It turned out that git bin directory was not included in Windows' PATH variable. First tried running bower manually and it said git is not recognized...
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Solution. Control Panel > System and Security > System > Advanced System Settings > Environment Variables > PATH
added git bin here separated by ;
. In my case git bin directory was C:\Program Files (x86)\Git\bin
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PS: Just in case someone runs into same problem, I won't delete the question :D