caspian region said.

Presentations made by the UNDP and Shell were about important aspects and prerequisites for renewable energy sources in Kazakhstan including limited traditional energy sources and climate change.

Participants noted that round table helped them to collect all arguments in favor of developing renewable enrgy sector in Kazakhstan both for stimulation of economic development in Kazakhstan and protection of environment. They stressed the importance of discussing the issues concerning legislation in renewable enrgy sources area as well as the need for further activities in the given area.

Source: CARNet press service, 5.04.2007