Kyrgyzstan Greenlights $58 Million Energy Deal with Islamic Development Bank

Kyrgyz President Sadyr Japarov has signed into law the ratification of a loan agreement between the Kyrgyz Republic and the Islamic Development Bank (IsDB) aimed at strengthening the country’s energy infrastructure in the Issyk-Kul region.

The agreement, signed on April 22, 2025, in Washington, D.C., provides Kyrgyzstan with a concessional loan of $58.25 million, forming the bulk of the $60.25 million project budget, The Caspian Post reports per Kyrgyz media.

The remaining $2 million will be covered by the Kyrgyz government to fund taxes, fees, land allocation, and preparatory works.

The project includes the construction of two major substations-“Karakol” (220/110/10 kV) and “Tamga” (220/110/24 kV)-and a 220-kilovolt transmission line spanning approximately 90 kilometers between the two locations.

The project is expected to significantly reduce electricity overloads in the southeastern part of Issyk-Kul province, improve power supply reliability and quality, and facilitate the connection of new infrastructure, including the flagship “Three Peaks” tourism initiative.

The IsDB loan features highly favorable terms, with a 25-year repayment period, including a seven-year grace period, and an interest rate capped at 1.5 per cent.