A China-based international financial institution has said it will provide a soft loan worth $500 million to Tajikistan to help it continue work on building the huge Roghun hydropower plant.

An announcement on the loan was made last week by the press service of Tajik President Emomali Rahmon following his meeting with Asian Infrastructure Investment Bank President Jin Liqun.

The terms of the loan have not been made public. The bank did not respond to Eurasianet’s repeated requests for clarification.

This anticipated injection of money comes at a fortuitous time for Rahmon’s regime, which has placed major hopes on Roghun eventually guiding the country out of economic stagnation. The ambition is to export electricity to nearby power-hungry nations like Afghanistan, Pakistan, and Uzbekistan, as well as India further afield.

Fully $3 billion has been spent out of Tajikistan’s own coffers between 2007 and 2022 on the hydropower plant to date. The knock-on effects of the COVID-19 pandemic and then Russia’s invasion of Ukraine have severely limited Dushanbe’s ability to continue setting aside money for Roghun, however.

When planning on the hydropower plant was begun in earnest in 2008, officials spoke of a $3 billion price tag. By 2016, when it came time to commission the work to an international company, that sum had risen to $3.9 billion.

According to the most recently available estimates produced by the World Bank, another important financial and technical supporter of the project, Roghun could end up costing $4.8 billion to complete. Tajik officials are much less conservative. Energy minister Dalyor Juma last year told Reuters news agency that the government’s estimate is closer to $8 billion.

In December, President Rahmon said in a speech to parliament that 3.2 billion somoni ($315 million) was being set aside this year for the project. That is at the lower end of the $300-600 million range allocated annually for this purpose over the past seven years.

Tajikistan’s search for affordable credit or grants for Roghun in recent years has been frenetic and proceeded in fits and starts. In November 2020, the government announced that it was exploring the possibility of soliciting $340 million in loans from Swiss financial institutions Credit Suisse and Landesbank Baden-Wuerttemberg. But in February, Finance Minister Fayziddin Kakhhorzoda revealed that Dushanbe was no longer pursuing that option.

Last July, a representative for the European Union’s investment arm, the European Investment Bank, told Reuters that it had been tapped by the European Commission to become “the largest investor” in Roghun. It is not yet clear what this proposed commitment will entail.

Other lenders have seemingly been more forthcoming.

In January, the World Bank approved a $15 million grant to support the “financial and commercial frameworks” of the Roghun project.

“The […] grant will finance the hiring of experts on dam safety and environmental and social frameworks to help with necessary improvements that will bring the project in line with current hydropower industry requirements,” the World Bank said in a statement at the time.

Earlier this month, the Tajik Economic Development and Trade Ministry announced that the Jeddah-based Islamic Development Bank had pledged to extend credit worth $450 million for “priority sectors” of the economy. It has earlier been reported that the lender had earmarked $150 million specifically for Roghun.

If it is ever completed as intended, Roghun hydropower plant will, with its 3.8 gigawatts of installed capacity, become the largest of its kind anywhere in the region. Annual output of up to 17 billion kilowatt-hours of electricity would afford Tajikistan the ability to generate large amounts of money in export revenue.

The project is supposed to be fully finished by 2028, but that will depend on whether the money comes through.