The European Bank for Reconstruction and Development ( EBRD ) is making a €61.7 million ( US$73.27 million ) sovereign loan to the Kyrgyz Republic to help it modernize its electricity grid.

The loan, complemented by an investment grant of up to €3 million and technical cooperation funds amounting to €3 million, will help finance critical upgrades to the national electricity transmission infrastructure, leading to a more reliable supply, better integration of renewable energy, and reduced greenhouse gas ( GHG ) emissions. Technical cooperation funds will be used to support project procurement and supervise construction work.

The financing will support the National Electric Grid of Kyrgyzstan, the country's majority state-owned electricity transmission and distribution company, in constructing a new 53-kilometre, 500-kilovolt transmission line between the towns of Kemin and Balykchy near Issyk-Kul in the northeast of the country. The funds will also allow for a new 500 kV substation in Balykchy. 

According to the EBRD, the country’s hydro-rich electricity sector has faced mounting challenges from decades of underinvestment and ageing infrastructure. Around 90% of substations across the Kyrgyz Republic are more than 25 years old. Technical and commercial losses across the transmission and distribution network currently stand at nearly 14.6%, well above international standards.

The modernization is expected to deliver substantial environmental benefits, reducing electricity losses by 34 gigawatt-hours annually and cutting GHGs by 3,323 tonnes of emissions each year.

Beyond domestic benefits, the enhanced infrastructure will help the Kyrgyz Republic to become a regional exporter of green energy. With improved grid stability and interconnection capacity, the country will be able to export surplus clean hydroelectric power to neighbouring nations, contributing to the region’s broader energy transition.