ADB provides $105 million grant to improve financial sustainability of power sector in Tajikistan

6 months ago Web Desk 0

The Asian Development Bank (ADB) has approved a $105 million grant program to accelerate the implementation of ongoing reforms and improve the financial sustainability of the power sector in Tajikistan, says press release issued by ADB on December 4.

 

“There is a profound financial crisis in the Tajik power sector and recovering from this requires simultaneously addressing sector governance, debts, tariffs, sales, timely collections, and system losses,” said ADB Finance Specialist for Central and West Asia Yuki Inoue. “This program provides critical support for the Tajikistan government to implement the biggest reforms in the power sector, complementing interventions by earlier ADB energy projects and those of other development partners.”

 

The reforms include unbundling the vertically integrated power utility Barqi Tojik into three independent companies responsible for power generation, transmission, and distribution; restructuring Barqi Tojik’s excessive liabilities; establishing a new power sector regulator; adopting a tariff methodology; and setting up a new centralized cash control system among the unbundled entities. As part of the reforms and institutional capacity building, a newly established power distribution company will be operated under a 5-year management contract by an internationally reputable company with experience operating power utilities.

 

The program will enhance retail electricity metering and low- and medium-voltage distribution networks in seven priority cities: Dushanbe, Buston, Danghara, Isfara, Istaravshan, Konibodom, and Panjakent. The planned installation of around 370,000 advanced meters will reduce the cost of metering and billing, lower outage costs, and improve the quality of supply for customers.

 

The management contract will be one of the first instances of public-private partnership in Tajikistan’s energy sector. The program also promotes gender mainstreaming with action plans focused on corporate gender policies for the utility companies and skills enhancement for female candidates for opportunities in the sector.

 

The total cost of the program is $145 million, with the Government of Tajikistan providing $15 million, and the European Bank for Reconstruction and Development providing a $25 million loan. The program is expected to be completed in 2026.

 

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

 

Source: Asia Plus