The Kyrgyz government and Gazprom have agreed to draft the terms of the Russian gas giant's participation in the privatisation of 75% plus one share in Kyrgyzgaz. The two parties signed a memorandum of understanding during a meeting in the capital Bishke

A working group will be set up within the next two months to prepare proposals on a mutually beneficial implementation of the project.

Gazprom CEO, Aleksey Miller, said: “We’ve been working in Kyrgyzstan for several years now in gas and oil exploration. This country has rich resources and it should be made self-sufficient in terms of it hydro-carbon consumption.”

Kyrgyzstan has also confirmed its readiness to assist in the acquisition of state stock of privatized Kyrgyz companies by Russian businessmen. The statement was made during a meeting of the two presidents, Dmitry Medvedev and Kurmanbek Bakiyev, which saw a number of agreements signed.

Bakiyev said that Russia is the number one foreign trade partner for Kyrgyzstan.

“We believe it’s in our interest to stimulate co-operation and attract investments by Russian companies into our economy,” he said.

Turnover between Russia and Kyrgyzstan has risen 60 per cent this year, and is expected to reach $US 1.7 billion.

President Medvedev said that the support of neighbours is important at a time when a lot of countries are experiencing an economic crisis.

“During the world economic crisis and the massive food shortages we have agreed on a joint effort to protect our markets and provide stability in the future. We need to take a coordinated approach,” he said.

However, the financial crisis was not the main issue of talks between the two leaders – in the last few months Kyrgyzstan has been facing an energy crisis.

To cope with power shortages the government shuts down the electricity in the country for several hours every day. It was therefore crucial for Bakiyev to get an agreement with Russia’s energy giant Gazprom over the development of cooperation.

Humanitarian and military co-operation were also on the agenda.

Bakiyev promised that his country would provide necessary conditions for the Russian airbase in Kant, 20 kilometres from the capital Bishkek, to effectively fulfil its mission.

He said the airbase “plays an important role in ensuring regional security and protecting the southern borders of the member-countries of the Collective Security Treaty Organisation (CSTO)”.