ADB supports improvement of Tajikistan’s power sector, road network safety and fiscal management

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Relevant grant agreements were signed between the Bank and the Government of Tajikistan at the end of the last year, according to the ADB Tajikistan Resident Mission (TJRM).

Thus, the Bank will award a US$105 million grant to the Government of Tajikistan to accelerate the implementation of ongoing reforms and improve the financial sustainability of the power sector in Tajikistan.

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.

Besides, the ADB will provide a US$67.49 million grant to the Government of Tajikistan to enhance the safety and reliability of the national road network in southern Tajikistan and promote the economic participation of women in the area.

The project is aimed at rehabilitating two existing national road sections in the Khatlon province: from Danghara to Oqmazor (28.7 km) and from Hulbuk to Kangurt (59.5 km), which currently support traffic volumes of 4,200 vehicles and 1,300 vehicles per day, respectively.

The project will help the Ministry of Transport operationalize a road asset management system by developing a data inventory of the country’s arterial highways and train staff to collect and analyze condition data. The database will enable the government to prepare annual maintenance plans and ensure adequate budget for maintenance.

The Asian Development Bank (ADB) last month approved a $50 million policy-based grant to support the Government of Tajikistan in accelerating private sector growth by creating a stable financial system, increasing access to financial services, and improving fiscal management. The grant is for the first phase of the Financial Sector and Fiscal Management Improvement Program.

Major reforms reportedly include improving public confidence towards the banking sector via setting up backup funding mechanism for the Individuals Deposit Insurance Fund to cover potential shortfalls in reserves, enhancing the ability of the National Bank of Tajikistan to monitor and manage financial stability, expanding the competitiveness of the insurance industry and growing Islamic finance.

The program also supports the Ministry of Finance in strengthening oversight and accountability of state-owned enterprises, facilitating capital market development, and ensuring transparency of the mechanism for the provision of tax and customs incentives.

A three-year tenure of Dr. Pradeep Srivastava to work as ADB Country Director for Tajikistan ended at the end of the last year. Mr. Pradeep Srivastava had served as ADB Country Director for Tajikistan since May 2017. A new ADB Country Director for Tajikistan has not yet been appointed.

Established in 1966, the Asian Development Bank is owned by 68 members—49 from the region. Tajikistan joined ADB in 1998.

Source: Asia Plus