To reduce its vulnerability to being squeezed by Kazakhstan and Uzbekistan on energy supplies, Kyrgyzstan’s government is rushing into Russia’s embrace. Some experts, however, believe Bishkek is solving one problem by creating another.
Under an agreement signed July 26, the Kyrgyz government agreed to sell Kyrgyzgaz, a state entity that operates the Central Asian nation’s natural gas network, to the Kremlin-controlled energy behemoth Gazprom for the symbolic price of $1. As part of the deal, Gazprom agreed to invest upwards of $600 million to improve the Kyrgyz gas grid, as well as assume Kyrgyzgaz’s estimated $38 million in debt.
The Kyrgyz parliament must ratify the agreement before it can go into effect. The ratification process is expected to get underway in September.
The Kyrgyz company’s indebtedness is such that CEO Turgunbek Kulmurzaev told local media outlet Vecherniy Bishkek that Kyrgyzgaz is effectively “bankrupt.” There is “no other choice” but to sell it, given the company’s difficulty in meeting domestic needs on its own, he added.
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Asel Kalybekova is a freelance reporter based in Kyrgyzstan.