IEA forum in Kyrgyzstan – energy subsidies under spotlight

IEA forum in Kyrgyzstan – energy subsidies under spotlight

On 26-28 June 2018, Issyk-Kul hosted forum on energy security and public subsidies in the energy sector, organized by the International Energy Agency (IEA), under the European Programme EU4Energy.

Policy issues in the field of energy consumption restrictions, fuel switching, access to energy were among the keynotes on the agenda of the meeting, which gathered over 80 officials and experts from 11 countries-participants of the EU4Energy Programme: Turkmenistan, Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Ukraine and Uzbekistan.

The purpose of the forum was to discuss government subsidies for energy development. This is particularly the case when the government sets energy prices and subsidizes the development and use of different types of energy, thereby preventing investment in this sector and the energy system self-sufficiency.

At the same time, the subsidies invested often create that are below cost-recovery levels. In turn, this situation prevents the accumulation of sufficient financial resources in the energy sector and the maintenance of infrastructure in accordance with the necessary technical standards. As a result, outdated infrastructure often needs to be upgraded urgently.

Yet when upgrade project are implemented, they are often part of government-guaranteed long-term loans from international financial institutions. This, in fact, burdens public finances.

This creates a chain of factors that negatively impacts the entire energy sector, so one of the objectives of the forum is to find solutions to these problems.

One of the possible solutions lays in ensuring adequate tariffs, reflecting appropriate cost and planned capital investment. So, the forum participants have learned about good practice examples in relation to the gradual removal of subsidies and exchanged information on the tariff methodologies for electricity and heat tariffs.

The IEA energy data team has put together an interactive programme of exercises to help non data specialists to increase the use the data in decision making.

IEA is an autonomous organization with a membership of 29 countries (EU, USA, Turkey, Japan, South Korea, Canada, New Zealand). The Agency focuses on energy security, economic development and environmental awareness, including tackling climate change.

The four-year EU4Energy Programme, led by the IEA, was launched in 2016 and is aimed at aims to improve the quality of energy data and statistics, shape regional policy-making discussions, strengthen legislative and regulatory frameworks and improve access to information.