Kyrgyzstan Promotes Regional Energy Exchange

Kyrgyzstan’s proposal to set up a single energy exchange market for Central Asia is unlikely to get off the ground without backing from Turkmenistan, Kazakstan and the world’s largest powers, say NBCentralAsia observers.



During his visit to Tajikistan on July 8, Kyrgyz foreign minister Ednan Karabaev put forward proposals to create a Bishkek-based single energy exchange market for Central Asia. This could include all of the Central Asian countries, along with heavyweight international players, such as the United States, Russia, the European Union and China.



Jyldyz Sarybaeva, head of the Kyrgyz foreign ministry’s international economic cooperation department and a member of the group which drafted the proposals, told NBCentralAsia that the energy exchange will help regulate the region’s electricity, oil and gas market.



Its main aim is to cut out the middleman and “grey trading” as well as making energy pricing more transparent and subject to market laws. Buyers and sellers will be able to access market information online in what Sarybaeva calls “exchange management”.



Sapar Orozbakov, director of the Bishkek Centre for Economic Analysis, says that while the region will need an initiative like this eventually, Kyrgyzstan cannot lead the way without first liberalising its energy sector.



Tajik political observer Parviz Mullojanov says that the energy exchange would be an effective trading tool provided it can secure the involvement of all countries in the region, as well as the major external geopolitical players.



The wider benefit of this new body will be felt only if all players in the region have access to a big enough market, says former deputy prime minister Ularbek Mateev.



Tajik political scientist Hodi Abdujabbor doubts that Turkmenistan, Uzbekistan and Kazakstan would want to get involved. Kyrgyzstan and Tajikistan would have to have to persuade them to actually sign up, rather than simply express their interest, and neither country has that kind of “powerful influence”, he says.



“Another crucial precondition is getting political backing for the idea and its implementation from the US, Russia and China. They are unlikely to take a common stance,” he said.



Uran Abdynasyrov, director of the Eurasian Studies public foundation in Kyrgyzstan, does not think that the exchange “will work according to normal market [mechanisms]”.



There is a need for an energy exchange like this but it is very difficult to talk about an organised market in Central Asia at this time, he says.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)