In contrast to neighboring countries, Kyrgyzstan has small amounts of fossil fuels, but enjoys large amounts of water resources and an abundant supply of hydro power. The bulk (90%) of Kyrgyzstan’s generating capacity is hydro power and the country has for some time now considered the development of hydro power resources as the central foundation of its overall economic development.

Kyrgyzstan also has locally exploitable coal, oil, and natural gas.It was the first country in the Commonwealth of Independent States(CIS) to develop an independent regulatory agency for economic regulation of the energy sector. Primary energy shares in 2008 comprised of the following : Hydro 31.8%, coal 18.5%, gas 21.5%, oil 28.1%, renewable and waste 0.1%. Approximately 95% of the population is connected to the grid. Losses in the distribution system range from 40-50% and reliability is poor. Electricity losses are greater in residential areas than non-residential areas and bout 30% of the distribution systems need to be replaced.

Low tariffs and abundant hydroelectric power resources have limited the development of renewable energy sources. Hydro-power is the only documented renewable energy source for electricity production on national level. There are, however, some potentials for solar energy and large scale and micro-hydro power plants. There are about 2,600 hours of sunshine per year and radiation is 1,500-1,900 kW/m² per year. In addition, a law on renewable energy was adopted in 2008. It includes biomass small scale projects, small hydropower programs, solar small scale projects and wind energy in the national program. Finally, some biogas plants have been established, but only by private initiatives.