EBRD backs Tajikistan hydro upgrade

The European Bank for Reconstruction and Development has committed to invest $75.7m in the modernisation of the Qairokkum plant.

The European Bank for Reconstruction and Development (EBRD) has committed to invest approximately $75.7 million in the upgrading of the Qairokkum hydropower plant in the north of Tajikistan in Central Asia.

The funding includes $21 million in donor funds, a $10 million US loan and an $11 million grant from the Pilot Programme for Climate Resilience, as well as $4.7 million in technical cooperation grants from Austria, the UK and the EBRD’s Shareholder Special Fund.

Built in 1957, the Qairokkum plant is the only electricity generating facility for 500,000 households in the Sugd region. A lack of investment has taken its toll on the plant’s generating equipment and capacity in a region which experiences chronic electricity shortages in winter.

The EBRD investment will cover the first phase of the plant’s modernisation, involving the rehabilitation of two of its six turbines, increasing capacity from 126 megawatts (MW) to 142MW. The greater efficiency of new equipment will mean more electricity will be generated from the same water flow.

Tajiskistan – a landlocked country bordering Afghanistan, Uzbekistan, Kyrgyzstan and China with a population of around 8 million – is hugely reliant on hydropower with 96 percent of its electricity coming from that source. This reliance brings vulnerability to climate risks such as glacial melting and variations in precipitation.

Electrical outages in the country cause hundreds of millions of dollars of losses and are cited by businesses as the number one obstacle to private enterprise. Although the country has 5,175MW of installed capacity, only 57 percent of that is available to produce electricity.

The Qairokkum project also involves the modernisation of Barki Tojik, a 100 percent state-owned enterprise which has a monopoly on the generation, distribution and transmission of electrical energy in Tajikistan.

It will from now on have an independent board of directors, a code of corporate governance and a strengthened internal audit function.