Russian aid will total $630 million

Russian Deputy Prime Minister Igor Sechin visited Kyrgyzstan. The results of his negotiations with President Kurmanbek Bakiyev indicate that Russia is ready to write off Kyrgyzstan’s external debt in the amount of $180 million and provide it with financial assistance totaling $450 million. Now Moscow has the right to count on a favorable decision by Bishkek on the fate of the American military base on the territory of Kyrgyzstan . This issue, apparently, will be resolved by the presidents of the two countries during Kurmanbek Bakiyev’s visit to Moscow in early February.

Igor Sechin’s visit to Bishkek followed immediately after the Tashkent statement by Russian President Dmitry Medvedev about Moscow’s actual support for the Uzbek position on the issue of using the region’s water and energy resources. In neighboring Kyrgyzstan and Tajikistan, this approach was perceived very negatively. But unlike Dushanbe, which publicly expressed its bewilderment (see yesterday's Kommersant), the Kyrgyz authorities decided to wait for the arrival of the distinguished Moscow guest.

At a meeting with President Kurmanbek Bakiyev, the Russian Deputy Prime Minister confirmed the Kremlin’s readiness to write off Kyrgyzstan’s external debt in the amount of $180 million, as well as satisfy Bishkek’s request for grant assistance of $150 million and a soft loan of $300 million at 0.75% per annum for a period of 40 years with deferred payments for 7 years. The signing of the relevant agreements is scheduled for early February, when the Kyrgyz leader’s visit to Moscow will take place.

Debt write-off, according to the press service of the President of Kyrgyzstan, will occur in exchange for 48% of the shares of Dastan OJSC. This is the only former military-industrial complex enterprise operating in Kyrgyzstan that produces equipment for naval torpedoes, fulfilling orders from the defense departments of Russia, India and Ukraine. If the agreement is signed, Russia will become the largest shareholder of Dastan, since the remaining 52% of its shares are distributed among private individuals. Previously, according to a Kommersant source in the Kyrgyz government, Moscow insisted on receiving 51% of the shares, but eventually agreed to a smaller share.

A gratuitous grant of $150 million and a soft loan of $300 million will be used, as Kommersant has already reported, to support the Kyrgyz economy. Kurmanbek Bakiyev has repeatedly stated the need to find funds for the implementation of large national projects and support for the poor. According to the opposition, the authorities intend to use this money to create a favorable background for early presidential elections.

Igor Sechin discussed with the head of Kyrgyzstan the issue of attracting Russian investments in the amount of $1.7 billion for the construction of the Kambar-Ata-1 hydroelectric power station. During the negotiations, in particular, it was noted that these could be investments without providing government guarantees on the basis of equal participation of the parties. Kyrgyzstan (as well as Tajikistan) counts on Russian investments, but seeks to maintain control over its own water and energy resources. Dushanbe has already announced its refusal to give Russia 51% of the Rogun hydroelectric station under construction. Kurmanbek Bakiyev is not yet aggravating relations with Moscow, but, according to a Kommersant source in his administration, he does not rule out the possibility of looking for other investors. The fact is that the loss of the ability to manage one’s own water resources is regarded in Kyrgyzstan as a step towards the loss of state sovereignty. According to the former deputy head of the National Bank of Kyrgyzstan, and now an expert on external borrowing, Maksatbek Ishenbaev, equal participation in shares is beneficial for Kyrgyzstan, and the lack of government guarantees “could mean certain risks for Russia.”

Bek Kommersant-Orozaliev, Bishkek

Kyrgyzstan will forgive debts with additional payment