Tajikistan desperately needs to reform its energy sector

5 months ago Web Desk 0

As a result of the rationing coming into effect on December 5, residential customers in rural areas now have no electricity from 11 p.m. until 6 a.m.


In 2020, an average daily electricity generation in Tajikistan amounted to about 54 million kWh, which is 3 million kWh fewer than in 2019.


Last year, more than 92.3 percent of electricity was generated by the hydropower plants and the remaining 7.7 percent was generated by thermal power plants.


Current total capacity of the country’s power grid is about 5,800 megawatts (MW).


The Nurek hydroelectric power plant (HPP), with an installed capacity of over 3,000 megawatts, generates more than 50 percent of total annual energy demanded in Tajikistan.


The other hydropower plants operating in Tajikistan are: Sangtuda-1 HPP with installed capacity of 670 MW; Baipaza – 600 MW; Sarband HPP – 240 MW; Sangtuda-2 HPP – 220 MW; Qairoqqum HPP – 129 MW; Sharshara HPP – 30 MW; Tsentralnaya HPP – 15.1 MW; Varzob-2 HPP – 14.7 MW; Varzob-1 HPP – 9.5 MW; and Varzob-3 HPP – 3.2 MW.


Besides, two units of the Roghun HPP with a total capacity of 200 MW have been introduced into operation.


There are also 286 small and mini hydropower plants with a total capacity of 26.7 MW operating in Tajikistan.


The electricity infrastructure in the Gorno Badakhshan Autonomous Regions is operated by PamirEnergy, which was formed in 2002 by the Aga Khan Fund for Economic Development (AKFED) in partnership with the Government of Tajikistan and the International Finance Corporation. Since then, the company has repaired the electrical infrastructure of GBAO, expanded hydroelectric capacity and transmitted surplus energy from Tajikistan to Afghanistan. As a result of PamirEnergy’s efforts, electricity coverage has expanded from 13 percent of households receiving 12 hours of electricity per day in 2002 to 96 percent of households receiving 24/7 electricity in 2016. PamirEnergy now operates 11 small and mini hydropower plants with a total capacity of 45 MW in the region


But it is to be noted that due to the frost and drop in water levels, residential customers in GBAO now have no electricity from 6 p.m. until 10 p.m.


Tajikistan desperately needs to reform its energy sector. In 2013, over 10 percent of Tajikistan’s enterprises reportedly considered unreliable electricity supply as a major constraint to doing business in the country. In 2019, the share of local enterprises who considered unreliable electricity supply as a major constraint to doing business reportedly fell down to 8.4 percent, still significantly above the average of 3.8 percent across Europe and Central Asia.


Solving these issues would require significant financial investment in infrastructure. But Barqi Tojik is hardly positioned to make any investments. Barqi Tojik owns and operates most of the electricity generating plants and transmits, dispatches, and distributes electricity to all regions of Tajikistan, except for GBAO. According to some sources, Barqi Tojik held a 12.5 billion somonis (equivalent to US$1.2 billion) debt in 2019, which constitutes 80 percent of total state-owned enterprise debt to the Ministry of Finance. The roots of Barqi Tojik’s debt lie in poor collection rates and significant transmission losses.


Collection rate for billed electricity is only 85 percent, below the 95 percent threshold for well-functioning energy utilities and with 10 percent of electricity sales not generating any revenue. Barqi Tojik’s total electricity losses are estimated at 24 percent of total annual electricity generation, twice above the accepted level of technical losses in power systems with similar configuration and age. These excessive technical losses are due to under-spending on network rehabilitation and upgrades of the system that was mostly constructed in the 1960-70s and hasn’t undergone any major capital upgrade.


Under the pressure from international donors, the Tajik government committed to slowly reform Barqi Tojik. The government has initiated optimization of the organizational structure of the utility by unbundling it into separate electricity generation, transmission, and distribution companies, and is gradually raising the electricity tariffs. Additional limited investments are being made into upgrading the country’s transmission lines. But while agreeing to these reforms on paper, the Tajik government has been reluctant to act on them fully and has been diverting most of its efforts towards increasing its energy exports as a way out of its current revenue dilemma.


Source: Asia Plus