Tajikistan, Kyrgyzstan Seek to Bolster Power Generating Capacity, Break Energy Dependence
Water rich, yet power poor, both Tajikistan and Kyrgyzstan are seeking to check their dependence on imported electricity, thus placing economic development on a more predictable path.
Tajikistan's current acute shortage of electricity is as much a matter of availability as of scarcity. The country has the eighth highest concentration of hydropower resources in the world, according to official data, yet it also has an electricity deficit, forcing Dushanbe to cover the shortfall with energy imports from other Central Asian countries, including Uzbekistan and Turkmenistan.
With 300 billion kW/h of potential hydropower in absolute terms, the country is sitting on a solution to many economic problems. Now, all it needs is investment to make hydropower more accessible. Currently, resources in use fail to meet the nation's demand. The Nurek Hydro Power Station (HPS) with an established capacity of 2,700 megawatt (MW), and the 126,000 kW/h Kayrakkum HPS produce most of the electric power in the country.
In Kyrgyzstan, the government hopes to invest $700 million in building electric power generating capacity over the next four years, according to the AKIpress website. Much of the money would be spent on the construction of new HPSs, potentially generating an additional 2.2 billion kW. Refurbishing existing HPSs could create another 1.2 billion kW, according to official estimates. Another $250 million in investment would be required to update energy distribution grids. If all the targets are met, and, admittedly, that's a big if, Kyrgyzstan could produce enough electricity by 2005 to meet all domestic needs.
Kyrgyz leaders also are taking steps to utilize water resources more rationally, especially in energy production. On July 23, President Askar Akayev signed the law "On the Interstate Use of Water Installations, Water Resources and Hydro Facilities in the Kyrgyz Republic," which seeks to impose charges for water usage. The prices charged by the Kyrgyz government would take "into account world prices and demand," according to AKIpress.
Tajikistan faces perhaps more daunting problems in addressing current imbalances. During the first quarter of 2001, Tajikistan produced 3.21 billion kW/h (3.121 billion kW/h by HPSs and 89 million kW/h by thermoelectric stations), while purchasing 634.6 million kW/h from neighboring countries, or roughly 20 percent of its energy needs. The price of electricity in neighboring countries is much higher than in Tajikistan and it is realized at world prices from $ .0025 to $ .005 per kW/h. Domestically, electricity is generated at a cost of $ .001 per one kW/h to the population and $ .003 to the industrial enterprises.
At present, the government is making efforts to attract foreign investors to prospective hydropower projects, mainly the Rogun HPS and the Sangtuda HPS. Notably, the state is considering a variety of options from launching joint venture to direct investments. This flexibility, perhaps, reflects the high costs and risks of constructing new hydropower stations. The total cost of the Rogun HPS is estimated at $2 billion. Up to now, approximately $800 million out of that amount have been spent. Thus, on an investment of $1.2 billion to complete the Rogun HPS, Tajikistan will realize 3.1 billion kW/h of new electricity output at the rate of $ .008 per one kW/h.
The Sangtuda-1 station also has made some progress. In 1996, it emerged as an open joint-stock company, which nearly doubled its equity base to roughly $204 million. Remarkably, shares of the OJSC "Sangtuda-1" are insured. Meaning that the shares' cost will be no less than their nominal value of $10.00. The total cost of the Sangtuda-1 construction is projected at $482.7 million $304.7 million of this amount already has gone into construction and assembly works, including $30 million for purchasing construction machines and mechanisms.
As of June 1, investors have spent $108.3 million on construction of the hydropower station. Investors should recoup their investments in up to four years. The cost price of one kW/h is supposed to be $.0025. Under normal conditions, annual income would approach $100 million.
There is great potential for economic reward. When the Sangtuda-1 and the Rogun hydropower stations come on line, the production of electric power in Tajikistan could reach 33 billion kW/h. That would produce a surplus of some 8 billion kW/h or more above Tajikistan's estimated demand of 23-25 billion kW/h.
The main consumer of electric power in Tajikistan is the Aluminum plant, which was constructed in 1975 taking into account the Nurek HPS. (The Aluminum plant of Tajikistan is the also the Tajik power engineers' biggest debtor.) Shortage of electric power occurs mostly in autumn and winter period, when flow of the Vakhsh River diminishes. The spring growing season also strains available water supplies.
By increasing power generating capacity, the Tajik Aluminum plant will have an opportunity to bring the production of primary aluminum up to 500,000 tons. Before this happens, the company will have to build overhead electricity transmission lines (500 kilovolt) 140 kilometers in length, which will link the plant to the Rogun hydropower station. The residual cost of this electricity transmission line makes $8 million. Once that happens, Tajikistan may be able to exploit its geographical situation and export electric power both the CIS and other foreign countries.
For Tajikistan to realize its plans, the government needs to attract more investment. Already, officials have transformed 24 power stations across the country into joint stock companies, with the government holding all the initial shares. Now, the state has handed over the right to manage these shares to Ministry of Power Engineering of Tajikistan. If foreign investors can enter the picture, or if some of these shares increase in value in the market, power projects could make notable progress.
Daler Nurkhanov is a freelance journalist specializing in Central Asian affairs.
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