Kyrgyzstan's Parliament Approves Sale of Kyrgyzgaz to Gazprom

Kyrgyzstan’s Parliament gave the final green light to the acquisition of Kyrgyzgaz by Russia’s Gazprom, despite the difficulties met in the last weeks. The decision, backed by 65% of the deputies, hands Moscow control of the infrastructures owned by the country’s natural gas monopolist. 

With the $1 agreement, Gazprom will control pipelines, gas distribution stations and underground storage facilities. The deal signed in July this year required the approval of the Kyrgyz Parliament. The vote of the parliament had encountered difficulties in the last weeks, with some members of the ruling coalition backing away.

But at the end, the cash-strapped Kyrgyz government saw it fit to sell off the heavily indebted Kyrgyzgaz rather than continue to throw money at a company that was effectively bankrupt.

Gazprom will pay off the company’s $40 million debt. It also committed to invest $610 the infrastructures in the next five years.

The Kyrgyz government will have the opportunity to support other investors later on. It also has an option to buy back the Kyrgyzgaz assets in 25 years. 

Kyrgyzstan is completely dependent on its neighbours - particularly Uzbekistan, Kazakhstan and Russia - for oil and natural gas supplies. It has had issues paying for its energy imports from these countries.