body; - tighten responsibility of consumers and senior officials of energy companies for electricity and natural gas theft, including criminal, administrative and disciplinary liabilities; - establish an Independent Settlement Center to ensure that the sector’s cash flow is distributed in a transparent and justified manner to all energy companies based on actual power flows and set tariffs. 2) Draft settlement rules and procedures for power flows of energy companies; 3) Explore possible risks and advantages of reorganizing distribution energy companies (DisCos), including changing organizational structure of DisCos (rebundling, unbundling, “as is”). Ensure implementation of functions of an Independent Settlement Center Make a respective decision upon results of a and thorough analysis The Contract should provide for full rights to manage and operate a company and to be held accountable for improved Development of criminal legal regulations envisaging liability for theft of electricity and natural gas Determination of an organizational and legal structure of an Independent Settlement Center and preparation of its constituent documents Draft decisions by the KR Government MEI, State Property Fund MEI, State Property Fund Throughout 2014 Second half of 2013
2. Management modernization and ensuring financial sustainability 1) Implement measures for improving management and procedures and mechanisms of transparency in all energy companies, including the following: - Recommendations to each company to form an Internal Audit Departments (IAD), and introduce relevant amendments to the constituent documents and companies’ organizational structure. The IAD staff shall be accountable only to the Board of Directors; - Introduce amendments to contracts with the members of the Board of Directors of each energy company; Improved management of energy companies, increased transparency in their activities Improvement of organizational structure, streamline business processes, introduce Management Information Systems Strengthen responsibility of the members of Board of Directors for assuring the steady improvement in the company’s commercial operations and achievement of indicators specified by the Performance Agreements signed with the MEI and Department for Regulating FES Decisions by energy companies to introduce amendments to the companies’ charters Contracts on introducing amendments and additions into the contracts with the Board of Directors members Energy companies’ funds; Raised funds from the development partners MEI, State Property Fund, Ministry of Economy 2014
- Introduce a reliable information systems creating conditions for successful passing of audit; - Attract audit companies from the top 20 audit companies on the basis of a competitive tender for conducting audit of companies’ business processes; - Perform full-scale audit in JSC Power Plants, JSC NES of Kyrgyzstan, and distribution companies by international audit companies from the Top 20 audit companies. - Increase competence of members of the General Directorate of energy companies by determining new selection criteria and conduct of open competitive selection. Introduce International Financial Accounting Standards Build an effective system of internal controls, accounting and reporting systems. Selection of a manager with the experience of profitable management confirmed by company’s financial reporting and having a vision of the Company Development Strategy for 2-3 Elaborate recommendations to improve internal control, accounting and reporting systems Draft resolution of the GoKR “On Introducing Additions into Resolution No. 513 of the GoKR, dated July 20, 2012 “On Measures to Improve Efficiency of the Management System of commercial companies”. (Regulation on qualifications Development partners’ funds Development partners’ funds Development partners’ funds Development partners’ funds First half of 2014 Second half of 2014 First half of 2015 First half of 2014
- Add the following qualification requirements to the members of the Boards of Directors of energy companies providing that an applicant for the members of the Boards of Directors should submit specific proposals for strategic development and modernization of the company. years. Modernizing management and processes requirements set for applicants to management bodies of commercial companies). First half of 2014
payment of compensations for electric and thermal energy to vulnerable population, with secure and sustainable funding Address the ability of poor households to pay for electricity Draft appropriate draft resolution of the KR Government 4. and upgrade of electricity sector facilities Develop a list of prioritized projects for reconstructing energy infrastructure facilities with identifying financing sources. Study reasonability of withdrawing Bishkek CHP from JSC “Electric Power Plants” to the independent enterprise merging with JSC “Bishkekteploset” as a single asset complex. Conduct a feasibility study and develop a financing strategy to increase the capacity of Bishkek CHP. Implementation of works for rehabilitating energy infrastructure facilities to ensure and restore reliable electricity supply Identifying priority rehabilitation projects. Not required MEI Energy companies (as agreed) Second half of 2013 Second half of 2013 Second half of 2013 5. Electricity loss reduction Introduce an up-to-date Automated Commercial Electricity Metering System (ACEMS) at JSC NES Kyrgyzstan to Increased reliability of the metering data on amount of electricity Implementation of the Energy Sector Improvement Project According to the Implementation Plan of the Energy Sector Improvement MEI, JSC NES Kyrgyzstan (subject to approval) According to the approved project timeframe
Implement a public outreach campaign on the cost of providing electric and thermal energy supply and relationship between uninterruptable power supply and tariffs. Publish energy companies’ financial and operating activities’ reports on the companies’ and MEI’s websites. Information awareness of population about tariffs for electric and thermal energy supply, and relationship between uninterruptable power supply and tariffs. Ensure access by citizens to information about energy companies’ activity. Initiative in the FES”, dated July 20, 2010, and Order No. 139 of the KR Ministry of Energy and Industry, dated June 29, 2011. Mass media statements, field meetings with population, social advertisement. Publication of quarterly reports of Distribution Companies on customer service quality indicators set by the Standard. MEI, energy companies (subject to approval) MEI, energy companies (subject to approval) Second half of 2013 On an basis 4) Hiring independent international companies for oversight of design, procurement and construction of new large infrastructure projects, monitoring of expenditures, and for ensuring quality of construction works and equipment in compliance with Tightened oversight of design, procurement and construction of new large infrastructure projects, improved Make the requirement on hiring independent international engineering companies’ part of all contracts for construction of new large infrastructure projects. Budgets of projects in process MEI, State Technical Inspectorate, energy companies (subject to approval) On an basis