Kyrgyzstan to require 1% revenue contribution from solar and wind farms to local villages

Kyrgyzstan is proposing a new regulation that will obligate owners of renewable energy facilities, such as solar and wind power stations, to contribute one percent of their revenue to the local budgets of the communities where they are located. This initiative, currently under public discussion via a draft cabinet resolution, aims to ensure local areas directly benefit from the presence of these energy projects.

The payment will be calculated based on income from electricity sales, excluding VAT and other indirect taxes. Renewable energy companies will be required to transfer these funds no later than the 20th of the month following the reporting period. A penalty of 0.1% of the outstanding amount will be charged for each day of delay in payment.

Local self-government bodies will be able to allocate the collected funds towards crucial areas such as the development of social infrastructure, modernization of communal services, enhancement of energy supply systems, and general territory improvement. Municipalities will also be mandated to keep separate accounting for these revenue streams and to publicly disclose information regarding their utilization on their official websites annually.

The justification document for the resolution highlights that Kyrgyzstan is currently implementing renewable energy projects with a total capacity of several gigawatts. The government believes this new mechanism will provide a direct financial benefit to local communities hosting these solar, wind, and other energy installations. The State Tax Service will oversee the completeness and timeliness of these contributions. In cases of discrepancies between data provided by investors to local authorities and tax reporting, the tax service's information will take precedence.