The State Committee for Industry, Energy and Mining of the Kyrgyz Republic hereinafter - SCIEM KR

INDUSTRY ENERGY MINING

2017 SCIEM within the system of executive bodies of the Kyrgyz Republic

The Government of the Kyrgyz Republic comprises ministries and committees

Committees Ministries

The State Committee for Industry, Energy and Mining of the Kyrgyz Republic

Is responsible for Fuel and energy complex, Industry, Mining (subsoil use) and renewable energy sources. The Committee develops and implements unified state policies; Encourages direct domestic and foreign investment; Promotes introduction of advanced methods and technologies; Forms the mechanisms of governmental support in the above sectors. Industry of Kyrgyz Republic

http://gkpen.kg/3 Production sectors as of end of 2016.

15.4% 50.1% Power Generation Metallurgy

6.8% Building materials

2.5% Textiles & leather

11.9% Food processing Industry Volumes of industrial production (billion som)

Industry w/o Kumtor

Industry Oil refining companies in the Kyrgyz Republic

TDNPZ LLC Keminsky Oil Refinery LLC Junda Ltd

SV Rich LTD

Kyrgyz Petroleum Company CJSC

Industry Technopolis Industrial Zone

The Kyrgyz light industry became the trademark of the Kyrgyz Republic, the brand "Made in " enjoys well-deserved reputation; our clothing and leather goods are in high demand. In order to implement the Technopolis industrial zone project, the Voenno-Antonovka Rural Council of district, Chui oblast allocated 40 ha for the construction of the industrial area; it will accommodate over 40 sewing enterprises. Another Technopolis branch will be established near , where about 20 sewing enterprises will be operating. The Technopolis industrial zone project, once in operation, will provide jobs for about 10,000 people.

Industry Project Technopolis-South

• The target organization of the technopolis is the development of textile and clothing production, the organization of an additional 5000 thousand jobs, the attraction of new technologies, the diversification of industrial production. • To date, the Legprom Association has 108 enterprises in the region and 35 enterprises in the Jalal- Abad region. Stages of the project "Technopolis": I stage of implementation (5-7 months) 1 Step. The land is allocated: Step 2. Development and approval of a feasibility study (TEO), including:

40, 74 ha 1. Design and estimate documentation - On the territory of the with elements of the life support of the enterprise (electricity and water supply); Voenno-Antonov Aiyl Aymak, Sokuluk district of 2. Determination of the total amount of the Chui region the project financing, the share of the By the decree of the Government of founder's own contribution, the the KR of June 23, 2017, No. 403, for repayment schedule, the amount of the implementation of the revenue and the possible risks of the "Technopolis" project, a land plot project. was granted for temporary use. II stage of implementation: Construction of an industrial zone

The estimated cost of the project is about $ 45 million, including a residential complex for employees of the project "Technopolis". III stage of implementation (6-7 months)

• equipment of enterprises with technological equipment, production lines, quality control means, etc.

• commissioning of the project of the industrial zone "Technopolis"

11 List of Kyrgyz enterprises ready for joint Industry operation 1. Tunguch JSC 2. Ak-Tash JSC 3. Oremi OJSC 4. Kristall OJSC 5. Avignon LLC 6. Saz-Bulak LLC 7. Reinforced Concrete OJSC 8. Dostuk Plant OJSC 9. KSM Plant OJSC 10.Electrotechnical Plant OJSC 11.Khaidarkan Mercury Plant JSC 12.Kainda Cable Plant OJSC 13.Issyk-Kul Regional Construction Materials JSC 14.Kadamjai Antimony Mining and Processing Plant OJSC 15.Mailuu-Suuy Electric Bulb Plant OJSC 16.Kyzyl-kiya Machine Manufacturing Plant OJSC 17.Kara-Balta Experimental Plant LLC List of Kyrgyz enterprises ready for joint Industry operation

18. MATA OJSC 19. Karton (Cardboard) CJSC 20. Ilbirs OJSC 21 .Shalbar LLC 22. Linoleum OJSC 23 .Doma Ata LLC 24 .KPF Kasiet LLC 25. Kara-Balta Kilem JSC 26. Altyn-Azhydaar LLC 27. Kozhevenny Zavod (Tannery) LLC 28. Tobacco-Fermentation Plant LLC 29. Limatex Cotton Corporation LLC 30. Kyrgyz-Chinese Paper Factory OJSC 31. Kyrgyz Worsted Cloth Factory OJSC 32. Experimental Leather Goods Association JSC List of Kyrgyz enterprises ready for joint Industry operation

33. Kelechek OJSC 34. Sut-Azyk CJSC 35. Yntymak OJSC 36. SSSR (USSR) AS LLC 37. Agproplast SK 38. Asia-Dan AOOT 39. Et (Meat) LLC 40. Ak-Suu Vita JSC 41 .Toshtuk- LLC 42. Kaindy Et (Meat Production Plant) JSC 43. Balykchi Meat Production Plant LLC 44. Karabalta Alcohol Production Plant State Enterprise Energy sector of Kyrgyz Republic

http://gkpen.kg/15 Power Generation

Prospects for the General indices of energy development of the potential industry

Hydropower potential HPP projects capacity 15,500 MW 32 HPPs - 6,345 MW

Within the CIS rankings SHPP projects Kyrgyzstan takes the 3rd place 63 MHPP - 258 MW

Percentage of capacity Average annual output development 10% from the total capacity 25 billion kWh SCIEM's objectives in the energy sector Power Generation

 implementing energy saving and energy efficiency

 Promoting investment into the construction of the hydroelectric power plants cascade;

 development of power stations;

 intensifying geological exploration for oil, gas and coal

Resources: Hydropower: 142 billion kWh Wind farms - 44.6 million kWh Solar - 490 million kWh Biomass - 1.3 billion. kWh Carbon: 1.5 billion tonnes Hydrocarbons (gas, oil): 145-260 mln tonnes Electric power grid of Kyrgyzstan Power Generation

Prospective markets for electric power: - Kyrgyzstan 500 kV Datka-Kemin power line - Kazakhstan 500 kV power line (preliminary) - Tajikistan 500 kV Datka-Khujand power line, CASA-1000 project - Afghanistan 500 kV Sangtuda-Kabul power line, CASA-1000 project - Pakistan 500 kV Kabul-Peshawar power line, CASA-1000 project - China 500 kV power line (preliminary) Hydropower potential 2

General indicators Industry prospects

• The general hydropower potential of the Kyrgyz • On the Naryn river it is possible to build 8 cascades Republic - 142.5 billion kWh with 34 hydropower plants. • The republic is on the third place in CIS after • Total installed capacity of the prospective cascades is Russia and Tajikistan 6 450 MW • The percentage of the potential reclaiming is only • The average annual production of more than 25 billion 10% kWh of electric power

Location of HPPS on the Naryn river

Operating HPP HPP under construction Prospective HPP Kambarata HPP-3 Kambarata HPP-2 Kambarata HPP-1

Toktogul HPP

Kurpsai HPP Tashkumyr HPP Shamaldysai HPP Atbashy HPP Uchkurgan HPP

Datka SS 3 Prospective HPPs

Ala-Bel Operating HPP HPP under construction Prospective HPP Kambarata HPP-3 Kambarata HPP-2 Kambarata HPP-1

Toktogul HPP

Kurpsai HPP Tashkumyr HPP Shamaldysai HPP Atbashy HPP Uchkurgan HPP

Datka SS

- Kambarata HPP-1 1860 MW - Upper Naryn cascade of HPPs (4 units) 237,7 MW - -Kokomeren cascade of HPPs 1305 MW (3 units) - Kazarman cascade of HPPs(4 units) 1160 MW - Atbashy cascade of HPPs (5 units) 132,2 MW - Alabuga cascade of HPPs (4 units) 414 MW - cascade of HPPs (5 units) 439 MW - cascade of HPPs (2 units) 1800 MW Construction of Kambarata HPP - 1 4

Kambarata HPP-3

Kambarata HPP-2 Kambarata HPP-1

Toktogul HPP

No. on Site name Number of units Installed Average annual Reference the capacity, MW production, mln. capital map KWh expenditures, mln. USD

18 Kambarata HPP-1 4 1860 5640 2868,5

The feasibility study for the project was developed by the Consortium between SNS-Lavalin International Inc. (Canada) and Southern Engineering Energy Center (Russia). 5 Construction of the Upper Naryn cascade of HPPs

Atbashy HPP

No. on the Site name Number of units Installed Average annual Reference map capacity, MW production, mln. capital KWh expenditures, mln. USD 5 Akbulun HPP 2 87,4 345,5 207,14 6 Naryn HPP-1 4 47,7 187,5 170,81 7 Naryn HPP-2 2 47,6 188,8 143,88 8 Naryn HPP-3 2 55 220,5 205,82 Total 237,7 942,4 727,65

The feasibility study for the project was developed by Lengidroproekt JSC (Russia) 6 Construction of Suusamyr-Kokomeren cascade of HPPs

Ala-Bel

Toktogul HPP

Name of HPP Installed capacity, Average annual Reference capital MW generation, mln kWh expenditures, mln. USD

Kokomeren HPP-1 360 (4х90) 848 1607,760

Kokomeren HPP-2 912 (4х228) 2371 1478,352

Karakol HPP 33 (2х16,5) 104 257,829

Total 1305 3 323 3 343,941 7 Construction of Kazarman cascade of HPPs

No. on Name Reservoir volume, Installed capacity, Generation, million the map mln.m3 MW kWh

14 Alabuga 2835,5 600 2358,3 15 Karabulun-1 110,0 149 536,0 16 Karabulun-2 110,0 163 852,0 17 Toguztoro 168,46 248 915,3 Total 1160 4661,6 8 Construction of Atbashy cascade of HPPs

Atbashy HPP

No. on the Name Reservoir volume, mln.m3 Installed capacity, MW Generation, million map kWh 29 Taldysu 1 306,5 20,0 119,0 30 Taldysu 2 - 26,7 161,0 31 Oitersken 1 - 28,5 172,0 32 Oitersken 2 - 17,0 102,0 33 Akzhar 278,3 40,0 199,0 Total 132,2 753,0 8 Construction of Atlabuga cascade of HPPs

Atbashy HPP

No. on the Name Reservoir volume, mln.m3 Installed capacity, MW Generation, million map kWh 36 Arpan 1 310,0 136,0 556,0 37 Arpan 2 200,0 58,0 217,0 38 27,0 112,0 465,0 39 Saz 19,8 108,0 473,0 Total 414,0 1711,0 8 Construction of Kulanak cascade of HPPs

Atbashy HPP

No. on the Name Reservoir volume, mln.m3 Installed capacity, MW Generation, million map kWh 9 Atbashy (on the Naryn 16,0 135 756,7 river flow) 10 Uchkun 8,6 88 551,8 11 Aktala 24,0 38 238,9 12 Djilanaryk - 1 - 80 503,0 13 Djilanaryk - 2 - 98 617,4 Total 439 2667,8 8 Construction of Chatkal cascade of HPPs

Tashkumyr

No. on the Name Reservoir volume, Installed capacity, MW Generation, million map mln.m3 kWh

40 Barkrau 3700 700 1230

41 Lower Chatkal 32 1100 1420

Total 1800 2650 10 small HPPs with payback periods of up to 8 years

Name of the project Name of the project

"Kirovskaya" - with an installed capacity of 20 "Sandyk - 1" - installed capacity of 20 MW. MW. ( region) (Chui region)

"Leilek" - installed capacity "Sandyk-2" - installed capacity of 20 MW. 10 MW. ( region) (Chui region)

"Orto-Tokoy-1" - installed capacity of 21 MW. "Sandyk - 3" - installed capacity of 20 MW. (Issyk-Kul region) (Chui region)

"Orto-Tokoy-2" - installed capacity of 3 MW. "Chon-Aksuu" - installed capacity (Issyk-Kul region) 5 MW. (Issyk-Kul region)

"Papan" - the installed capacity of 20 MW. "Chon-Kaindy" - installed capacity of 5 MW. () (Chui region)

Энергетика 29 Mining of Kyrgyz Republic

http://gkpen.kg/ 30 Mining industry in the economy of the Kyrgyz Republic

31.8% of the total investment

50.1% of the total industrial capacity

Mining (Subsoil Use) Mining

Production structure Mining enterprises

3% 4% Operating Projected 4% 1. Kumtor Gold 14% 2. Makmal 3. Solton-Sary 1. Kuru-Tegerek Non-metallic raw 2. Chaarat materials 4. Tereksay Coal 5. Jamgyr 3. Kutessai II 6. Khaidarken 4. Kensu Oil and gas 7. Kadamjai 5. Trudovoye 8. Kara-Balta 6. Uchkoshkon Metals 75% 9. Levoberejny 7. Shiraljin 10. Bozymchak 8. Shambesai 11. Ishtamberdy 12. Karakazyk Main mineral and raw material potential

№ Commercial (balance) Mineral reserves (total for KR) 1 Gold 565.8 t 2 Tin 186.8 kt 3 Tungsten 117.2 kt 4 Antimony 264 kt 5 Mercury 39.5 kt 6 Rare earth metals 51.5 kt 7 Copper 314.5 kt 10 Coal 1.3758 billion tonnes 11 Fresh ground water 10627.2 thousand m3/day 12 Mineral water 15666 tonnes m3/day Taxation of mining enterprises

Tax Rate Allocation

Income tax 10% of profit KR budget

Tax on incomes of mining 1% to 20% (depending on the price of KR budget enterprises gold)

Interest tax 10% of the paid interest KR budget

Tax on income of foreign 5% of the cost of services, 10% of companies not having a dividends, income from interest, royalties, KR budget permanent representation cost of work, etc. in the Kyrgyz Republic 12% of the taxable value of supplies/imports Value added tax (VAT) KR budget 20% of the cost of surplus material resources From 1% to 3%, depending on the type of Sales tax KR budget supply and the status of the subject Taxation of mining enterprises

Tax Rate Allocation

Varies for different types of mineral Bonus KR budget resources

KR budget 1% to 12% (depending on the type of Royalties mineral and reserves of the deposit) 50% local budget, except gold

Land tax Subject of taxation is the land area Local budgets

Property tax Subject of taxation is the assets Local budgets

10% of income paid to employees and Income Tax KR budget other individuals Social responsibility Http://gkpen.kg/

Non-tax payments Title Rate Allocation Subsoil license holding fee - area - date of license issue Local budget - type of commercial mineral Deduction for development Local budget of local infrastructure from 2% of revenues from the sale of mineral deposits minerals not accounting for KR budget developers indirect taxes (Regional Development Funds)

Social package In the form of an agreement between the subsoil user (mining company) and local communities in accordance with which the subsoil user provides material, social and other support to local communities residing in the locations of the mineral development area. Deposits announced for tender

Kara-Keche and Ak-Ulak brown coal fields (500 million tonnes.) Sulukty brown coal field - field number 11 (114 million tonnes)

Tyuk-Kargash black coal field (up to 100 million tonnes)

Tegen black coal field (53 million tonnes.)

Mining Kara-Keche, Minkush

. Development of brown coal fields Kara-Keche and Minkush (Ak- Ulak section); . Construction of Kara-Keche TPP; . Construction of Balykchi-Kara-Keche railway line

Mining Couttesay-II, Kalesai

• The commercial reserves of the Kutessai II rare-earth deposit of categories В+С1+С2 are as follows: Ore - 20,2 million tonnes; rare earth element content - 51,5 kt, molybdenum - 2,4 kt, bismuth 2,3 kt, lead - 21,3 kt. • Explored reserves of beryllium of the Kalesai deposit: Ore - 9,245,000 tonnes, beryllium oxide - 11,701 tonnes.

Mining Creating positive investment environment

The rule of the first application CRIRSCO Advisory Board (first come - first served)

Mining Code Single window Http://gkpen.kg/ Www. Gkpen.kg [email protected] [email protected]

Thank you!