The Ministry of Energy's decision may lead to the bankruptcy of distribution companies

Ирина Орлонская Economy
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At the press conference held on March 12, the representative of the company OsOO "ESM-SI," Biynazar Berdikeev, expressed concerns that the decision of the Ministry of Energy could lead to the bankruptcy of distribution companies and deepen monopolization in the energy sector.

The main cause for concern was the discussion of the draft order dated September 12, 2022, regarding issues in the electricity sector for distribution enterprises, which was put out for public discussion on March 10, 2026.

The planned changes involve the introduction of a new electricity tariff for private distribution companies, which will depend on the weighted average cost of imports, instead of individually justified tariffs approved in April 2025.

Moreover, company representatives emphasize that information about the cost of electricity imports is classified and considered a state secret.

As a result, distribution companies face a dilemma: either sell their networks to the national company OJSC "NESC," or continue operating under a tariff that they believe could lead to financial difficulties.

According to experts, the buyout of private networks could cost the state around 5 billion soms. This, as company representatives claim, will increase the debt burden on the energy sector and ultimately fall on the country's budget.

Furthermore, the concentration of regulatory and control functions in one agency, according to distribution companies, could reduce the transparency of the industry's operations and limit competition. This circumstance could hinder the implementation of the common electricity market of the Eurasian Economic Union, the launch of which is planned for 2027.

The companies also have concerns that the proposed changes could lead to the exit of the private sector and a complete nullification of private investments in the industry.

In light of the above, distribution companies have called for a suspension of the introduction of the new "import tariff" until an independent examination is conducted. They also demand to ensure the independence of the regulator — the Department of Fuel and Energy Complex and the State Energy Inspection, removing them from the subordination of the Ministry of Energy.
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