EurasiaNet Business & Economics - Tajikistan: Government Harbors Hydro-Power Dreams

BUSINESS & ECONOMICS

TAJIKISTAN: GOVERNMENT HARBORS HYDRO-POWER DREAMS
Konstantin Parshin 6/04/08

As Tajikistan continues to experience electricity shortages, President Imomali Rahmon’s administration appears increasingly eager to boost hydropower-generating capacity in Central Asia’s poorest country. But experts question whether Rahmon has the financial resources to fund his development plans.

Rahmon’s attention now seems focused on the Rogun Dam project, an initiative that dates back to 1976 and which would have an estimated generating capacity of 3,600 megawatts. The project has been idle for almost a year after Dushanbe cancelled a construction contract with the Russian aluminum giant RusAl. [For background see the Eurasia Insight archive].

The hardships brought on by last winter’s harsh weather -- in particular spiraling inflation and a scarcity of electricity -- have significantly increased the pressure on the Tajik government to get Rogun and other hydro-power projects up and running. On June 3, Prime Minister Oquil Oquilov announced that the second unit at the Sangtuda-1 hydropower station would begin operating ahead of schedule, by the end of the month, the Asia-Plus news agency reported. Oquilov indicated that the decision to expedite the unit’s opening was driven by the government’s desire to ease the persistent power shortages.

On May 30, Rahmon toured the Rogun construction site, where he announced the establishment of an "international consortium" that would complete the dam and get at least two of its six envisioned units operating within 4 ½ years, state media outlets reported. The consortium -- which Ramon said was set up with the help of the World Bank, and other unspecified international financial institutions -- would ensure "the right to freely participate in financing for all local and foreign investors."

Rahmon also announced that Tajikistan would spend about $34 million on the project this year, adding that the amount of Tajik government expenditures could rise to as high as $100 million in future years. This caused some raised eyebrows among regional experts, who note that the country’s estimated state budget for 2007 was estimated $673 million. Observers also are quick to point out that even if Dushanbe was to devote such a high percentage of its resources to one project, the amount that the government has to spend still wouldn’t come close to covering the costs of completing the dam. The project will require at least $1.2 billion in investment before it can be finished.

The Tajik leader is not letting the daunting numbers dash his vision. Calling the Rogun project "epoch-making," Rahmon spoke confidently on May 30 that when the dam is completed, it "will not only cover the electricity needs of [our] country, but also that of neighboring states."

Tajikistan’s neighbors may well prove the deciding factor in whether Rahmon’s dream for Rogun will be realized or not. Experts say that not only is Tajikistan dependent on outside financial help to complete the dam, the country also lacks the skilled workers who could get the job done.

During a mid-May visit to Kazakhstan, Rahmon appeared to pick up a key supporter for the Rogun project. Kazakhstani President Nursultan Nazarbayev indicated that Astana was very interested in investing in Tajik hydro-power projects. "If a consortium will work on the Rogun hydroelectric power station, then Kazakhstan will take part, providing materials, helping with shares, and as investors," Nazarbayev said during a May 13 joint news conference.

Whether Nazarbayev’s support is enough for Rogun to move forward, however, remains to be seen. Rahmon’s consortium idea appears to have two very influential enemies -- Russia and Uzbekistan. Moscow, always eager to use its economic influence to further its geopolitical ambitions, does not want to see another country grab a share of Rogun’s potential profits, or to lose political influence in Dushanbe. Russia’s Ambassador to Tajikistan, Ramazan Abdulatipov, recently stated that "Russia doesn’t need any consortium on this project," adding that "the Tajik government needs to define Russia’s participatory share."

Rahmon has sought to interest his fellow Central Asian leaders in closer cooperation on the use of water resources and in the development of hydropower generating capacity. So far, however, only Nazarbayev has seemed receptive.

Beyond the financial and geopolitical obstacles facing Rogun, Tajik officials also have to take the earthquake risk into account. The dam site is located in an area of high seismic activity, and some geologists warn that a powerful earthquake could cause a humanitarian and ecological disaster if the dam, once completed, collapsed. A few experts even suggest that the large volume of water in a dam-made reservoir could possibly trigger an earthquake. The area around the Rogun site was last hit by significant earthquakes in 2002.

Editor�s Note: Konstantin Parshin is a freelance journalist based in Tajikistan.

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