In the Region
Kyrgyzstan Falling Deeper in Debt to China
Kyrgyz authorities just announced several major deals with Chinese companies to develop green energy projects and coal mining, both of which Kyrgyzstan badly needs.
The downside is that it appears Kyrgyzstan is about to go deeper in debt to China, though the financial terms of these latest deals have not been made public yet.
The agreements were announced on October 25, during a visit by Chinese Premier Li Qiang. Li was visiting Kyrgyzstan for a meeting of prime ministers from the Shanghai Cooperation Organization.
Kyrgyzstan is facing severe energy shortages.
In July, the country declared a three-year energy emergency, from August 2023 through December 2026.
Kyrgyzstan’s biggest source of domestically produced energy is hydropower, but three straight years of drought and reduced precipitation are making hydropower less reliable.
Coal is still widely used for winter heating and thermal power plants, but supply has not met demand in recent years.
State coal company Kyrgyzkomur signed agreements with three Chinese companies to develop six coal fields and build a $50-million coal logistics center near the Kyrgyz-Chinese border.
Deals were also signed with two Chinese companies to construct windfarms and solar power plants capable of generating some 3000 megawatts (MW) of power.
In addition, the Chinese company TBEA will build the Sary-Jaz Cascade hydropower plant project along the eponymous transborder river that flows from northeastern Kyrgyzstan into China.
The hydropower plant project, which aims to generate 1160 MW, is estimated to cost several billion dollars.
Why It’s Important: Kyrgyzstan needs more electricity. However, Kyrgyzstan has been trying to avoid going deeper in debt to China.
Kyrgyzstan already owes China’s Eximbank some $1.7 billion, more than 40 percent of Kyrgyzstan’s foreign debt.
The value of the 29 agreements just signed between Kyrgyzstan and China is $1 billion.
According to a report from Kyrgyzstan’s 24.kg media outlet, Kyrgyzstan “does not have its own funds” to implement the projects.
So, it appears Kyrgyzstan will be taking loans from China again.
That might explain why reports said “most of the coal produced will likely go to China,” as much as 70 percent of the extracted coal from at least three of the six mines.
These coal exports might be partial repayment for the investment in developing the coal fields, though it still leaves Kyrgyzstan with the remainder of the debt and the environmental damage from the mining sites.
Kyrgyzstan depends on coal for heating in the winter. In September, the government banned coal exports by road for six months, except exports to China.
The coal logistics center will be built near Erkeshtam, one of two border crossings between Kyrgyzstan and China, presumably for easy export to China.
Kyrgyzstan does not seem to be receiving much from these deals – except more debt.
Why Did Kazakhstan’s Latest Mining Accident Happen?
The worst mining accident in Kazakhstan’s history happened on October 28, and to no one’s surprise, it involves ArcelorMittal Temirtau (AMT).
Forty-six miners are confirmed dead at the Kostenko coal mine in Karaganda Province, after a fire caused an explosion in the mine.
Kazakh authorities declared October 29 a National Day of Mourning.
On the day of the accident, Kazakh President Qasym-Zhomart Toqaev ordered the government to cease investment cooperation with AMT.
Hours later, ArcelorMittal released a statement that it had signed “a preliminary agreement for a transaction that will transfer ownership [of AMT] to the Republic of Kazakhstan.”
ATM has been operating in Kazakhstan since the 1990s, and manages Kazakhstan’s largest steel plants, and eight coal mines.
The company’s safety record in the last two years has been horrendous.
Five more miners died in a fire at the Kazakhstanskaya mine on August 17, 2023.
The deaths are not only from methane leaks and explosions.
Four workers died at an AMT metallurgical plant on June 10, 2022 when the roof of a thermal furnace collapsed. A few days later, another worker at the plant fell to his death while repairing a boiler.
Why It’s Important: It is amazing these problems at AMT’s mining operations continued as long as they did. Kazakh officials knew and criticized safety conditions at AMT facilities.
On June 8, 2022, just two days before the thermal furnace roof collapsed at the metallurgical plant, Kazakhstan’s industrial safety inspectors said they had uncovered more than 200 violations at AMT facilities.
AMT was fined, but in September 2022, ArcelorMittal CEO Lakshmi Mittal visited Kazakhstan and smoothed out the problems, pledging to invest another $1 billion in projects there.
In December 2022, one month after the explosion at the Kazakhstanskaya mine, President Toqaev said more than 100 workers had been killed in work-related accidents at AMT since 2006.
Fines and inspections do not seem to have changed the dangerous working conditions at AMT, but Kazakh authorities allowed work to continue at those facilities.
The blame is on AMT – but Kazakh officials also have much to explain.
The Latest Majlis Podcast
This week’s Majlis podcast looks at how Kyrgyz authorities are using the law to hinder the work of independent media outlets and journalists.
Draft laws on media and on foreign-funded organizations could, if adopted by the Kyrgyz parliament, create further obstacles for independent media outlets, civil society organizations, and others.
This week’s guests are:
- Jasmine Cameron, senior legal advisor for Europe and Eurasia with the American Bar Association's Justice Defenders Program; and
- Aibek Askarbekov, Bishkek-based lawyer specializing in political, civil rights, and non-commercial law.
What I'm Following
Karakalpak Activist Receives Warning
Aqylbek Muratbai has emerged as one of the leading spokesmen for the Karakalpaks since Uzbek security forces used deadly force to stop protests in Karakalpakstan in July 2022.
Muratbai, who is in Kazakhstan, has been one of the few sources of information about Karakalpakstan, using social networks to post about his homeland.
On October 25, he posted on X that he had been “invited” to the Uzbek consulate in Almaty, Kazakhstan to discuss recent threats to his relatives back in Karakalpakstan.
Muratbai said officials at the Uzbek consulate asked him to “soften the tone of my speeches.”
UN Continues to Press Tajikistan on Imprisoned Rights Defenders
UN Special Rapporteur on the situation of human rights defenders Mary Lawlor posted on X that she met with Tajikistan’s Ambassador to the UN Jonibek Hikmat on October 24.
Lawlor wrote that she “reiterated” her call for the release of human rights defenders in Tajikistan, “including (Daler) Imomali, (Abdullo) Ghurbati, & (Ulfathonim) Mamadshoeva.”
Dozens of rights defenders, activists, lawyers, and others the Tajik government considers potential threats have been imprisoned in the last 18 months.
International rights organizations, individual governments, and others have called for these people to be released, so far without success.
Fact of the Week
In its 2023-24 index, the Georgetown Institute for Women, Peace and Security rated Kyrgyzstan the most dangerous country in Central Asia for women.
The study looks at “diverse pillars of women’s status – ranging from economic participation, to health, to risks of violence” in 177 countries to determine which are the safest and most dangerous for women.
Thanks for Reading
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Until next time,