Tajik authorities seek additional financing sources for completion of construction of Roghun HPP

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Tajik authorities say it is impossible to construct large facilities such as the Roghun hydroelectric power plant (HPP) at the expense of the national budget alone.

It does not seem possible to construct large facilities such as the Roghun hydropower plant at the expense of the national budget alone, Finance Minister Faiziddin Qahhorzoda told reporters in Dushanbe on February 13.

According to him, the government is currently conducting negotiation on attracting funds for completion of construction of the Roghun HPP from international financial institutions.

We are studying bids that have been offered by some of them, the minister said

The funds earned from selling government bonds (a US$500 million Eurobond) issued in the international market have been completely spent, said Qahhorzoda. The issue of issuance of a new Eurobond for financing completion of construction of the Roghun HPP has not yet been discussed.

He further noted that Tajikistan plans to spend 2.1 billion somoni (equivalent to some 220 million U.S. dollars) this year for completion of construction of the Roghun HPP.

According to official data, 28 billion somoni have been provided from all sources of financing since the beginning of construction of the Roghun hydropower plant.

Tajikistan stemmed the flow of the Vakhsh River for construction of the Roghun hydroelectric power plant (HPP) mega dam in late October last year. Explosions were used on October 29 to block the main riverbed of the Vakhsh River, marking the first substantial step toward building the dam. The work on the Vakhsh River has not affected existing hydroelectric facilities downstream.

The Roghun HPP is an embankment dam in the preliminary stages of construction on the Vakhsh River in southern Tajikistan. It is one of the planned hydroelectric power plants of Vakhsh Cascade.

The Roghun HPP was first proposed in 1959 and a technical scheme was developed by 1965. Construction began in 1976 but the project was frozen after the collapse of the Soviet Union.

An agreement on finishing the construction was signed between Tajikistan and Russia in 1994; however, as the agreement was not implemented, it was denounced by Tajikistan parliament.

In October 2004, Tajikistan signed an agreement with Russia's RusAl aluminum company, according to which RusAl agreed to complete the Roghun facility and rebuild the Tursunzoda aluminum smelter. In August 2007, Tajikistan formally revoked a contract with RusAl, accusing it of failing to fulfill the contract.

In April 2008, Tajikistan founded OJSC NBO Roghun with an authorized capital of 116 million somoni for completing the construction of the Roghun HPP. Current authorized capital of OJSC NBO Roghun reportedly amounts to more than 12 billion somoni.

To raise funds to complete construction of the Roghun HPP the government started to sell shares in Roghun to people on January 6, 2010. Tajikistan has reportedly issued 6 billion somoni worth of Roghun shares.

In response to the request of the bordering countries and especially Uzbekistan, the World Bank has financed the Techno Economic Assessment Study (TEAS) and Environmental and Social Impact Assessment (ESIA). The ESIA was published on June 16, 2014 and the TEAS in July 2014. Overall, the ESIA stated that Most impacts are rather small and easily mitigated, if mitigation is required at all. and that There is no impact of the category strong negative, mitigation not possible, which would have to be considered as a no go for the project.

In 2016, construction duties on Roghun were assigned to Italian company Salini Impregilo. It is estimated that the project will cost $3.9 billion to complete.

The project is broken down into four components, with the most expensive one involving the building of a 335 meter high rockfill dam the tallest in the world which will entail costs of around $1.95 billion. Construction of the Roghun hydropower plant is expected to be completed in 2033.

Two of the six turbines have already started producing energy for sale to raise funding to complete it. The first turbine went into service in November last year and the second one was introduced into operation in September this year.

If built as planned, the dam will be the tallest in the world at 335 meters and have a capacity of 3600 MW.

Recall, deputies of the Majlisi Namoyandagon (Tajikistan's lower house of parliament) on January 16 voted for enhancement of amendments proposed by the government to the country's law on privatization of state owned properties that will allow foreign investors to buy shares in the Roghun hydroelectric plant.

Other facilities now also liable for privatization include the Talco aluminum company, the country's most important industrial concern, and the Soviet built Nurek hydropower plant, which provides for 70 percent of Tajikistan's electricity.

Source: Asia plus