DUSHANBE/Dec. 4 (The Bulletin) –China is lining up a $545m investment to buy a stake in the Talco aluminium smelter, Tajikistan’s biggest industrial unit.
Yue Bin, China’s former ambassador to Tajikistan, told the Tajik language version of Radio Free Europe/Radio Liberty that the investment, announced earlier this year, would be paid for by China Machinery Engineering Corporation (CMEC) to help modernise the Soviet-era plant.
“In my opinion, the joint venture will benefit both parties, both in terms of creating new jobs, and in terms of increasing production capacity and volume of production, sales of products and, ultimately, tax revenues to the state budget of Tajikistan,” he was quoted as saying.
Talco has not comment, neither has the Chinese government nor the Tajik government but in November Talco was converted into a joint stock company, which should make it easier to sell stakes in. This year it was announced that China would invest $545m into Talco to modernise the Soviet-era factory, although it wasn’t explained at the time how this investment would be paid for.
The potential deal highlights what many analysts have described as an economic takeover of Tajikistan by China. In return for political influence, China has given Tajikistan cheap loans to build new roads and tunnels, construct cement factories and beautify Dushanbe. Chinese companies now own various mining rights in Tajikistan and earlier this year reports surfaced that it had built a military base in the Pamir Mountains.
The ownership structure of Talco if opaque. Officially it is owned by the Tajik government although there are close links to the presidential family. Talco also has a management company based in the BVI.
— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019
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