Kyrgyz President Almazbek Atambaev said Russia would no longer be able to finance two previously agreed upon hydroelectric power projects in Kyrgyzstan.
Atambaev's announcement on December 24 highlighted the decline of Russia's economic power as a result of the collapse of oil prices and western economic sanctions. Its financial difficulties are prompting close allies and neighbors to turn to China and private investors for financing.
Atambaev said Kyrgyzstan would seek new partners for two power projects on the Naryn river and Upper Naryn Cascade. The projects are estimated to be worth over $3.2 billion.
"Russia's economy is not on the rise and the oil price trend is negative," he told a news briefing, adding that he had discussed the issue with Russian President Vladimir Putin during a visit to Moscow earlier this week.
"The reality is such that today, unfortunately, our Russian friends will not be able to implement these projects... And this is going to be the case for a long time."
Kremlin spokesman Dimtry Peskov confirmed that there are "difficulties" with financing but it was premature to say Russia was pulling out of the projects.