Kyrgyzstan's Odd Hydropower Deal Continues Making Waves in Czech Republic

Front page of Prague-based daily newspaper Lidové Noviny with a report about investigations into the granting of a contract by Kyrgyzstan to a little-known Czech company. (Photo: EurasiaNet.org)

The strange story of the mysterious Czech company that was awarded the right to build a hydropower plant in Kyrgyzstan has slipped off the radar in Bishkek, where the saga might be expected to garner most attention.

But media in the Czech Republic is still on the case, and the news is far from good for Kyrgyzstan.

Leading Prague-based daily newspaper Lidové Noviny reported in a front-page piece on August 21 that the Czech Security Information Service, or BIS in its Czech initials, is now investigating the circumstances by which Liglass Trading could have won the tender to build and operate a series of hydropower facilities in Kyrgyzstan.

The newspaper cited its own unnamed sources as saying the investigation was instigated at the behest of Foreign Minister Lubomír Zaorálek, but that there have been no results as yet.

Under a deal unveiled in July, Liglass Trading committed to build and run Akbulun HPP and Naryn HPP-1 in the Upper Naryn cascade, as well as a string of 10 smaller electricity-generating units.

There was only one problem. Barely anybody had ever really heard of Liglass Trading. And then when reporters from one publication, Aktuálně, decided to check out the address where the company is registered, and all they found was a crumbling factory with a leaky roof.

Most worryingly for the ruling elite back in Kyrgyzstan, the Lidové Noviny article also dwelled on the special role played in this affair by Sapar Isakov, head of the administration and monied crony of President Almazbek Atambayev.

The story begins in the fall of 2016, when Isakov’s Czech counterpart, Vratislav Mynář, sent a letter to the Kyrgyz presidential administration recommending the services of Liglass Trading.

Seemingly on this basis alone, Liglass Trading got the nod. Only after the results of the tender were announced did it emerged that the company was not just obscure but also money-losing. In 2014, the company reportedly made losses of $50,000, despite the insistence of Kyrgyz officials that it has 383 million euros ($451 million) on its bank account. 

Bishkek will have to hope that is true since Liglass Trading is required under the terms of the contract to drum up $230 million to fund work on the Upper Naryn cascade. To date, however, the Czech company has failed to even stump up the $37 million it had committed to pay to buy out the previous leader on the project, Russia’s RusHydro.

To Kyrgyzstan’s dismay, RusHydro pulled out of the project in 2015, citing cashflow troubles. Despite reneging on its part of the deal, RusHydro still insisted on being paid the $37 million it said it had spent on starting work on the hydropower facilities.

Outgoing Prime Minister Sooronbai Jeenbekov put a brave face on August 21 on Liglass Trading’s inability to provide even the initial funds it had promised.

“The money has not been transferred, but there is time yet. The agreement is sound. Work is still ongoing,” he was cited as saying by 24.kg news agency.

Even with this dubious background music, the flurry of communication between Isakov and Mynář continues to be intense. Mynář told Lidové Noviny that over the past two months alone he has spoken with Isakov on more than 40 separate occasions.

Despite all this, there is still much talk about the likelihood of Isakov taking over the prime minister’s seat. Jeenbekov announced his departure from the job on August 21 as he devotes himself full time to campaigning for the presidential election, which is to take place in mid-October. Even if Isakov doesn’t take over the premier’s job immediately, there is every likelihood he could get the nod later, in the event of Jeenbekov’s election — although that itself is a far from certain outcome.

Kyrgyzstan's Odd Hydropower Deal Continues Making Waves in Czech Republic

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