WB preparing technical assistance to further improve sustainability of Roghun Hydro Power Project

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On November 8, World Bank Group President David Malpass met in Sharm El Sheikh, Egypt with President Emomali Rahmon of Tajikistan on the sidelines of COP27.


According to the World Bank, the parties discussed the challenging outlook for the Tajik economy, which is facing increased uncertainty amid regional instability.


World Bank head reportedly affirmed the World Bank Group’s (WBG) commitment to supporting Tajikistan through a combination of financing, technical assistance, and analytical work.


Malpass and Rahmon talked about the importance of strengthening governance and transparency of state-owned enterprises as well as regulatory reforms in the water and energy sectors.


Malpass reportedly noted that the International Development Association (IDA) is currently preparing a technical assistance project to further improve the sustainability of the Roghun Hydro Power Project (HPP) aimed at contributing to better macro-fiscal conditions and improved operations of the project.


The Tajikistan Public Expenditure Review released by the World Bank notes that this international financial institution is developing possible options for funding the Roghun Hydro Power Project for the Government of Tajikistan.


The Review, in particular, notes that the financing structure of Roghun is a critical determinant of Tajikistan’s outlook.


The completion of the construction of the Roghun hydropower plant is currently being financed entirely from public funds, while negotiations on attraction of financial aid from international still remain unsuccessful.


The Tajikistan Public Expenditure Review says completion of the project is estimated to require an additional US$5.1 billion in construction costs and funds for resettlement of people affected by the construction.


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 for completing the construction of the Roghun HPP.


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


In 2016, construction duties on Roghun were assigned to Italian company Salini Impregilo (currently Webuild).


The project is broken down into four components, with the most expensive one involving the building of a 335-meter-high clay core rockfill dam — the tallest in the world — which will entail costs of around US$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 2018 and the second one was introduced into operation in September 2019.


According to data from the Ministry of Finance of Tajikistan (MoF), 37.7 billion somonis have been spent for construction of this hydropower plant since 2008.


If built as planned, the Roghun hydropower plant is expected to end chronic power shortages in Tajikistan and allow it to export electricity to neighboring countries.


Source: Asia-Plus