Expenditure on Roghun forcing the Tajik government to reduce the volume of necessary social spending

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Eurasianet says Tajikistan has struggled for over a decade to raise funds for the world’s tallest dam, leaving its population freezing each winter and skimping on basic social services


With the cold gripping ever tighter, households reportedly must resort to using old-fashioned stoves. And anything, even things unsuitable for the purpose, is used for fuel.


The harder situation is in mountain areas, where snow began falling in November. With power rationing having begun in October, relying on electricity for heating and cooking was not an option.


Villagers reportedly use the same stove to warm themselves, boil water, and cook food. They get electricity for four hours in the evening power and the same amount during the daytime.


Villagers fuel their stoves with firewood and dung.


Eurasianet notes that President Emomali Rahmon informed the public that they should expect yet another winter of power rationing on October 24 in the city of Nurek, site of the Soviet-era power plant that still provides the country with most of its electricity. He reportedly played down the exceptional and extreme extent of the rationing, arguing that “even the developed countries of the world” were experiencing electricity shortages and that households must be frugal.


Tajikistan first began to experience these chronic difficulties in the early 2000s, when Uzbekistan suspended deliveries of natural gas. Shortage of that fuel meant power generators were unable to work at full capacity in winter.


Work on building the projected 335-meter dam of the Roghun hydropower plant got underway in November 2016. Construction is being carried out by Milan-based Webuild, a company that was known as Salini Impregilo until May 2020. The first generating units were commissioned in November 2018 and September 2019, but there have been limited signs of progress since then.


Webuild reportedly hailed a milestone of sorts in July when it announced that it had begun the concrete pour for construction of the core dam at Roghun. But the completion date of 2025 forecast by Webuild is nevertheless looking highly optimistic, according to Eurasianet.


The problem is clear enough: money. Tajikistan does not have enough funds to pay for the project itself and few outsiders are prepared to commit either.


In 2008, when it was announced that the Roghun project, which was first devised in Soviet times, was to be revived, the cost was estimated at US$3 billion. That price tag had risen to US$3.9 billion by 2016. This year, the Ministry of Energy and Water Resources announced it will take US$5 billion to finish Roghun. Higher estimates have been mentioned elsewhere.


The World Bank notes in its report that expenditure on Roghun is forcing the government to reduce the volume of necessary social spending, jeopardizing macroeconomic stability and exacerbating the risk of a debt crisis.


In September 2017, the National Bank issued US$500 million worth of eurobonds on the international market, a pile of debt that is already requiring Tajikistan to make annual repayments of around US$35 million.


Citing government officials, Avesta reported on December 6 that Tajikistan is hoping to raise another 314 million euros (US$334 million) for Roghun next year. The plan is to drum up the funds through the issue of loans at “acceptable interest rates.” The officials offered no indication as to which countries or financial institutions might hand over this cash.


Eurasianet notes that there may be hopes that the European Union will live up to vague commitments to become an investor in the project. In July, the EU’s investment arm, the European Investment Bank, told Reuters news agency that it had been charged by the European Commission with becoming “the largest investor” in Roghun. The stated purpose of the investment was to reduce Tajikistan’s dependence on Russia, according to Eurasianet.


Source: Asia-Plus