Tag Archives: Tajikistan

Briefing: Tajikistan’s Rogun dam project

JULY 15 2016 (The Conway Bulletin) — >>Right. Let’s get started. The Rogun Dam. What is it and what is it all about?

>>For Tajikistan and President Rakhmon, the Rogun dam project is vitally important. If it is ever built, and the plans have been knocking around since the Soviet era, the Rogun dam will be the tallest dam in the world at up to 335 m. It will also double Tajikistan’s power generation capacity. The problem is that the dam has proved highly controversial, domestically and internationally, and is also expensive to build.

>>Hang on. Slow down. This is a lot take on. So, Rogun is massive but why is it controversial?

>>It’s controversial because human rights group have accused the government of forcibly moving thousands of people away from the Vakhsh River valley, the area that will be dammed and flooded. The government has also imposed a Rogun dam tax on people to pay for the project. This has gone down badly with human rights groups. Externally, Uzbekistan, Tajikistan’s neighbour, hates the idea of the Rogun dam. It worries that the dam will divert water from irrigating its cotton fields.

>>How serious are Uzbekistan’s concerns?

>>Central Asia is a fragile region. If Uzbekistan is making threatening noises
towards Tajikistan, people need to take notice. Analysts and diplomats have spoken of water wars in Central Asia. I’m not saying that the Rogun dam is going to trigger a war but it is another pressure point that people need to watch.

>>Got it. So with all these obstacles and problems why is Tajikistan pushing for problems?

>>It’s become Rakhmon’s pet project. He probably has another five or ten years left in office and it really feels like he wants and needs the Rogun dam to be his legacy. It’s also become vitally important for Tajikistan’s electricity generation sector. Electricity is becoming an important export commodity for Tajikistan as it has signed up to be the main power generator for the so-called CASA-1000 project.

>>CASA-1000? What is that?

>>It’s the World Bank-backed project to build a power transmission network from Tajikistan to Pakistan. It will cost around $1.2b, cross Afghanistan and be operational, if it all goes to plan, by 2019. The challenge is both security and power generation.CurrentlyTajikistan, and to a lesser extent Kyrgyzstan, doesn’t have the capacity to generate enough power to meet its CASA- 1000 commitments. That’s where Rogun comes in.

>>And the financing? This seems to be an expensive project just when the region is trying to deal with a financial crisis. Where is the finance coming from?

>>Good question. We’re not entirely clear. We’ve only been told that it is a mix of government funds and private investment. Who the private investors are and what their motives are is unknown.

>>I see. So what next?

>>Well, the Tajik government awarded a $3.9b contract to Italian builder Salini Impregilo to start construction work on the dam. We’re still waiting for work to begin but Salini Impregilo has said it will kick off soon. This has been a stop-start project so actually seeing the diggers go in and the workers start to build the dam is important. If this does happen, it’ll dominate news headlines for years to come.

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(News report from Issue No. 289, published on July 15 2016)

Tajikistan publishes negative forecasts for Somoni currency

JULY 14 2016 (The Conway Bulletin) — Tajikistan’s finance ministry published a negative forecast for the somoni currency exchange rate over the next few years, saying that the economic crisis that has hit the region since mid-2014 could be far from over. According to the official forecast, the somoni will weaken against the US dollar by 21% next year and by a further 8% in 2018. This week the official exchange rate was 7.9/$1. Much like other currencies in the region, the Tajik somoni has lost a third of its value sine mid-2014, mainly because of a recession in Russia, weakness in oil and gas prices and a drop in confidence in Emerging Markets.

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(News report from Issue No. 289, published on July 15 2016)

Tajik President appoints new FinMin

JULY 11 2016 (The Conway Bulletin) — Tajik President Emomali Rakhmon appointed former deputy Central Banker Umed Latifov to the post of finance minister, replacing Shavkat Sokhibov. Tajikistan’s economy has suffered from a regional economic downturn which has dried up worker remittances from abroad. US-educated Mr Latifov is much younger than his predecessor and has an international profile. His appointment at the Central Bank in May 2015 was his first job in Tajikistan.

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(News report from Issue No. 289, published on July 15 2016)

Gazprom drills gas well in Tajikistan

JULY 12 2016 (The Conway Bulletin) — Russian gas company Gazprom said it drilled a second well at its Sarikamysh gas and condensate field in western Tajikistan, eight years after winning the licence. In 2013, Gazprom drilled at Sarikamysh the deepest well in Central Asia at 6,540m. Murod Jumazoda, head of the government’s Geology Department, said the project is still some way off producing gas.

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(News report from Issue No. 289, published on July 15 2016)

Tajikistan’s Rogun dam start surprises people

DUSHANBE, JULY 11 2016 (The Conway Bulletin) — The revival of the Rogun hydropower project, for which Tajikistan awarded a $3.9b tender last week, surprised both analysts and people living in Dushanbe.

Most had assumed that the project first dreamt up under the Soviet Union had been mothballed. There had been no major break- through on the project for the past few years and the middle of an economic downturn is no time to start a major infrastructure project.

Still, it appears Tajik President Emomali Rakhmon had other ideas. Now, Italy’s Salini Impregilo, the construction company that won the tender, says it will complete the dam, set to be the world’s tallest, and the first two power stations by 2018.

Manu, a 28-year-old student in Dushanbe, summed up many Dushanbe-residents’ thoughts when he said that he had believed that the dam would never be built.

“I thought we would not build Rogun any time soon,” he told the Bulletin’s Tajikistan correspondent. “It all happened unexpectedly but I am excited.”

If Rogun is successfully completed it will double Tajikistan’s power production and turn it into a major regional electricity exporter.

Analysts, though, were sceptical about the aggressive timeline that Salini Impregilo has set.

Filippo Menga, researcher at the University of Manchester who has studied Tajikistan’s hydropower, told the Bulletin that large dams are never built on time.

“There is still uncertainty on who is going to fund the Rogun dam, delays are clearly foreseeable. The timeline is simply not realistic,” he said.

The Rogun dam project is cer- tainly ambitious and will change Tajikistan’s fortunes if it is success- fully completed. It will also leave a lasting legacy for the 63-year-old Mr Rakhmon who, if reports are to be believed, is already thinking about his succession strategies.

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(News report from Issue No. 289, published on July 15 2016)

Tajikistan hands out $3.9b contract to build Rogun dam

DUSHANBE, JULY 1 2016 (The Conway Bulletin) — Tajikistan handed a $3.9bn contract to Italy’s Salini Impregilo to build the Rogun dam and hydroelectric power plant, a controversial project that sits at the heart of the country’s future energy production.

Salini Impregilo, Italy’s biggest construction company, said it had already received funding of $1.95b for the construction of a dam on the Vakhsh river, which will become the tallest in the world at 355m. A company spokesman said that work would start soon.

“The idea is to have two of the six turbines start producing energy for sale by 2018 in order to raise funding to complete the project,” the company said in a press release.

The Rogun dam project is controversial because it is opposed by down- stream Uzbekistan which worries that the complex will divert water away from its cotton fields. Environmentalists have also complained about the damage the dam will cause to the region’s lush valleys and human rights activists have exposed the forced eviction of thousands of people from the area.

Still, for Tajik President Emomali Rakhmon, the Rogun dam has become one of his pet projects. In 2011, he received a major boost when the World Bank endorsed it in two feasibility projects.

Around 70% of Tajikistan’s energy production comes from hydroelectric power stations. Once Rogun comes online, Tajikistan could become a hub for the region. It already plans to export electricity to Pakistan and Afghanistan.

Salini Impregilo has built 250 dams worldwide and in August 2015 it won a $575m contract to build the Nenskra hydropower plant in Georgia.

The company said it will build six power stations atRogun, with a total capacity of 3,600MW, roughly equivalent to Tajikistan’s current capacity.

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(News report from Issue No. 288, published on July 8 2016)

Tajikistan hands out $3.9b contract to build Rogun

DUSHANBE, JULY 7 2016 (The Conway Bulletin) — Tajikistan awarded a $3.9b contract to Italian construction company Salini Impregilo to build the controversial Rogun dam in the Pamir mountains.

The Soviet-era plan has been on hold for several years because of worries over its funding and opposition from Uzbekistan that it will siphon off water needed to irrigate its cotton fields.

The timing of the $3.9b deal for Salini Impregilo was unexpected and appears to suggest that the Rogun dam project is up and running once again.

Tajikistan needs the dam to boost electricity production. It suffers countless blackouts in winter, when there is less water generating hydropower, and has also committed itself to supplying both Pakistan and Afghanistan with power from 2018.

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(News report from Issue No. 288, published on July 8 2016)

Kyrgyzstan wants to import electricity from Tajikistan

JULY 6 2016 (The Conway Bulletin) — Kyrgyzstan wants to import 1.5-2m kWh of electricity every day from Tajikistan over the summer, Aleksey Borodin, deputy director of National Electric Network, told local media, another sign that its power generating systems are not operating at their expected levels. In 2015, Kyrgyzstan imported 146m kWh from Tajikistan, before they halted trade because of the completion of theDatka-Kemin transmission line in Kyrgyzstan which was supposed to ensure the country’s energy independence.

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(News report from Issue No. 288, published on July 8 2016)

Tajikistan forces shops to accept credit cards

JULY 1 2016 (The Conway Bulletin) — Shops in Tajikistan larger than 40 square metres will now have to accept payment by both credit cards and bank cards or face a $1,000 fine under regulation passed in 2014 that has now come into force. The imposition of the 2014 rules may be linked to a cash shortage in Tajikistan whichhave caused liquidity problems for its banks.

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(News report from Issue No. 288, published on July 8 2016)

Tajik banking crisis spreads

DUSHANBE, JULY 4 2016 (The Conway Bulletin) — Tajikistan’s Central Bank said it had placed Tajprombank under its administration because it had nearly run out of cash and also that it had asked the EBRD to step in to advise it on how to support the country’s ailing banking sector.

A banking crisis in Tajikistan, triggered by a recession in Russia and a slowdown in domestic economic activity, has spread.

Tajik media reported that the Central Bank had asked the EBRD directly for technical support and advice to help it smooth out problems in its banking sector. The EBRD has already said it is looking at bailing out Tojiksodirotbank.

It has said that is is considering more support, although it us unclear if this is just advice or also funds.

So far Tojiksodirotbank and now Tajprombank have been placed under the Central Bank’s administration.

A source at the Tajik Central Bank said it had placed Tajprombank under its administration on May 3.

“This decision was taken because Tajprombank had repeatedly violated banking legislation and other regulatory acts laid out by the Central Bank, weakening its financial position and disappointing its creditors,” the source said.

It is unclear why it took the Central Bank two months to acknowledge this.

Agroinvestbank has also been looking increasingly shaky. Last month, customers said they were finding it difficult to withdraw cash from Agroinvestbank’s ATMs.

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(News report from Issue No. 288, published on July 8 2016)