tariff increases seem to be off the table for the foreseeable future. Emphasis mphasis instead is on reducing corruption within the energy sector by strengthening state control and civic engagement. Whether this approach can significantly reduce losses and attract the capital and expertise needed to reduce the on-going decapitalization of Kyrgyzstan’s energy sector, and improve national and household energy security, remains to be seen. •
The deterioration in energy sector financial performance during a time of sharply shar rising prices can be explained in part by rapid growth in costs. While some of this cost growth reflects the need to build new and refurbish depreciated infrastructure, it may also stem from ineffective cost controls when it comes to the procurement of materials (especially fuels), particularly in the electric power sector.
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Important mportant progress has been made since the onset of the winter energy crisis in 20072007 2008. Collection rates in the electricity sector have improved significantly as the quasiquasi fiscall deficit has dropped; fixed asset depreciation in the gas sector has fallen; and the basic legal framework for the development of decentralized renewable energy technologies has been introduced. New electricity generation capacity has been brought on line,, particularly in terms of the Kambarata Kambarata-2 2 hydropower plant. The Fuel and Energy Sector Transparency Initiative is beginning to improve regulatory governance and increase civic engagement.
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While survey data indicate that energy consumption increased duri during ng 2006-2009, 2006 all this growth occurred during 2006 2006-2008; large declines in energy consumption were reported in 2009. Growth in energy consumption seems to have been particularly rapid in poor and extremely poor households, households in urban areas, and in households headed by a single parent. Growth in energy consumption was more moderate in households living in rural and mountainous areas.
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While the shares of household expenditures devoted to energy increased during 20062006 2009, compared to many other cou countries, they do not seem to be particularly large (5.5(5.5 6.5 percent). And while energy expenditures absorb a larger share of household budgets in poor families than in high high-income income families, the share of household spending devoted to energy expenditures in low ow-income income households had converged towards national averages by the first half of 2010.
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Low-income income households, and households in rural and mountainous areas, have very limited access to gas, central heating, and hot water supply. They tend to rely almost exclusively on coal and electricity for heating, as well as for light. This is particularly the case for Kyrgyzstan’s n’s poorest households, for whom spending on electricity absorbs about half of energy expenditures. It also means that such households are more mor likely to be affected by interruptions in electricity supplies. By contrast, urban and upper-income upper households are more likely to have access to gas, central heating, and hot water.
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