World Bank approves additional financing grant for the Second Phase of the Nurek Hydropower Rehabilitation Project
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The World Bank’s Board of Executive Directors has approved additional grant financing of US$65 million in support of the Second Phase of the Nurek Hydropower Rehabilitation Project, which will contribute towards more reliable electricity supply and expansion of renewable energy exports in Tajikistan, says press release issued by the World Bank.
“The World Bank is committed to supporting Tajikistan’s energy sector, given the country’s considerable potential in hydropower generation and export of clean, renewable energy resources,” said Ozan Sevimli, World Bank Country Manager in Tajikistan. “Investments in the Nurek hydropower plant – the mainstay of the country’s energy system – are essential in ensuring stable and reliable electricity supply for households and businesses domestically, as well as increased revenues from export at the regional market.”
The first phase of the Nurek Hydropower Rehabilitation Project, financed by the World Bank with US$225.7 million; the Asian Infrastructure Investment Bank (AIIB) with US$60 million; and the Eurasian Development Bank (EDB) with US$40 million, was launched in March 2019. It supports the rehabilitation of three of the nine generating units and the key infrastructural components of the power plant, replacement of six autotransformers that are used to evacuate the generated electricity, enhancement of dam safety to protect the facility from seismic hazards and floods and technical assistance to strengthen operational, technical, and financial management capacity of the utility company Barqi Tojik. The project’s second phase, financed by the World Bank ($50 million approved in June 2020), supports the rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse, and other key buildings, while also strengthening the capacity of the hydropower plant (HPP) to effectively operate and maintain the plant’s operations.
The additional financing of US$65 million approved on December 21 is intended to reduce the current financing gap of $164 million for the second phase of the project. The remaining gap is expected be covered by other potential co-financiers, including reallocation of savings from the EDB and AIIB resources allocated for the first phase of the project. The total World Bank investments for this strategically important project amounts to $341 million.
The Nurek HPP generates about 50 percent of total annual energy demand in Tajikistan and supplies most of the energy for exports. Due to technical problems, the power plant’s initial installed capacity of 3000 megawatts has reduced to 2,320 megawatts over the past four decades. The facility is currently undergoing its first major rehabilitation since its commissioning in 1972-1979. Once completed, the rehabilitation will allow to increase the HPP capacity to 3,214 megawatts that will ensure improved electricity supply during the cold winter months and bringing much-needed revenues from expanded electricity exports during the summer months.
The rehabilitation will also ensure dam safety improvement measures, which will help lower operational and maintenance costs. Lastly, the project will generate global environmental and climate mitigation benefits in the form of net reduction of CO2 emissions, leading to 69 million tCO2e net reduction in emissions versus the baseline during the project’s economic life.
The World Bank Group’s active portfolio in Tajikistan includes 23 projects, totaling US$1.2 billion that aim at helping Tajikistan to take advantage of emerging regional opportunities, transform its economy, and improve the livelihoods of its citizens. Since 1996, the World Bank has provided over $2 billion in grants, highly concessional IDA credits, and trust fund resources to the country.