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Access to a reliable and adequate heating supply is critical not only for people¡¯s well-being, but for the daily functioning of essential public services. Given the cold climate and long heating seasons in the Kyrgyz Republic, access to reliable heating services is an essential need for everyday life ¨C but it is a need that is often not met.

In the cities of Bishkek and Tokmok, for example, around 20-25 percent of the residential and public heating demand is not satisfied every year due to insufficient and unreliable heat and electricity supply in winter.

Once the principal source for heating in the largest urban areas, District Heating (DH) systems now serve only about one fifth of the urban population and are in poor condition with deteriorating service quality. The majority of the DH infrastructure was commissioned 20-50 years ago and is under-maintained due to the lack of funds. Service quality is also deteriorating; during the heating season in 2013, for instance, DH customers in Bishkek experienced more than 300 network breakdowns, which is a six fold increase compared to the early 1990s.

The main cause of the decline in the heating sector is financial. Tariffs for heat and electricity are well below cost-recovery levels. Depending on the heating source, residential tariffs are estimated to be between 13-50 percent of the cost of heat supply. The lack of sufficient funds for maintenance and investments is a key reason for the continued decay of DH assets and the deteriorating service quality. At the same time, low electricity tariffs foster the use of electric heating and provide no incentive to end-consumers to invest in energy efficiency.

Around 35 percent of households in urban areas rely on electricity for heating, which accentuates winter power shortages. The decreasing service quality and reliability of the DH supply has increased reliance on electricity as a primary heating source, or to supplement insufficient DH supply.

The widespread use of electricity for heating is a key driver of growing residential electricity consumption during winter months: from 2009 to 2013 residential electricity consumption increased by more than 60 percent in the Kyrgyz Republic. Combined with the poor condition of the ageing power infrastructure and low hydropower output during winter, this increase in electricity load aggravates winter power shortages.

About 40 percent of urban households use inefficient and polluting coal-fired stoves or boilers. This high reliance on solid fuels and inefficient heating technologies mean that the Kyrgyz Republic is one of the two most-affected countries in the Europe and Central Asia region for diseases resulting from indoor air pollution.

The energy performance of residential and public buildings is poor, aggravating the gap between heat supply and customers¡¯ needs. The age of the building stock, lack of maintenance, and the absence of proper insulation result in high heat losses and low comfort levels in many buildings. There is significant potential, however, for improving the energy efficiency of the residential and public building stock by implementing basic energy efficiency measures.

An adequate combination of investment and policy measures is needed to address the main challenges in the heating sector and meet demand in different residential and public buildings. Key recommendations of the World Bank¡¯s include:

• Rehabilitating the DH network to improve service quality and supply reliability;
• Replacing over time all dilapidated small Heat-only-Boilers (HOBs) with efficient gas-fired HOBs;
• Replacing inefficient electric heaters and polluting solid fuel-fired stoves in urban and rural households;
• Implementing an energy efficiency program for public and residential buildings, and;
• Continuing to implement tariff and social assistance reforms to improve the financial viability of the sector and incentivize energy efficiency, while mitigating the impact of reforms on the poor.

The investments required to ensure a reliable heating supply in the Kyrgyz Republic are significant. To implement the recommended heating sector investments in Bishkek and Tokmok alone, it is estimated that US$ 214 million will be needed in the short-term, while around US$515 million will be needed in the medium- to long-term. Such investments will need to be carefully prioritized and financed through a combination of both public and private sources. But action needs to be taken now, if the Kyrgyz Republic is to adequately address its recurrent winter energy shortages and keep its citizens warm and safe.

The draft findings and recommendations of the Assessment were recently presented and discussed at two Heating Roundtables with the Government, other development partners and Civil Society Organizations.

The Assessment was supported by the World Bank¡¯s Energy Sector Management Assistance Program (ESMAP) and the Central Asia Energy Water Development Program (CAEWDP).