The Governments of Russia and Kyrgyzstan signed an agreement this month in Bishkek outlining the plans for development of this project. The companies will set up a 50/50 venture, with the Russian Federation to provide 50% of the necessary funds to RusHydro to finance the construction and guarantee that the JV obtains a loan facility to cover the other 50% of construction cost. The Kyrgyz party will contribute land rights and other assets. The full project’s financing scheme and terms of RusHydro’s involvement in the project will be determined after feasibility study is complete.

The agreements also stipulate that for duration of the project’s payback period JSC Electric will transfer a 25% stake in the project under RusHydro’s trust management; Rushydro will have strategic and operating management of the project; the JV will be exempt from property tax and land-use tax; and Russia and Kyrgyzstan will exempt construction equipment, plant’s equipment and vehicles from customs payments.

The Ministry of Energy of the Russian Federation and Ministry of Energy and Industry of the Kyrgyz Republic will be the coordinators of the project.