Construction began in 1986 on the Soviet-era hydro station and sister project 360-MW Kambarata 2. (HNN 9/25/08) Work halted when the Soviet Union collapsed. Early last year, Electricite de France and PricewaterhouseCoopers of the United States were declared winning bidders for an investment study of the completion of two projects on Kyrgyzstan's Naryn River. (HNN 1/4/08)
Russian President Dmitry Medvedev announced the aid package February 3, saying it would help Kyrgyzstan stabilize its finances and develop its industry including the hydropower sector.
Kyrgyz Prime Minister Igor Chudinov discussed the agreement in a news conference February 4, saying construction of Kambarata 1 would take seven years and create 15,000 to 18,000 jobs. Kyrgyz media reported Kambarata 1 would be developed by a joint stock company formed by Russian electricity import and export utility OJSC Inter RAO UES and Kyrgyzstan utility OJSC Elektricheskiye Stantsii, each of which are to own 50 percent of the venture.
Shortly after securing the Russian funding, Kyrgyz President Kurmanbek Bakiyev announced the plans to close the United States' air base at Manas, Kyrgyzstan, a strategically important link in supply to U.S. forces in landlocked Afghanistan. The announcement left the United States scrambling to find alternative supply routes through other parts of Central Asia.
Russia, irked by the U.S. military presence in Kyrgyzstan which it regards as part of its strategic sphere of interest, has long exerted pressure on the landlocked and mountainous Central Asian country to evict the U.S. forces. However, Moscow, which operates its own military base in Kyrgyzstan, has strongly denied any link between its aid package and the move to shut Manas.