Two new reports should interest anyone following progress building the world’s tallest dam—Tajikistan’s 3,600-MW dream, Rogun.
The World Bank has released drafts of its long-awaited Rogun feasibility studies. They appear to give Tajikistan the green light to build Rogun, saying the dam is the best way to end the country’s crippling energy shortages. However, the economic model used to make the recommendation seems to assume a set of unlikely conditions, from financial reforms and improvements in Tajikistan’s insolvent electricity industry to a major breakthrough in relations with a prickly neighbor.
Meanwhile, in a second report, Human Rights Watch says the resettlement of 42,000 people whose homes will be destroyed or flooded by Rogun is not going as smoothly as the government has promised.
The World Bank studies look at technical, economic, environmental and social considerations for three potential heights. Overall, the Bank found the tallest Rogun option – 335 meters, the only one Tajik officials talk about – the most economical: “building a dam at the Rogun site is a lower cost solution to meeting Tajikistan’s energy needs than any of the alternatives.”
Rogun is controversial not only because some fear Tajikistan does not have the technical capacity or the funds to safely build something that costs around 50 percent of GDP (between $3 and $5 billion, according to the studies). Downstream, the most populous country in Central Asia is fiercely opposed. Uzbekistan fears Rogun will give Tajikistan unfair leverage and hurt its agricultural sector. Tajikistan says it needs the dam because Uzbekistan and others have pulled out of a Soviet-era, regional energy-sharing scheme, exacerbating Tajikistan’s winter energy shortages.
One of the biggest questions is how to pay for it. “At present, actual sources of financing remain unclear and would require further exploration,” the World Bank says. The Bank repeatedly stresses that it is not financing the project. But the positive assessment clears the way for Tajikistan to seek outside financing.
The investment climate under President Emomali Rakhmon, who has filled government with members of his family, does not inspire confidence. It seems unlikely Rogun will be fully foreign financed, the World Bank concedes, pointing to transparency concerns. (The reports do not discuss political investments of the kind that China and Russia like to make to increase their own influence in the region.)
Tajikistan could try again to raise the money domestically, as Dushanbe attempted with a hapless forced-shares campaign in 2010. But going it alone will only exacerbate poverty, the Bank warns: “Full domestic financing from tax revenues or government bond issuance, while theoretically feasible, would involve major risks, increase poverty, and cause severe repression of domestic consumption.”
The Bank says the best option is mixing domestic financing with equity participation from Tajikistan’s downstream neighbors and some foreign loans, though that would still require “bold action from the Tajik government”—that is financial reforms. But the largest downstream country is Uzbekistan, Tajikistan’s archenemy, which has warned that projects like Rogun could lead to war and has refused to participate in regular riparian meetings to discuss the assessments.
Indeed, at times the reports seem to look at Rogun without considering regional dynamics.
Because any hydropower plant depends on seasonal water flows, which are greater in the summer, Rogun cannot meet all of Tajikistan’s energy needs, which are projected to continue rising in the 25 to 30 years it would take to build the dam and fill the reservoir. The World Bank’s solution is to import electricity from Kyrgyzstan: “[A]ll the scenarios, Rogun and non-Rogun, envision some winter import of electricity from the Kyrgyz Republic, some of which are imports from Uzbekistan transmitted through the Kyrgyz Republic.”
Except electricity-starved Kyrgyzstan is currently importing power from Tajikistan. And Uzbekistan is short on electricity and barely speaks with either.
The Bank’s economic analysis also assumes significant reform in Tajikistan’s insolvent energy sector. For starters, it assumes the struggling state-run Talco aluminum smelter, which uses up to 40 percent of Tajikistan’s current output and personally profits people close to the president, will start paying its electricity bills. It also assumes that Tajikistan will reduce electricity theft, improve payment collection, and raise the average domestic energy tariffs by 220 percent—a politically sensitive move no politician in a failing state wants to risk. (Tajikistan is scheduled to raise tariffs by 15 percent next month.)
Those are some big caveats. There are some smaller ones, too: The technical assessment found corrective work needed on existing structures at the dam site: “[S]everal of the underground structures, including the two existing diversion tunnels and the powerhouse cavern, would require strengthening and remedial measures, as well as comprehensive monitoring, in order to meet international norms.”
With efforts at Rogun shrouded in secrecy, those kinds of details will become especially worrisome should Tajikistan decide to construct the dam on its own.
In a separate report published June 25, Human Rights Watch looks at the resettlement of 7,000 families (42,000 people) in the 170-square-kilometer flood zone and villages near the construction site. Already the government has moved about 1,500 families and, the watchdog alleges, they have not gotten what was promised them.
Based on 156 interviews with affected people, HRW found the standard of living falls for most people forced to move: “Loss of land for farming and raising livestock, lack of employment, and poor access to essential services in resettled communities have combined to create significant hardship for resettled families,” the report says. “People who had previously relied on their lands to provide food reported that, after resettlement, they had to purchase most or all of their food at markets, leaving less money for other household needs.”
“Because thousands of families are yet to be resettled, the government has a crucial opportunity to fix the process,” said Francesca Corbacho, the report’s author.
HRW does not sound too hopeful that the Tajik government, which has a habit of spending lavishly on infrastructure in Dushanbe – constructing giant new government buildings that sit largely empty – while ignoring basic infrastructure in the countryside, will live up to its commitments to the resettled. The watchdog calls on the World Bank and other international financial institutions to “provide financial assistance to the resettlement process, including funding for effective monitoring.”